First, these capital flows have been driven by many factors, including expectations of more-rapid growth and thus higher investment returns in the emerging market economies than in the advanced economies. Indeed, recent data suggest that the aggregate flows to emerging markets are not out of line with longer-term trends.
The 2007/08 Global Financial Crisis (or the GFC) happened. The GFC led us to uncharted territory as it was a crisis unlike any in the recent past. Let me illustrate. Unlike in 1997/98, when the financial crisis originated from the emerging markets in Asia, the GFC was a crisis that started from the advanced economy world.