Journal of Computations & Modelling

Investigating the Effect of Capital Flight on the Economy of a Developing Nation via the NIG Distribution

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• Abstract

  The effect of the abnormal capital outflow (capital flight) on the economy of a developing nation is investigated herein via a class of distribution known as the Normal Inverse Gaussian (NIG) distribution. The capital outflow is first modeled as an infinitely divisible process to adapt to the operational time which is an important characteristic of the NIG. Data of capital flight from 1973-1989; source from the IFS (1990) year book fitted to the NIG as illustrative test of the model.