Empirical evidence indicates that movements in the stock market indices of emerging markets, especially those in Eastern Europe but also in parts of Africa, Asia and Latin America, have now become closely correlated with portfolio equity inflows (chart 4.10). Note: The following equity market indices were used: Bulgaria: SOFIX, Czech Republic: PX, Hungary: BUX, Russian Federation: INDEXCF, China: SHCOMP, Republic of Korea: KOSPI, Malaysia: FBMKLCI, Morocco: MOSENEW, South Africa: JALSH, Argentina: MERVAL, Brazil: IBOV, and Chile: IPSA. Most countries were able to smoothen much of the related adverse macroeconomic and distributional effects through countercyclical policies made possible by significantly improved fiscal positions and price stability' achieved during the previous boom years.