Definition of Emerging Markets

What is the definition of "emerging markets"?

If you have ever watched CNBC, Bloomberg or any other financial news network, then you have likely heard the term "emerging market" or "emerging market economy".

The term "emerging market" was coined by Antoine van Agtmael in the 1980s, according to Wikipedia.

financial term definition - emerging marketsAn "emerging market" is one that is in the transitional phase from a developing country to a developed one.

China and India, which are both economic powerhouses, are still considered to be "emerging economies".

"Emerging markets" are usually characterized by rapid growth and a sudden inclusion into the global economy.

This inclusion may have come about due to a regime change or a softening of views towards the rest of the world.

Emerging economies can not longer be considered third world countries due to their inclusion into the global economy, but they also haven't reached first world status yet either.

Investors around the world usually look to put money to work in emerging markets. The reason? They have the strongest potential for growth. Look at China as a clear example of an emerging market that is sopping up investment capital.

Different people have different definitions of the term "emerging market".

Independent studies have found that there are between 23-26 (depending on who you ask) emerging economies throughout the world. These include China, Mexico, Russia and Turkey.

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