The Decoupling of Emerging Economies, A Long-Debated Issue but Still an Open Question: A Survey

Emerging economies (EEs) have progressively increased their role in the international economic scenario, to the point that the share in the global economy of EEs [together with Developing Economies] has now reached 50.9 % in 2013 (it was 30.9 % in 1980). From an economic point of view, their importance has grown along different dimensional paths, as mirrored by foreign direct investments and portfolio investments, total currency reserves and, in more general terms, their shares in international commercial and financial trade. Technological innovation, on the one hand, and policies encouraging commercial and financial trade, on the other, have lent significant support to integrating individual countries at global level (Globalization). During the globalization period, for the EEs the trade openness ratio rose from 30 % to around 80 % and more interestingly for the EEs the increase in international trade was accompanied by a significant rise in intragroup trading, which grew from 9 % of total foreign trade in 1960 to over 40 % in 2005. Given these evidences a set of issues about the decoupling hypothesis arise. For example, are the Globalization phenomenon and the Decoupling hypothesis incompatible? Which approaches did scholars adopt in the empirical investigation of the Decoupling hypothesis? How has the prevalent opinion among academics and leading international observers changed historically? All these issues have been long debated and this critical survey aims to retrace the steps of this debate.