Analysis of the impact of capital flows on economic growth and synchronization of business cycles[Анализ Влияния Потоков Капитала На Экономический Рост И Синхронизацию Деловых Циклов]

In this paper we study existing works about factors of capital mobility, as well as the impact of capital flows on the economic growth and synchronization of business cycles. The relevance of this study arises from the prospects of deepening financial integration of the Eurasian Economic Union member countries and the need to identify the mechanisms and direction of the impact of integration processes on the economies of the member countries. The purpose of this study is to identify, based on a review of theoretical and empirical studies, the key mechanisms of the impact of financial integration on economic growth and the process of convergence within the economic union, as well as the synchronization of business cycles between countries. The basic methods are system analysis, synthesis, generalization of existing empirical and theoretical studies. The results of this study allow us to formulate an approach to investigate the process of financial integration between the EAEU member countries, to identify and assess the performance of channels of capital mobility impact on economic processes in the short and long term depending on the types of cross-border capital flows. The conclusions of the study on economic growth are that even within a single channel, the nature of the impact of capital mobility on economic growth may vary. Nevertheless, capital flows in the form of direct investment are the most likely to be found to have a positive impact on economic growth, as such flows are most often associated with productive investment. On the business cycle side, it can be concluded that the nature of the impact of capital mobility on business cycle synchronization is ambiguous, and there are arguments both in favor of financial integration leading to business cycle synchronization and desynchronization. However, FDI is more likely to contribute to cycle synchronization because it stimulates international value chains and the activities of multinational corporations that can share profits and losses among affiliates, as well as facilitating technology transfer.