All interest rate increases are not created equal. Interest rates can go up due to expectations of improving economic prospects. Alternatively, they can be pushed up by rising inflation expectations. Or they can also increase due to expectations of more aggressive central bank policy. Interest rate increases in advanced economies—especially the United States—can create financial pressures in emerging market and developing economies (EMDEs). Our work indicates that the types of shocks that have driven U.S. interest rates upward during 2022 are especially likely to trigger financial crises in the developing world. In a ... (full story)