What Is the Relationship Between Fiscal Imbalances in Emerging-Market Economies

question 29

Essay

What is the relationship between fiscal imbalances in emerging-market economies and financial crises?

---

Definitions:

Liquidity Preference

A theory that suggests individuals prefer to have their resources in liquid form to meet immediate demands for funds.

Irving Fisher

A renowned American economist known for his contributions to the theory of interest and the Fisher Equation.

Price Level

A general average of the ongoing prices for goods and services within the economic sector.

Foreign-Currency Exchange

The process by which individuals and entities convert currency from one country's currency into another, understanding the dynamic exchange rates between currencies.