Turkey, South Africa, India, Brazil and, latterly, Indonesia have all run troublesome current-account deficits, which have left them vulnerable to capital outflows.
Large current account deficits make all three countries particularly vulnerable to capital outflows at times of monetary tightening.
The currency is seen vulnerable to capital outflows once the U.S. Federal Reserve begins dialling back the massive stimulus that has fuelled asset prices in emerging markets.
In the last week or so much of the international business press has been focused on the problems of financial stability in developing countries, some of whom have recently become more vulnerable to capital outflows.
They have relied until now on foreign investment to pay for these deficits as well as to finance interest payments on foreign borrowing, making them especially vulnerable to capital outflows that have reached tens of billions of dollars over the summer.
By means of numerical simulations, we show that the larger the relative weight of the foreign reserves target in the central bank's loss function, the larger is the domain of attraction of the stable equilibrium where the economy is not vulnerable to capital flight shocks.
The least vulnerable state capitals are all in the Center-West region: Brasília, Campo Grande-MS, and Cuiabá-MT.
Moreover, Lincoln feared that shifting so many troops south left the Union capital vulnerable to attack.
And nowhere in the UK is more vulnerable than our capital, which imports approximately 80% of its food.
