Coping with the Crisis: Policy Options for Emerging Market Countries

摘要: This chapter outlines policies to help solve the debt overhang and bring about recovery in both groups of countries. The current financial turmoil is confronting emerging market economies with two shocks: a ‘sudden stop’ capital inflows resulting from global deleveraging process, collapse export demand associated slump. A key ingredient appears be greater official financing expand ‘policy space’ available (EME) pursue supportive macroeconomic policies—including, countries large overhangs, by helping meet fiscal outlays resolution that overhang. An important first step ensure an adequate framework facilitate rapid workouts. Debt restructuring mechanisms can provide scope for monetary easing reducing negative repercussions exchange rate depreciation on unhedged balance sheets. Depending space, expansionary policy should also deployed support economic activity.