The economic debate has then focused on whether the tapering will trigger a pull-out of capital from the emerging world and potentially trigger a new wave of turbulence, akin to those from 1990s and 1980s.16 Preliminary research suggests that news about tapering did have indeed an impact abroad.
Announcements by chairman Bernanke were are associated with larger nominal exchange rate depreciations, stock market contractions as well as increases of credit default swaps.17 Although the initial impact of these announcements has not been necessarily correlated with the strength of the country’s fundamentals, over time the attention of financial markets has turned towards more fragile countries.