Moreover, as emerging economies, unlike the U.S. and European economies, do not face large-scale balance-sheet adjustments, the increase in fiscal expenditure has led to high multiplier effects in stimulating domestic demand.
In addition, the funds raised in advanced economies, where interest rates have remained low, have been flowing into emerging economies and has bolstered growth through, for example, an increase in bank lending and a rise in asset prices. However, the developments in those countries and regions have not been even.