However, as experience confirms, portfolio capital flows can easily stop and even revert following a change in market sentiment. Due to longstanding, extraordinarily accommodative monetary policies in advanced nations, international markets have tended to react negatively to good news from those economies and vice versa. This apparently awkward behavior seems to reflect the search for yield facilitated by those policies.
Spill overs to emerging markets and musical crises If UMP enhances financial risk taking in the originating country without enhancing domestic investment or consumption, the exchange rate impact of UMP may simply shift demand away from countries not engaging in UMP, without creating much compensating domestic demand for their goods.