Current External Challenges to the Economic Expansion of Emerging Markets : A Balance-of-Payments Constrained Growth Perspective

We present a small analytical framework, built in the Balance of Payments Constrained Growth (BPCG) tradition, tailored to identify how specific financial and structural vulnerabilities of emerging economies (EMEs) restrict their expansion. This framework is applied to shed light on the impact of global shocks and of major macro policy changes in developed countries on the growth path of six economies. As we show, this impact is conditioned by the vulnerabilities and dynamics of their insertion on international trade and capital markets and their exposure to policy changes in the developed centers. Our work shows that the BPCG-approach is a relevant, simple tool to identify EMEs´ challenges in the post-covid 19 era