volatility of consumption growth relative to that of income growth has increased for more financially integrated developing … economies in the 1990s. Second, increasing financial openness is associated with rising relative volatility of consumption, but … only up to a certain threshold. The benefits of financial integration in terms of improved risk-sharing and consumption …

consumption and investment relative to GDP is larger than in other countries; (v) the cyclicality of consumption and investment is … smaller than in advanced economies and EMs; (vi) there is little comovement between consumption and investment; (vii …) consumption and investment are strongly positively correlated with imports …

In emerging Asia, banks constitute the dominant source of financing consumption and investment, and bank balance sheets … by banks and investment. For example, a capital outflow shock leads to a deprecation that reduces the net worth and … intermediation capacity of banks exposed to foreign currency liabilities. In such cases, the exchange rate acts as shock amplifier …

adopted outside of a recession, based on cutting public consumption, and accompanied by reform to enhance institutions …