Contractionary monetary policy, particularly rising interest rates in major advanced economies, tends to trigger capital and investment outflows from emerging markets as global financial conditions tighten.
Evidence for · 2
Global Financial Stability Report, October 2015
2015 · cited by 9
The report notes that the prospect of the U.S. Federal Reserve raising interest rates points to an unprecedented adjustment characterized by capital outflows from emerging markets.
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Chapter 3. Corporate Leverage in Emerging Markets—a Concern?
2015 · cited by 0
Higher policy rates and the normalization of financial conditions are linked to heightened vulnerabilities and susceptibility to capital outflows in emerging economies.