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What would be the effect on emerging markets if the Fed decides to tighten money supply more abruptly? There would not be major effects on
What would be the effect on emerging markets if the Fed decides to tighten money supply more abruptly? There would not be major effects on emerging market economies. An economic recession in the U.S. could lead to lower import demand in the U.S., leading to capital outflows and currency depreciation in emerging markets. Capital flows to emerging market economies usually increase when there is an appreciation of the U.S. dollar relative to other currencies. Emerging market economies stand to gain from an abrupt monetary tightening policy by the Fed
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