Emerging economies have been pursuing policies with little regard for the lessons of recent financial crises. Countries like India, Brazil, South Africa, and Indonesia have been hit by the Fed’s gradual exit from quantitative easing – and the asset bubbles that it has fueled.
ROME – Some of the developing world’s larger countries, flush with capital after being recognized by investors as “emerging-market economies” (EMEs), have been pursuing policies with little regard for the lessons of the financial crises of 1997-1998 and 2008-2009. As a result, countries like India, Brazil, South Africa, and Indonesia have been hit by the US Federal Reserve’s gradual exit from so-called quantitative easing (QE) – not just capital-flow reversals, but also a sharp decline in domestic asset prices.
ROME – Some of the developing world’s larger countries, flush with capital after being recognized by investors as “emerging-market economies” (EMEs), have been pursuing policies with little regard for the lessons of the financial crises of 1997-1998 and 2008-2009. As a result, countries like India, Brazil, South Africa, and Indonesia have been hit by the US Federal Reserve’s gradual exit from so-called quantitative easing (QE) – not just capital-flow reversals, but also a sharp decline in domestic asset prices.