In recent weeks, the governments of Latin America and the Caribbean have implemented a battery of measures to encourage social distancing and reduce the infection rate of the coronavirus. Although it is clear that human mobility has indeed dropped significantly, important questions persist. How much has mobility declined in the region? In what countries has it dropped the … [Read more...] about Human Mobility Map Shows that People Are Observing Social Distancing
Latin America and the Caribbean is suffering a heavy blow as the novel coronavirus is spreading, governments are sending people home, and only a few businesses are allowed to operate. This happens against a grim backdrop of financial fragility, and a flight to quality assets in developed countries, with the resulting doubling of credit spreads in emerging markets since January … [Read more...] about Fiscal Policy in the Time of Coronavirus: Constraints and Policy Options for Latin American and Caribbean Countries
Latin America and the Caribbean has a difficult puzzle to solve. Growing national income is feeding demands for more and better government services. At the same time, because many governments increased expenditure during the years of the commodity boom and now face less favorable external conditions, they will need to adjust. In a context of external headwinds there is … [Read more...] about Greater Efficiency and the Path to a Prosperous Future for Latin America and the Caribbean
As the U.S. economy continues to grow and the labor market tightens, there is an increasing likelihood that the Federal Reserve will raise interest rates. The consequences will reverberate in Latin America and the Caribbean. Our research suggests there are reasons for concern, but also ways countries can offset the risks. It is key that countries in the region take this … [Read more...] about How Vulnerable Are Latin American and Caribbean Economies to a Sudden Stop in Capital Flows?
Policymakers in emerging economies have long suffered sudden stops, those paralyzing episodes in which foreign credit dries up. Such episodes can cause painful domestic adjustments that exact significant losses in GDP. But not all sudden stops are equal, and they do not all inflict the same amount of pain. Take the case of Latin America. During the Tequila Crisis, when foreign … [Read more...] about What Are the Antidotes to Sudden Stops?