Chart 13 Correlations among emerging market equity and commodity indexes  Since the emerging economies are not hampered by the aftereffects of the bursting of the bubble, the stimulative effects of such capital inflows could be unexpectedly large.
This series changes gradually over time and hence needs no smoothing. Figure 7 shows changes in these two series. Since 1996 the capital stock has increased at a higher rate than the labour input. Hence since 1996 there has been a rise in the capital/labour ratio. This rise, together with a slight lift in MFP, explains the rise in labour productivity over this period.