In recent years, the global landscape of trade and investment has undergone significant transformations. As economies worldwide grapple with crises and geopolitical tensions, companies and governments are rethinking their strategies regarding production and supply chains. For Latin America and the Caribbean, this could mark a potential turning point if it were to take advantage … [Read more...] about What the Shifting Landscape in Global Value Chains Means for Latin America and the Caribbean
Macroeconomics and Finance
The Imperatives of Fiscal Health
By 2020, at the nadir of the COVID-19 pandemic, Latin American and Caribbean governments had spent so much on health and transfers to keep people and firms afloat that the average primary balance (the budget balance without interest payments on debt) had soared to -4.8% of GDP. Then a positive thing happened. Rather than lingering in deficit, as it had after the 2009 response … [Read more...] about The Imperatives of Fiscal Health
Where Productivity and Prosperity Meet
Between 1960 and 2019, Latin America and the Caribbean grew faster than advanced economies in terms of labor, years of schooling, and physical capital. Yet, the difference in average annual growth between the two groups of countries was striking, with the advanced economies growing 2.6% versus around 1.8% for Latin America and the Caribbean. The biggest difference between … [Read more...] about Where Productivity and Prosperity Meet
Pension Problems and the Need for Reform in the Wake of COVID-19
As COVID-19 struck, governments across Latin America and the Caribbean imposed lockdowns and other restrictions that led to widespread job losses. There was record unemployment in the hospitality, tourism, and retail sectors. Youth, women, and low-income workers suffered especially, and jobs in the informal sector took a hard hit. The increase in remote work that emerged during … [Read more...] about Pension Problems and the Need for Reform in the Wake of COVID-19
Walking the Monetary Tightrope: Latin America’s Challenge in Lowering Interest Rates
As inflation surged in 2021, central banks in Latin America and the Caribbean acted swiftly and aggressively—well before the developed world—to combat inflation by raising interest rates. With inflation largely tamed, they now face considerable pressure to lower interest rates to foster economic growth and ease the burden of debt servicing. But doing so comes with significant … [Read more...] about Walking the Monetary Tightrope: Latin America’s Challenge in Lowering Interest Rates