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q-3 - a Are growing large and powerful b The BRICs i Brazil...

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Investing in Emerging Markets or why are you going to these places? I. Questions a. What was the biggest emerging market in the 19 th century (the US) b. The most important thing to consider when investing in an emerging market is c. Emerging econ governments do a better/worse job managing their d. Name 3 economies which have graduated from “emerging markets” e. Name one thing each of these countries is famous for producing f. What does the phrase “terms of trade” mean (barriers of trade, used to determine how competitive they can be) II. What does an emerging markets portfolio manager look at? a. Economic fundamentals: world and country b. Be a “development economist” i. What do they have to offer, what do they have a disadvantage in, how are there ports, how are their bars, transportation methods, infrastructure etc… c. Demographics i. Religion, gender, race, health, income, etc. d. Domestic political stability e. Who is next door? f. Surviving economic collapse III. Emerging economies
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Unformatted text preview: a. Are growing, large, and powerful b. The BRICs i. Brazil, Russia, India, China c. Purchasing power parity basis i. How much something in one country would cost relative to in another d. International Reserves i. What the international bank holds in their reserves that the country has earned through all their exports ii. Controversial e. Developing nations engage in costly self-insurance, political freedom is not necessarily conducive to growth i. According to Dani Rodrik ii. The amount of reserves that developing countries are holding is rapidly increasing 1. The developed world needs Capital! iii. Fiscal balance: gov. debt vs. equity 1. Advanced economies run a huge deficit to fund their spending IV.Anne Krueger : “government failures in development” a. Role is to provide infrastructure to facilitate economic development b. Crony Capitalism is bad for growth i. Friends and family plans for senior politicians V. Lecture notes a....
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