Emerging Economies and Capital Flows – the poisoned chalice

......Hence, to expect technocrats and policymakers in emerging economies to get past political obstacles and pursue a rational and painful reform path – especially when times are good – is to demand of them a feat that policymakers in the West had not attempted.Indeed, Raghuram Rajan had referred precisely to these issues in the Andrew Crockett Memorial Lecture he delivered in June 2013.[4] His recent remarks on the collapse of global policy co-ordination, in fact, should be seen in the context of his remarks made then about the large spillover effects from unconventional monetary policies pursued in the West, the unproven efficacy of macroprudential measures, the difficulty of persuading economic participants to practise delayed gratification when times are good..........

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