Are Country Effects Making a Comeback in International Investing?
Anuja Singha, Ph.D., CFA
Senior Invesment Analyst
Kenneth Holley, CFA
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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