According to popular perception, emerging-market economies have not experienced serious macroeconomic and financial turbulence since the beginning of this century. This perception was not entirely correct because it disregarded spill-over effects of the global financial crises of 2008–2009, the consequences of the decline of oil and other commodity prices in 2014–2016, economic and financial troubles caused by violent conflicts and regional political instability (for example, Ukraine and several Arab countries) or individual cases caused by domestic macroeconomic mismanagement (Venezuela, Zimbabwe and Belarus). Finally, two large emerging-market economies and members of G20 — Argentina and Turkey — were affected by currency crises in 2018. In the case of Argentina, where the scale of experienced turbulence and underlying macroeconomic instability was much larger than in Turkey, authorities had to ask the International Monetary Fund (IMF) to provide a rescue program.
Nevertheless, there were no serial emerging-market crises involving cross-country or even cross-regional contagion, as had occurred in the 1980s or 1990s, except for the former Soviet Union (FSU) where such an intra-regional contagion could be observed, both in 2008–2009 and 2014–2016. Besides, victims of the 1990s crises in Latin America and Asia were only partly affected by the global financial crisis of 2008–2009. Macroeconomic and financial instability did not originate from emerging markets, but from the US and Europe.
Against the above background, this paper has three major purposes. First, it analyzes factors, which decreased frequency and magnitude of emerging-market crises in the first two decades of the 21st century. Second, it looks at risk factors faced by emerging-market economies at the end of 2010s. Third, it comes back to the debate on the most effective anti-crisis policies.
The paper’s structure reflects the above purposes. Section 2 presents basic definitions and the brief historical background of emerging-market crises since 1980s. Section 3 discusses changes in macroeconomic performance of emerging markets since 2000. They resulted in reduced frequency, and magnitude, of financial crises, which, however, did not disappear completely. Section 4 analyzes three recent emerging-market crisis episodes: (i) the spill-over effects of the global financial crisis in 2008–2009; (ii) the consequences of decline in commodity prices in 2014–2016 for their exporters; (iii) turbulence in Argentina and Turkey in 2018. Section 5 comments on risk factors faced by emerging-market economies at the end of the 2010s. Section 6 deals with crisis prevention and anti-crisis policies. Section 7 contains conclusions and general policy recommendations.
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