Quarterly Bulletin
Emerging Market Economies Articles
| 2008 Q1 | Capital inflows into EMEs since the millennium: risks and the potential impact of a reversal  (651k) By Guillermo Felices, Glenn Hoggarth and Vasileios Madouros of the Bank's International Finance Division. Capital inflows into emerging market economies (EMEs) were at a record level in 2007 and higher than prior to the East Asian and Russian crises a decade earlier. These inflows largely reflect improvements in EMEs' economic and financial strength in recent years. But some EMEs, especially in Central and Eastern Europe, may be vulnerable to a reversal of capital flows if the global credit squeeze is prolonged or global GDP growth falls sharply. This could adversely affect both EMEs and foreign investors. |
| 2006 Q3 | Costs of sovereign default |
| Autumn 2003 | Inflation
targeting and the fiscal policy regime: the experience in
Brazil
(104k) (by Francesco Giavazzi, Houblon-Norman Fellow and Professor of Economics at Bocconi University, Milan and Visiting Professor of Economics at the Massachusetts Institute of Technology). This article reviews the recent experience of Brazil showing that credit risk is at the centre of the mechanism through which a central bank might lose control of inflation. Brazil during 2002 came close to a situation where fiscal policy hindered the effectiveness of monetary policy. But in early 2003 a change in investors' perception of the long-run fiscal stance brought the economy back to normal conditions, reducing credit risk, stabilising the exchange rate and, through these two variables, inflation expectations, inflation and the dynamics of the public debt. Brazil's experience could thus offer useful lessons for other emerging market economies, which consider adopting inflation targeting as their monetary policy rule. |
