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?
Macroeconomics and Finance
When Less Informality Means Less Inequality
To work in the informal sector, as roughly half of Latin Americans do, is to labor in the shadows. It often means working for firms that neither register with authorities, pay taxes or abide by labor regulations. It is to be deprived of health insurance and contributory pensions. And it generally means limited career advancement, as most firms employing informal workers do … [Read more...] about When Less Informality Means Less Inequality
IDB-Columbia Course for Policymakers Opens for Applications
Columbia University and the Inter-American Development Bank (IDB) are offering the next edition of their popular executive course on macro-financial policymaking in emerging markets from April 23-27 in New York. Open to policymakers from developing world governments, as well as economists working in international financial institutions and investment bankers, the intensive … [Read more...] about IDB-Columbia Course for Policymakers Opens for Applications
The Big Adjustment: Fiscal Challenges for Latin America and the Caribbean
An old Irish joke has a tourist in the rural west of Ireland asking a local if he knows how to get to Dublin. After a long pause and considerable thought, the local replies, “yes, but I wouldn’t start from here.” Unfortunately, with the highest overall fiscal deficit of any region of the world in 2017 (over 6% of GDP) this is a bit how it feels in Latin America and the … [Read more...] about The Big Adjustment: Fiscal Challenges for Latin America and the Caribbean
How Political Polarization Holds Latin America Back
There are countries where there is a great deal of consensus on issues of national importance, and countries where that consensus is lacking, where the population is divided, distrustful of political opponents, and unwilling to compromise. The latter are polarized societies, and their cleavages lead to worse outcomes in a whole gamut of areas, ranging from greater insecurity … [Read more...] about How Political Polarization Holds Latin America Back