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Showing posts with label advanced economies. Show all posts
Showing posts with label advanced economies. Show all posts

Wednesday, February 25, 2009

Emerging Economies Aren't Isolated From the Recession


According to the decoupling theory, BRIC (Brazil, Russia, India, China) economies or emerging economies would be largely unaffected by a downturn faced by the advanced economies. Over the past few months this theory has been largely discredited, as evidenced by this report from the Reserve Bank of India (India's central bank) and this writeup on the decoupling theory. The reasons for coupling are primary related to India's globalization levels -- 34.7% trade globalization (measured by two-way trade as a proportion of GDP) and 117.4% financial globalization (external transactions as a proportion of GDP).