As the rich world lurches from one crisis to the next, a consolation has been that emerging economies, which account for about half of world output, have been growing quickly. Even the wretched euro zone has a few racy emerging markets nearby. A deep recession in the currency zone would leave few countries unscathed, even in fast-growing emerging Asia. For developing economies closer to home, the euro zone’s banks may be the main route by which the suffering spreads. The current-account balance is a rough guide to which countries are most vulnerable. On that basis, Asia is generally a safer place than Eastern Europe, where several countries run large current-account deficits, and so rely in part on fresh loans from big European lenders.
This was a nice article. However, in the article i read it talked about how there was going to be a collapse in China. IF China does collapse then we would have all sorts of problems and the Asian markets wouldn't be unscathed. This idea rests too much on Asian markets that inflate their numbers.
ReplyDeleteIn essence of a lowering currency value, countries will bear even more crisis in the future. Even if this recession problem is somehow solved, countries will take larger hits in years to come. The cycle of recession to prosperity is a constant occuring economic path. If European countries are suffering now, wait twenty years. Sustaining an economies debt and spending is only one issue and can be adjusted as it was in the U.S. Banks in debt is the biggest problem that could possibly hit an economy. If there is no flow of money in and out, banks will bust. A person depositing plays a huge role and the person being lent should in return righteously pay back all of the money lended.
ReplyDeleteI couldn't agree with the artible that Asian maket is safer than East Europe. Maybe the economy in Asia, especially East Asia is booming right now, but no one can exactly predict the future. There are many risks in a fast developming area, and I think this happened once before in the 1990s.
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