If it walks and quacks like an emerging-market (EM) balance of payments crisis, is it really an EM balance of payments crisis? We are not yet there, and hopefully it will not come to one. But the patterns recently displayed by global financial markets are sufficiently redolent of capital flight from poorer countries in the past that caution is in order. Start with foreign exchange. In the second quarter, EM currencies had their worst fall in seven years. July started better, but the downward pressure is back on a steady course of interest-rate tightening in the US. This attracts capital to the dollar. Equity investors have been pulling money out of EMs for 10 weeks straight. So have bond investors, though that outflow appears to have been staunched — for now. Seasoned market watchers have seen this movie many times before. In times of low global interest rates, EMs are flooded with cheap lending from the rich economies, reflected in large current-account deficits.The debt that accum...

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