How Can the Crisis Vulnerability of Emerging Economies Be Reduced?
Jul 11, 2014: Emerging countries are often more crisis-prone than highly developed industrialised countries. In many cases, this is due to a comparatively weaker or more volatile financial sector. A new Ifo research report shows that the best policy to strengthen crisis resistance is to build up a sound macroeconomic and fiscal policy position; and that this helps a country hit by a crisis to overcome it more quickly. To this end, however, an important additional condition must be fulfilled: the country must increase its international competitiveness in order to achieve sustained growth.