However, unconventional monetary policies have not been the primary driving force for this increase in pro-cyclicality, and adverse developments did not arise uniformly across economies. And this brings me to my second point: it seems rather that country-specific factors such as weak institutions, external and domestic financial imbalances, limited exchange rate flexibility and fiscal imbalances were also factors behind the volatility.
13 For example, the sell-off in emerging market economies in January 2014 was concentrated in economies which were more vulnerable; healthier economies in East Asia were largely unaffected. This evidence suggests that the adoption of sound domestic policies allows emerging economies to minimise adverse spillovers, and at the same time benefit from a stronger recovery in advanced economies.