There are several economic flows that link one country’s economy to other national economies and these are:
- Resource flows or Capital and labor flows– One country can establish its capital in a foreign countries. Labor force also moves from one country to another. Each year millions of people move to other countries.
- Trade flows or Goods and service flows- To improve their economic situation countries import and export goods and services.
- Financial Flows- Money is transferred between countries because of several reasons: paying for imports, paying interest on debt, providing aid for some countries.
- Informational and technology flow- Countries transmit each other information about their prices of goods and services, investment opportunities. Countries use one others technology in order to have the most efficient output.
Let’s take for example Latvian economy.