In recent decades, numerous governments in Latin America and the Caribbean have adopted fiscal rules, which try to enforce fiscal discipline on governments and stop them from pro-cyclical spending, which involves spending too much when times are good and taking the ax to spending when times are bad. Pro-cyclical policies have been a historical trend in the region. They have not … [Read more...] about Fiscal Rules for Commodity-Dependent Economies
Macroeconomics and Finance
Examining the Effectiveness of a Financial Inclusion Reform in Uruguay
In 2014, Uruguay launched an ambitious financial inclusion program, joining other countries in the region that have sought to give citizens greater access to banking and financial services and encourage the use of electronic payments instruments that avoid the need for cash. Unbanked people in Uruguay, as in other countries of the region, had traditionally lacked ways to … [Read more...] about Examining the Effectiveness of a Financial Inclusion Reform in Uruguay
Can Latin America and the Caribbean Unlock AI’s Potential While Mitigating Its Perils?
This article is the first in a series dedicated to exploring the opportunities and risks of AI for Latin America and the Caribbean Artificial Intelligence (AI) has emerged as a disruptive force that promises to reshape economies across the globe. With its ability to process vast amounts of data, learn from patterns, and make intelligent decisions, AI holds immense potential … [Read more...] about Can Latin America and the Caribbean Unlock AI’s Potential While Mitigating Its Perils?
Fiscal Fatigue in Latin America and the Caribbean: A Growing Threat
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
Developing Domestic Bond Markets for Growth and Stability
Countries in Latin America and the Caribbean have sought to develop deep and well-functioning domestic bond markets since the beginning of the 21st century—a reaction in part to the financial crises of the 1990s and their relationship to government borrowing abroad, mainly in foreign currencies. As a result, the outstanding level of marketable public debt issued under domestic … [Read more...] about Developing Domestic Bond Markets for Growth and Stability