Firms in the developed world rely heavily on bank credit. But firms in developing countries, and particularly those in Latin America, rely much more heavily on trade credit--i.e. credit from their suppliers --and that has immense implications for pricing decisions and inflation. Most studies that have looked at inflation in emerging economies have examined the role of domestic … [Read more...] about How the Financing of Firms Affects Prices
About Victoria Nuguer
Reducing Volatility from Cross-Border Banking Flows
How can emerging markets protect themselves from abrupt shifts in cross-border banking flows? That has been a fundamental question for economic policymakers in recent years, including those entrusted with banking supervision in regions like Latin America and the Caribbean. In a study made available online in May, Gabriel Cuadra and I examine the issue, focusing on how … [Read more...] about Reducing Volatility from Cross-Border Banking Flows
Dealing with Corporate Debt and Rising Interest Rates
They have risen bit by bit. But since the financial crisis in 2008, the Fed has kept interest rates in the United States exceedingly low. Now with healthier economic growth and employment in the United States, that may be changing, and Latin American countries need to be on their guard. Latin America's major economies have accumulated large amounts of foreign corporate debt … [Read more...] about Dealing with Corporate Debt and Rising Interest Rates