Domestic interaction of external debt and foreign direct investment in Hungary

Abstract

This study addresses the accumulation of external debt and the flow of foreign direct investment (FDI) jointly, and also strives to explore the internal interaction of these two global capital components on the one hand; and, on the other hand – in an unorthodox manner, even raising doubts – it attempts to apply some corporate funding principles in a macroeconomic setting, and tries to extend corporate analogy to the entire national economy regarding the in-flow, invest ment, and return of capital, carefully adhering to the limitations of the model.