The article explores why capital doesn't flow from rich to poor countries. By considering intermediation costs, the researchers found that capital flows can be influenced by these costs, leading to non-monotonic returns for capital. This means that capital tends to flow to middle-income countries, as observed in real-world data. When a poor country removes capital controls and opens up, there is an outflow of capital. Despite the closed economy having more capital for production, the open economy excels in terms of income, consumption, and welfare.