Even amongst rich economies this condition does not hold, largely because investors still worry about the risk of unforeseen exchange-rate depreciation.

ECONOMIST: Capital goes global

You forget that the two main emerging countries that targeted inflation during the 1990s Chile and Israel successfully withstood a major test in 1997-99, in the form of exchange-rate depreciation caused by financial contagion and terms-of-trade deterioration in the wake of the Asian crisis.

ECONOMIST: Letters

That is a bigger depreciation than the one that occurred after the pound was kicked out of the European exchange-rate mechanism in September 1992 and fell by 18%.

ECONOMIST: The economy after the election