It also was considered that countries like China could become engines sustaining world growth, replacing the U.S. economy in that respect. However, the international risk aversion brought about by Lehman’s demise and the global nature and magnitude of the crisis soon engulfed emerging market economies.
The decoupling hypothesis did not stand up, and financial turbulence in industrial countries spread to developing countries mainly through two shocks of considerable magnitude, as follows. 1. 2  An external demand shock.