Emerging Economies on Their Own

Both ECB President Mario Draghi and US Federal Reserve Chair Janet Yellen recently asserted that their policy decisions would account only for domestic conditions. In other words, emerging economies – though subject to significant spillover effects from advanced-economy monetary policy – are on their own.

NEW YORK – There was a remarkable similarity between European Central Bank President Mario Draghi’s statement after a recent meeting of the ECB Governing Council and US Federal Reserve Chair Janet Yellen’s first testimony to Congress: both asserted that their policy decisions would take into account only domestic conditions. In other words, emerging-market countries, though subject to significant spillover effects from advanced economies’ monetary policies, are on their own.

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