For example, Adam Tooze published a widely read essay in Foreign Policy describing the coronavirus as the ‘biggest emerging market crisis ever’, which included the claim that, and I quote, “At the head of the list of vulnerable countries is South Africa”. This year’s financial market storm has hurt a wide range of countries.
The first is that in standard macroeconomic models, there are no limits to consumption smoothing over time due to the large intertemporal elasticity of substitution and the absence of borrowing constraints. The second is that inflation expectations respond instantaneously to any change in policy.