When, due to some shock, the economy is operating below its potential for other than a brief period, we would expect that part of the stabilising mechanism would be that interest rates would be lower than neutral. And they would be higher than neutral when the economy was tending to overheat.
Growth has improved in India, buoyed by a new optimism since the elections. Despite lower commodity prices, growth on the African continent remains robust. Most emerging markets have weathered the turbulence caused first by “taper talk” and then by actual tapering, which is likely to conclude this month. The Eurozone is the key exception.