ABSTRACT
Capital flight has often been described as an epidemic which spreads under conditions of looming economic or political disaster. In the mood of collective fear, the catchword becomes 'Man muss Devisen kaufen' (foreign currency is the thing to buy). Investors scramble to transfer their wealth to somewhere safe, usually beyond the national frontier, before the gates slam shut. The driving force behind the flight is seen as panic. In these terms, the phenomenon of capital flight would be best studied by the psychologist rather than economists.
