Emerging Markets and the International Economic System

An insightful piece from Nobel laureate Joseph Stiglitz

http://www.project-syndicate.org/commentary/us-international-development-finance-by-joseph-e--stiglitz-2015-08

Stiglitz wisely observes a fundamental flaw in the global economy –

“Just a few years ago, Ben Bernanke, then the chairman of the US Federal Reserve Board, talked about a global savings glut. And yet investment projects with high social returns were being starved of funds. That remains true today. The problem, then as now, is that the world’s financial markets, meant to intermediate efficiently between savings and investment opportunities, instead misallocate capital and create risk. There is another irony. Most of the investment projects that the emerging world needs are long term, as are much of the available savings – the trillions in retirement accounts, pension funds, and sovereign wealth funds. But our increasingly shortsighted financial markets stand between the two.”

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Does it make sense to include a disparate group of countries under the rubric of emerging markets?

FT has an interesting piece on classification of economies – Emerging markets: Redrawing the world map
http://www.ft.com/cms/s/2/4a915716-39dc-11e5-8613-07d16aad2152.html#axzz3i2aNha3F