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Brazilians fret, reasonably, that faster rate rises will attract even more foreign capital.
But he is unready for the tough debate this will entail over letting in more foreign capital and expertise.
India cannot absorb a lot more foreign capital without worrying about stockmarket turbulence or the strength of the rupee.
Fat corporate profits are paying for mergers and acquisitions, which bring even more foreign capital into France.
Allowing a gradual appreciation often simply invites more foreign capital, as investors expect the currency to rise.
Low interest rates in rich economies make life more complicated for policymakers in emerging ones: if emerging-market policymakers raise rates, they attract more foreign capital, fuelling inflation.
Similar(39)
From the start, Mourdock had assailed Lugar for being too detached and bipartisan, but his campaign has focused with particular zeal on Lugar's legacy for foreign policy centrism, at various points accusing Lugar of being a "globe-trotter" who has visited more foreign capitals than Indiana counties.
But loose monetary policy in the rich world makes it hard for emerging economies to tighten even if they want to, since that would suck in even more speculative foreign capital.Walking a fine lineWhether the world economy moves smoothly from the Great Stabilisation to a sustainable recovery depends on how well these divergent challenges are met.
"They've learned they need to open themselves up much more to foreign capital markets," he says.
Industrialized nations began relying more on foreign capital to finance domestic investment opportunities, resulting in unprecedented capital flows to advanced economies from developing countries, as reflected by global imbalances which grew to 6% of gross world product in 2007 from 3% in 2001.
Studies have found that reforms in trade and finance significantly raise growth--when you let people buy and sell across borders, and make banks sounder and more accessible, your economy becomes more efficient and more attractive to foreign capital.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com