Needless to say, this has generated asset mispricing in many EMEs, including excessive real exchange rates appreciations, and logically has opened the door for sudden capital flow reversals.
In addition, the quick recovery in EMEs post 2008, the ample liquidity and opportunities for leverage, and the positive terms of trade shocks that were not taken advantage off to strengthen macrofundamentals, induced some countries to believe that they had some degrees of freedom in macropolicy management that they really did not have.