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The Covid-19 pandemic has led to strong increases in goods demand and concurrent supply disruptions to production and distribution. This column uses data from 30 countries to show that in 2021, supply shocks had a negative impact on manufacturing output, while demand shocks had a positive impact. In contrast, both contributed to higher manufacturing goods prices. Furthermore,
Atish R. Ghosh, Jonathan D. Ostry, Mahvash S. Qureshi Non-financial corporations in emerging market economies (EMEs) increasingly rely on foreign currency debt for financing. Since the global crisis of 2008, the amount of dollar-denominated debt of EME corporations has quadrupled. 1 Research has shown that interest rate differentials between EMEs and the US have contributed significantly to this phenomenon (Bruno and Shin 2017). In essence, EME corporations prefer to borrow in foreign currency when there is a ‘carry’, meaning foreign interest rates are low relative to domestic interest r...