Slowing global trade is evidence of how emerging-market stresses are being transmitted to advanced economies. The real concern of contagion remains financial linkages, though.
Since 2009, non-resident gross flows into EM financial assets — loans, debt and equity securities — have averaged around $1 trillion annually, although the figure has been volatile. Total outstanding exposure, which remains opaque, may be around 50 percent of GDP in advanced economies. The main driver has been accommodative monetary policy of developed-world central banks and the lure of higher returns.