Report
A major disadvantage for emerging countries
When comparing emerging countries (excluding China) with OECD countries, we see a major disadvantage for emerging countries: their inability to conduct a strong countercyclical economic policy. This is because: Fiscal deficits and public debt in emerging countries are limited by the low level of domestic savings that can be mobilised and by the impossibility of freely using external debt; Expansionary monetary policies in emerging countries have major drawbacks that they do not have in OECD countries: large capital outflows and sharp depreciation of the exchange rate, and therefore a decline in investment capacity and real income. Emerging countries can therefore react much less effectively to shocks than OECD countries.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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