May 24, 2018

Krugman Joins Chorus of Doomsayers on Emerging-Market `Crisis’

 Paul Krugman is joining a growing contingent of economists and money managers from Carmen Reinhart to Mark Mobius in warning of a meltdown in emerging markets.

The Nobel Prize-winning economist said the current episode bears some resemblance to the Asian financial crisis in the late 1990s, when developing-nation stocks slid 59 percent and governments raised interest rates to exceptionally high levels.

"It’s become at least possible to envision a classic 1997-8 style self-reinforcing crisis: emerging market currency falls, causing corporate debt to blow up, causing stress on the economy, causing further fall in the currency," Krugman wrote on Twitter.


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