Capital flows are not the main reason for economic growth. A model suggests that firms need both training and capital for growth. In early stages, more output leads to more capital coming in, but it's not the cause of growth. As economies develop, more output leads to capital leaving because local savings increase more than the need for capital. The model matches real-world data on capital flows, explaining half of the differences in foreign investment per person based on a country's development stage. Many policies on capital flows might not matter much.