In addition to these tasks of the competitive system, the German concept of the social market economy expressly incorporates elements of social compromise into the overall system.
There was significant spillover effects on global financial markets in particular as they related to a sharp decline in portfolio inflows into Latin America and the Mexican crisis ensued. In contrast, the Fed’s exit in 2004 had a much more muted impact on global markets. Nonetheless, markets reacted quite differently in the two episodes….what was the difference?