During the COVID-19 pandemic, governments in Latin America and the Caribbean spent generously to support families, firms and banks, helping to ease the economic pain but also pushing public debt well above historic levels. Those levels of debt, which stood at 72% of GDP across the region in 2020, create substantial strain on countries in the region. Some see their currency … [Read more...] about Fiscal Fatigue in Latin America and the Caribbean: A Growing Threat
Juan M. Hernández
Juan M. Hernández is a Research Economist in the Research Department at the Inter-American Development Bank. He received his Ph.D. in Economics from the University of Pennsylvania in 2017, just before joining the IDB. He holds a B.Sc. in Economics, a B.Sc. in Mathematics and a M.Sc. in economics from the Universidad de Los Andes in Colombia. Prior to starting his Ph.D. studies in 2011 he spent 4 years as an Economist in Colombia’s Central Bank (Banco de la República). His research interests are in the fields of international finance, macroeconomics and financial frictions. Juan has been working on Sudden Stops and balance of payments crises, analyzing the role of international reserves and macroprudential policies in preventing such events. He also works on understanding the incidence of taxes and access to credit on the decision to become an entrepreneur, taking into account information asymmetries; designing optimal financial regulation and taxation policies that maximize productivity. Another topic Juan is currently studying is optimal progressive taxation in environments where informality and tax evasion diminish the revenue redistribution the tax authority can achieve.
Debt, Growth, and Interest Rates: Assessing Sustainability in Latin America and the Caribbean
Debt levels in Latin America and the Caribbean increased steadily during the last decade and soared in 2020 with the COVID-19 pandemic, reaching 72% of GDP. In response to the pandemic, countries mobilized considerable resources to support families and firms. Since 2020, debt ratios have declined as economies recovered and fiscal deficits were shaved. Still, with falling growth … [Read more...] about Debt, Growth, and Interest Rates: Assessing Sustainability in Latin America and the Caribbean
Foreign Investment Drops and Concerns Rise in Latin America and the Caribbean
As the COVID-19 pandemic faded in 2021, markets expressed optimism in the worldwide economic outlook and capital flows to emerging markets recovered. It was not to last. The central banks of developed economies are now mopping up the abundant liquidity they had in place since the Great Financial Crisis to fight inflation in their own countries. Geopolitical risks in 2022 have … [Read more...] about Foreign Investment Drops and Concerns Rise in Latin America and the Caribbean
The Impact of War on External Financing in Latin America and the Caribbean
Since March of 2022, the war between Russia and Ukraine has significantly impacted the global economy, affecting recovery from the COVID-19 pandemic and reducing or halting growth in most of the world's regions. By disrupting the supply of agricultural and energy commodities, it has also fuelled inflation, which was already running hot before the war broke out. Latin … [Read more...] about The Impact of War on External Financing in Latin America and the Caribbean
Why Chileans Brought Money Home While Colombians Sent It Abroad in 2020
Chile and Colombia are two of the most solid economies in Latin America and the Caribbean. While in 2020 they contracted 5.8% and 6.8%, respectively, they were among the strongest performers in the region amid difficult circumstances. Both are open market economies, with flexible exchange rates and access to foreign markets. They also have faced social unrest and protest … [Read more...] about Why Chileans Brought Money Home While Colombians Sent It Abroad in 2020