Capital outflows from emerging countries are bad news for the global economy

In 2018 ( like from 2013 to mid-2016), we can again see capital outflows from emerging countries , due partly to rising dollar interest rates, and partly to rising risk aversion. They will weaken emerging economies, via the knock-on effects of the depreciation of those countries’ exchange rates, and weake n global trade. Ultimately , the global economy will be weakened, like from 2013 to mid-2016, because capital is more efficient when it is invested in emerging countries than when it returns to OECD countries. The fact that capital flows to emerging countries continue to be unstable is therefore bad news for the global economy.