The Interest Rate Paradox In Emerging Markets

In advanced economies, interest rates fall during recessions as investors replace risky assets such as stocks with safe assets such as bonds and cash. This makes fiscal stimulus easier. Everywhere else, recessions create fears of debt default or debt monetization through rapid inflation. Sometimes savers pull their money out of the country to buy foreign assets, causing interest rates to rise.   –  Barron’s,  November 21, 2018

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