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Emerging markets different this time?: "That's the question that Buttonwood asks in the Economist. And provides an interesting roundup of evidence that many emerging markets aren't as vulnerable as they were when the Asian crisis hit, with follow-on waves of Russian and Latin American contagion.

In addition to the benefits of having pursued sounder macropolicies, the emerging markets as a group are enjoying a far healthier composition of the money that's been pouring into emerging markets assets recently, attracted by better returns than in more developed markets.


In a study released last week, Christian Stracke of CreditSights, a research firm, compares emerging economies’ dependence on portfolio inflows now and eight years ago. (Portfolio investment—as opposed to foreign direct investment—is generally fast and easy to liquidate, and so includes the sort of “hot money” that travels fast and upsettingly.) Looking at 25 countries, he finds that dependence is generally much lower, but patchily so.

As the table shows, portfolio liabilities in the 18 months to June 2005 for the group as a whole were $118.5 billion, far less than the $170.7 billion that came in before June 1997. This averages out some very different experiences: both Argentina and Brazil have seen liabilities decrease sharply, while India, Poland and Hungary "