Matthew C Klein, Columnist

Emerging Markets Should Quit Their Whining

Countries that distorted global capital flows before the crisis have no right to complain about the withdrawal of money from the rich world.

August 27, 2013 at 3:32 PM EDT

By Matthew C Klein

Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and its economics blog, Free Exchange. Before that, Klein was a research associate at the Council on Foreign Relations, where he spent more than two years studying the history of the Federal Reserve and the intellectual history of monetary economics for an upcoming book by Sebastian Mallaby. He also worked at Bridgewater Associates, where he studied the economies of Central and Eastern Europe and advised institutional investors on asset-liability management. Klein has a bachelor's degree in history from Yale University. Originally from Chicago, he lives in New York.

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Emerging markets have been among the biggest victims of bets that the U.S. Federal Reserve is getting ready to take away the monetary punch bowl. This has led to a lot of whining from people who ought to know better. Central bankers in the U.S. and elsewhere shouldn't worry about the effects of their policies outside their borders.

Let's start with some context. The Indonesian stock market has lost nearly a quarter of its value since the end of May. The Brazilian real is now more than 26 percent cheaper relative to the dollar than it was back in 2010, when Guido Mantega, Brazil's finance minister, warned that loose U.S. monetary policy would start a global "currency war." (I guess Brazil won!) Panama's 40-year bond, which was issued at the end of April, is now trading around 75 cents on the dollar.

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