The emerging markets before and after the global financial crisis :the case of Brazil -

Abstract

This is one of those studies pertinent to the crises’ influence over the rest of the world; more specifically I’ll be looking at the consequences it had on the emerging markets’ exchange rate and local currency markets. Recent and daily data has revealed an overall and important depreciatory trend in their respective currencies; countries such as Indonesia, Turkey, Brazil, and India are concerned among others. Most of them have been trying to get out of it by enforcing tight monetary policies and hiking interest rates. This risks slowing global economic growth and thereby dampens the global economic recovery. After a general introduction, chapter I reviews the literature on exchange rate and currency crisis and other related crises. Chapter II outlines in detail the implications of the global financial crisis on Emerging Economies and delineates the importance of transmission channels. Chapter III is an empirical analysis of Brazil because of its latest currency devaluation and possible implications in a forthcoming currency crisis. Then I will conclude with a slight look at Brazil’s status quo and the implications this has on the governmental policies.