Trasferimenti normali e anormali di capitali: attualità del pensiero di Marco Fanno - Normal and Abnormal International Capital Transfers: the Current Relevance of Marco Fanno ‘s Thought

This work takes a second look at Marco Fanno’s thoughts on the nature, causes, and effects of international capital movements, placing the issue into the broader context of Fanno’s theory of the business cycle and development. This study is based on the 1939 American edition on normal and abnormal capital transfers, which contains newer features different from those in the previous editions of 1935 and 1936. For Fanno, normal capital transfers act as an element that strengthens and brings equilibrium to the world’s economic structure. Forcefully stating the importance of the mobility of all production factors, he is highly critical of certain theorems of pure international trade theory founded solely on product mobility. His outlook, which tends to broaden the paradigm of mobility to production factors as well, takes on considerable relevance in light of the structural changes in the economies of the various nations in recent years. Fanno’s intuition and insight also address the nature and causes of abnormal transfers of capital. He clearly shows how abnormal transfers of capital regard stocks of wealth previously accumulated and invested. The new savings flows are not great enough to cause significant and sudden disturbance. According to Fanno, when the country’s monetary conditions are disrupted, the risks become so high that they cannot even be offset by excessively high interest rates. Broad and growing differentials in interest rates cannot arrest the capital flight caused by the exceptionally high risk premia.