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Are Country Effects Making a Comeback in International Investing?

Are Country Effects Making a Comeback in International Investing?

 

Authored by: 
Anuja Singha, Ph.D., CFA 
Senior Invesment Analyst 

Kenneth Holley, CFA 
Portfolio Manager 

As global economies continue to decouple, policymakers are left with primarily two options to stimulate growth - fiscal and monetary policies. There is limited scope for fiscal stimulus as many governments are not in a position to undertake this path either because of political disagreement about its benefits, or concerns over rising indebtedness. Hence many countries have chosen the simpler route of expansionary monetary policy. Furthermore, the recent deflationary backdrop is more conducive for monetary easing.

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