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Citigroup recently detailed in a report that election risks over the next 18 months in 20 countries could play a crucial role in the timing of “things going wrong” in emerging markets.
For example, the financial crisis in Mexico in the ’70s, ’80s and ’90s all coincided with elections. Midterm elections in Argentina in 2001 was followed by the country’s default a few months later.
“It is certainly not the case that there is an ‘election curse’ or that every election is bound to create volatility,” the analysts including David Lubin told Bloomberg. “But there has, historically at least, been some loose connection between elections and crisis.”
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