Wage compression and the decline in inequality in Latin America: Good or bad?

Eduardo Levy Yeyati, Samuel Pienknagura 10 June 2014

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Unlike most of the developed world, Latin America has seen a notable decline in income inequality in the last decade.

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Topics:  Development Education Poverty and income inequality

Tags:  Latin America, education quality, skills supply

The credit cycle and vulnerabilities in emerging economies: the case of Latin America

Julián Caballero, Ugo Panizza, Andrew Powell 02 April 2014

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Over recent years credit growth in Latin America has been very strong, and countries have become more reliant on foreign bond issuances. These phenomena are linked, and in Caballero et al. (2014), we argue that they may have led to vulnerabilities which domestic and international supervisors are not well-equipped to assess.

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Topics:  Exchange rates Financial markets International finance

Tags:  exchange rates, Latin America, carry trade, credit conditions, original sin

Latin America's fashionable scepticism: Setting the record straight

Augusto de la Torre, Eduardo Levy Yeyati, Samuel Pienknagura 12 January 2014

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There is a wave of fashionable pessimism over Latin America’s future. Expressions such as 'submerging economies' and 'the party is over' have become common in analysts’ and investors’ parlance and, while mainly applied to the BRICS (Brazil, Russia, India, China, and South Africa), they have also contaminated perceptions about Latin America.

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Topics:  Global economy

Tags:  Latin America, long-term growth

Are the golden years for Latin America over?

Ignacio Munyo, Ernesto Talvi 07 November 2013

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Latin American growth is cooling –off sharply. In contrast with the 6.6% average growth rates prevailing between September 2003 and September 2008 – the pre-Lehman-crisis “Golden Years” for the region – LAC-7 GDP growth rates in 2012-13 are decelerating significantly, and reverting back to their mediocre historical average displayed over the last 20 years (see Figure 1).1 Moreover, growth rates are cooling off in almost every country in the region.

Figure 1. GDP growth in Latin America (LAC-7, real GDP growth)

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Topics:  Development Global economy

Tags:  economic growth, Latin America

Sustaining trade reform: Institutional lessons from Peru and Argentina

Elías A. Baracat, J. Michael Finger, Julio J. Nogués, Raúl León Thorne 28 October 2013

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Beyond removing restrictions, trade reform in Latin American in the 1980s and 1990s was also an attempt to reform the culture of policy management, and in some countries to introduce an optimistic, ‘Asian’ perspective into trade politics. In Peru, reforms have been sustained over several changes of president. In contrast, Argentina has introduced multiple restrictions and has reverted to the ‘off-the-books’ forms of policymaking that the adoption of GATT/WTO standards by previous the leadership tried to eliminate.

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Topics:  Institutions and economics International trade

Tags:  WTO, trade liberalisation, Latin America, reform, Argentina, Peru

Who benefits from aid for trade?

Philipp Hühne, Birgit Meyer, Peter Nunnenkamp 31 July 2013

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Donors are widely believed to use aid as a means to foster their own commercial interest (e.g., Berthélemy 2006, Hoeffler and Outram 2011). Nevertheless, assessments of the Aid-for-Trade initiative have largely ignored so far that exporters in the donor countries may be among the main beneficiaries.1 Furthermore, there is limited theoretical guidance with respect to the relative strength of the effects of Aid-for-Trade on recipient versus donor exports.

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Topics:  Development International trade

Tags:  Africa, Latin America, aid, East Asia

Four decades of terms-of-trade booms

Gustavo Adler, Nicolas Magud 04 July 2013

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Throughout history, commodity exporters have been blessed and cursed by the boom-and-bust nature of commodity-price and demand swings (see Spatafora and Tytell 2009).

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Topics:  International finance International trade

Tags:  Latin America, commodities, boom and bust, current-account balance

Save more to improve infrastructure in Latin America and the Caribbean

Eduardo Cavallo 03 April 2013

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Saving and investment, like the chicken and the egg, involve circular causality. But regardless of causality, there is no doubt that Latin America and the Caribbean need more of both.

That the region has an infrastructure problem hardly requires an explanation:

  • There is a gap in terms of the quality and quantity of the stock of physical infrastructure in Latin America and the Caribbean compared with:
    • The region’s needs.
    • The advanced economies.
    • The emerging Asian countries.

The infrastructure gap is visible in:

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Topics:  Development

Tags:  Latin America, investment, Caribbean, savings

The trend reversal in income inequality and returns to education: How bad is this good news for Latin America?

Augusto de la Torre, Julián Messina 07 March 2013

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Latin America witnessed unprecedented economic and social achievements during the last decade. In particular, the year 2003 appears as an important inflexion point for the region’s economic history, a point that we have highlighted in several World Bank publications1. Specifically, moderate poverty (less than US$4 purchasing power parity per capita, which leveled around 45% of total population during the 1990s and until 2003, steadily falls to less than 30% by 2011, allowing more than 70 million Latin Americans to leave poverty in less than a decade.

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Topics:  Labour markets

Tags:  education, income inequality, Latin America

Why scarce small and medium enterprise financing hinders growth in Latin America: A role for public policies

Rolando Avendaño, Niels Boehm, Elisa Calza 27 January 2013

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Small and medium enterprises represent a significant share of emerging economies’ business fabric. Nevertheless, they continue to face multiple challenges in meeting their financing needs. Public financial institutions have come to play an active role in addressing these financing gaps through new operational mechanisms and adapted instruments.

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Topics:  Development

Tags:  Latin America, Finance, SMEs

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