These example sentences are selected automatically from various online news sources to reflect current usage of the word 'leakage.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Leakage occurs when money leaves an economy. In the investor relations world, leakage also refers to the unauthorized or unanticipated dissemination of information.
How It Works
Let's say interest rates in Country X suddenly surpass interest rates in Country Y. Money begins to leak out of Country X and into Country Y as investors seek higher returns for the same amount of risk.
Why It Matters
Leakage can have many forms; interest rates are just one way for money to leak out of an economy. High taxes can have the same effect, as can excessive saving or higher interest in purchasing imported goods. In any case, the exit of money from an economy means the businesses in those economies must look for other forms of revenue. The shortage of capital can spur governments to stimulate the economy as a result.