Özet:

Purpose - In our days, the acceleration of capital flows between countries causes debates on current economics theories and policies. Capital flows between countries mainly specified as ‘’hot money’’ may create severe problems for home countries since they may outflow suddenly for varied reasons. The purpose of this study is to investigate the reasons for sudden stop of capital flows in developing and underdeveloped countries and the efficiency of some control mechanisms. Methodology - In this study, the fundemental changes of foreign capital flows in home countries, the main reasons causing outflow and the efficiency of basic control mechanisms are investigated theoritically based on the literature review. Contribution- It is observed that at the beginning stage there is a need of control mechanisms for short term capital flows in order to eliminate their negative effects. Conclusion- In conclusion, it can be said that in the case of adopting an economic development and growth model financed by foreign direct investment and internal resources, Turkey, like South Corea, will acquire the potential of being between the biggest economies around the World.

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