Growth in Latin America and the Caribbean has been disappointing. For commodity exporters, the exceptional 2002-2012 boom boosted investment and relaxed fiscal constraints, but many countries made little progress on improving underlying productivity and their medium-term growth potential. In other countries, particularly some in the Caribbean and Central America, negative … [Read more...] about Boosting Growth in Latin America and the Caribbean
Macroeconomics and Finance
Minimum Wages and the Fight Against Inequality
Many policymakers say minimum wage hikes are crucial to reducing inequality. They look at Latin America and see abundant evidence, including the fact that in various countries large minimum wage increases during the commodity boom of the 2000s coincided with large inequality declines. There is certainly some truth to the idea. Minimum wage increases during times of strong … [Read more...] about Minimum Wages and the Fight Against Inequality
A New Look at Real Exchange Rates
The real exchange rate — or the cost of a country’s goods relative to foreign goods — has long been a fundamental measure of the strength of a nation's importers and exporters. Among important commodity exporters in Latin America, it is closely tied to the price of commodities. But commodity prices aren't only essential for Latin American trade. Given their critical role as … [Read more...] about A New Look at Real Exchange Rates
The New Free-Market Fervor in Latin America
Latin American countries have a history of veering from left to right in economic affairs: from support for state-driven economic development to support for free markets. But a recent survey shows an upswing in ordinary citizens' enthusiasm for capitalism. And it begs the question as to why and how long-lasting the phenomenon might be. The recent findings are remarkable. … [Read more...] about The New Free-Market Fervor in Latin America
U.S. Tax Reform: Challenges for Latin America and the Caribbean
The massive U.S. reform of corporate taxation that slashed rates from 35% to 21% seeks to increase investment, create jobs, boost wages and spur growth within the United States[1]. But it will unquestionably have global impacts, with likely reverberations for Latin America and the Caribbean. The United States is the world's largest economy and the largest source of foreign … [Read more...] about U.S. Tax Reform: Challenges for Latin America and the Caribbean