06
Oct
By Marijn Bolhuis, Arindam Roy, Patrick Schneider, Zhao Zhang
Stronger fiscal and monetary policy frameworks and more developed local currency debt markets have supported emerging market resilience
Emerging market economies have held up remarkably well in recent years, even after periods of global financial turbulence. While favorable external conditions (in other words, good luck) often helped, it’s clear that good policies matter.
In the past, “risk-off” episodes—when global investors indiscriminately sold riskier assets—often hit emerging markets especially hard. They triggered sharp capital outflows and tighter...