The U.S. Federal Reserve is being widely blamed for the recent eruption of volatility in emerging markets. But is the Fed just a convenient whipping boy?
It is easier to blame the Fed for today's global economic problems than it is to blame China's secular slowdown, which reflects Chinese officials' laudable efforts to rebalance their economy. Likewise, though Japan's "Abenomics," by depressing the yen, complicates policymaking for the country's neighbors, it also constitutes a commendable effort to bring deflation to a long-overdue end. So, again, it is easier to blame the Fed.
And, for the affected emerging economies, the Fed's tapering of its massive monthly purchases of long-term assets — so-called quantitative easing (QE) — is certainly easier to blame than their own failure to move faster on economic reform.
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