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The Hidden Debt Burden of Emerging Markets

To commemorate its founding 25 years ago, PS is republishing a selection of commentaries written since 1994. In the following commentary, Carmen M. Reinhart worried that the capital-flow reversal hitting these countries may be larger than we think.

LIMA – As central bankers and finance ministers from around the globe gather for the International Monetary Fund’s annual meetings here in Peru, the emerging world is rife with symptoms of increasing economic vulnerability. Gone are the days when IMF meetings were monopolized by the problems of the advanced economies struggling to recover from the 2008 financial crisis. Now, the discussion has shifted back toward emerging economies, which face the risk of financial crises of their own.