Before revision: The paper models foreign capital inflow from the developed to the developing countries in a stochastic dynamic programming framework. The model is solved by numerical technique because of the non-linearity of the  functions.
After revision: The paper models foreign capital inflow from the developed to the developing countries in a stochastic dynamic programming (SDP) framework. Under some regularity conditions, the existence of the solutions to the SDP problem is proved and they are then obtained by numerical technique because of the non-linearity of the functions.