Esteban Vesperoni, Emil Stavrev, Sebastian Weber, 28 August 2014

As prospects in key advanced economies improve, financial conditions will tighten. The effect of outward spillovers from source countries to emerging markets will depend on whether financial conditions are driven by stronger growth (real shocks) or unexpected tightening in financial conditions (money shocks) –  including those due to financial stability concerns or market uncertainty about the exit path. From a recipient’s perspective, spillovers will also differ across countries – reflecting interactions between domestic fundamentals and policies with the external shock.

Events

CEPR Policy Research