Brazil, Russia, Turkey Potential Sources Of Contagion: Oxford Economics

After making a detailed assessment of lessons from recent market episodes and historic crises, analysts at Oxford Economics observe that Brazil, Russia and Turkey head the list of potential contagion generators, though given its global economic significance, China is much more important than it was in the past.

Gabriel Sterne and Adam Slater at Oxford Economics in their November 25, 2015 research note titled: “How contagious are EM?” note overpriced risk assets, fears of monetary tightening and liquidity drains appear to be bigger concerns to markets than EM-sourced contagion.

Limited EM-originated contagion for nearly 2 decades

Sterne and Slater point out that China’s stressful summer led to the first major EM-related spike in global market volatility for years. They note after...