If the real interest rate in the United States rises above that of Argentina, it is incorrect to assume that capital will flow to the U.S. due to potential risks associated with exchange rate fluctuations and economic instability in emerging markets.

When the real interest rate in the United States is higher than in Argentina, it might seem like investors would want to put their money in the U. S. for better returns. However, many investors also consider risks like how stable a country's economy is and how much its currency might change in value. For example, if investors think the Argentine peso could lose value or that Argentina's economy might face problems, they may decide it’s safer to keep their money in the U.