March 1, 2013
A lot of the discussion on quantitative easing (QE) has been about the yen, the dollar and the euro. But let’s not forget emerging markets. Economies that are otherwise performing well are suffering the effects. It is hitting Latin America, maybe disproportionately so, because we have floating, market-based rates.
Resisting QE is one of our main challenges. One might argue that appreciation is a good thing, but it puts pressure on the export sector, particularly on agriculture and industry.
As an economy gets wealthier, its exchange rate should appreciate. The rate at which that should occur is the rate that would capture the differences of productivity improvements in the economy. But t
Battling the effects of quantitative easing is one of the biggest challenges facing emerging markets. But capital controls are no solution, says Chile’s finance minister Felipe Larraín