1:33 PM
US A MA
After the 2008 financial crisis, the
liquidity trap induced policymakers to venture in unconventional endeavors. On
the fiscal front, much has been discussed regarding the effectiveness of fiscal
policy to pull developed countries out of the sluggish recovery. On the
monetary side, the so-called quantitative easing (QE) guaranteed the liquidity
needed to avoid a collapse of the financial system, even though its efficacy to
stimulate the economy has been questioned. Within this environment, some concerns
were raised in the Emerging Markets. The expansionist attempts would, some have
been advocating, inflict in exchange rate appreciation, hurting EM’s companies’
exports competitiveness.
Domestic Issues
The first thing is to elaborate...
