Harvard's Reinhart Issues an EM Warning for 2019

The video discusses the economic challenges faced by China and emerging markets in 2019. It highlights the impact of China's diminishing returns on stimulus, the stability of its currency, and the lessons learned from 2015. The discussion extends to the global impact on emerging markets, focusing on debt issues in countries like Argentina, Brazil, Turkey, and Mexico. The video emphasizes the complexity of external factors, including US interest rates and a strong dollar, affecting these markets.

What is one of the main challenges China faces in 2019 according to the professor?

• Increasing domestic consumption

• Diminishing returns from stimulus measures

• Decreasing foreign investments

• High inflation rates

What does the professor suggest about China's ability to maintain currency stability?

• It is not a priority for the Chinese government

• It is easily achievable with current policies

• It requires significant foreign investment

• It may conflict with avoiding a hard landing

What lesson did China learn from the summer of 2015 regarding currency depreciation?

• Gradual depreciation can prevent chaos

• Currency stability is not important

• Depreciation should be rapid to be effective

• Depreciation has no impact on growth

How does the professor describe the problems faced by emerging markets in 2019?

• They have become systemic and widespread

• They are mostly idiosyncratic

• They are limited to a few countries

• They are easily manageable

Which country is mentioned as having a corporate debt problem?

• Turkey

• Argentina

• Brazil

• Mexico

Which emerging markets are noted for not increasing their external exposure?

• Peru and Thailand

• Turkey and Mexico

• China and India

• Argentina and Brazil

What is a challenge for investors in emerging markets with strong fundamentals?

• Lack of foreign investment

• Political instability

• Scarcity of debt instruments

• High inflation rates