Emerging Market Economies: A Definition

Emerging market economies are nations that have made significant progress toward economic development and capitalism.

Categories

There are generally two broad categories of economies, according to the Encyclopedia of the Global Economy: (1) advanced economies, and (2) “other emerging market and developing countries.” Twenty-nine countries were counted as advanced economies in 2004, leaving all the other countries counted as the latter.

Characteristics

  • Emerging market economies (EMEs) are nations that successfully implemented market-oriented reforms. 
  • EMEs are usually lower middle income or upper middle income nations. For example, using World Bank guidelines in 2004, gross national income (GNI) per capita for EMEs was between $825 and $10,065.
  • EMEs have policies and economies that are “growth-oriented.” This is usually determined by looking at the real GDP growth per capita.
  • EMEs have transitional economic and political movement. In many cases, this has meant transitioning from a closed economy to a more market-based, open one.
  • EMEs actively participate in world trade. 

EMEs vs. developing nations

It is also important to note that EMEs are different than developing nations. While EMEs improve economic freedom and development, developing nations are often plagued by poverty, low quality of life, and problematic governments. 

References

  • O'Connor, David E. Encyclopedia of the Global Economy: A Guide for Students and Researchers. Vol. 1. Westport, CT: Greenwood, 2006. Print.