Preventing an Emerging-Market Meltdown
Emerging markets today account for more than two-fifths of global GDP measured at market exchange rates, and nearly three-fifths after adjusting for differences in purchasing power. If these economies crash, then rich-country citizens will also be the victims of an economic catastrophe long foretold and clearly avoidable.
LONDON – In his novel Chronicle of a Death Foretold, Gabriel García Márquez describes a tragedy that everyone anticipates but no one will stop. The same is true of the perilous plight of emerging markets today: the international community could prevent imminent macroeconomic disaster, but seemingly lacks the will to do so.