Vegh, Carlos, Vuletin, Guillermo.
How do emerging markets move from procyclical fiscal and monetary policies to countercyclical ones? This column argues that a key ingredient is stronger institutions.
Start and stop, procyclical macroeconomic policies have been a chronic policy problem for emerging markets. Expansionary in good times and contractionary in bad times, booms become unmanageable credit expansions and ever-rising asset prices and busts turn into major recessions.
Πηγή: Voxeu