Net international capital movements entail equivalent net resource transfers. Arbitrage in perfectly integrated finan-cial markets instantaneously eliminates yield differentials through valuation adjustments. But the stock adjustments that constitute the essence of net capital movements may also be impeded by imperfections in the real sector. Perfect mobility of funds, therefore, does not imply the absence of all impediments to international capital movements. They may be restrained, i.a., by differences in national term structures of interest, by real exchange rate expectations, or by industrial structure and intersectoral factor mobility.