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But the underlying issue remains macroeconomics, and the question of whether capital will continue to flow to emerging markets as their economic prospects become somewhat less positive.
America's loose monetary policy and concerns about sovereign defaults in the euro zone will encourage capital to flow to emerging economies, making the latter's central banks reluctant to raise interest rates and dampen down inflation.
A multi-speed global recovery is, unfortunately, less stable than a synchronised one, not least because the policy combination that makes sense for the rich world gradually tighter fiscal policy and a prolonged period of cheap money will encourage more capital to flow to emerging economies in search of higher yields, and add to their risk of overheating.
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Private capital flows to emerging markets are expected to plummet 30percentthis yearar.
Provided the Asian situation stabilises, the IIF expects net capital flows to emerging markets to fall only slightly this year, to $171.5 billion.
Analysts at Morgan Stanley estimate that capital flows to emerging economies could fall to $550 billion in 2009 from around $750 billion in 2007 and 2008.
But the rigidity of Argentina's currency board, once seen as a virtue, made it uniquely hard for the country to adapt when capital flows to emerging economies began to dry up after 1997.Argentina shares with Venezuela both the memory of past wealth (from agriculture and oil respectively) and pervasive corruption.
That, in turn, will provoke extra capital flows to emerging economies.
Net equity investment of $133 billion dominated capital flows to emerging markets in 1997.
Internationally, it was given cover to cut rates by what it said were improving investment flows to emerging markets.
EMERGING-MARKET FINANCE After plummeting in 1998, private capital flows to emerging markets are on the rise once again.
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