It never rains but it pours sometimes seems to be just too appropriate a motto for Latin America and the Caribbean. Just as Argentina and Brazil appear set to post positive growth this year, uncertainty regarding global protectionism and the prospects of higher U.S. interest rates could dampen growth prospects across the region, as explained in the 2017 IDB Latin American and … [Read more...] about A New Trade World: Routes for Latin America and the Caribbean to Grow
Macroeconomics and Finance
Rethinking Taxation to Protect Savings
Taxation and savings are inextricably linked. While taxation puts more money in the government’s hands, it also decreases private savings by leaving people and firms with less income to save, invest, and grow the economy. Despite this clear relationship, the negative impact of taxation on private savings is often the blind spot when policymakers tackle tax reform in Latin … [Read more...] about Rethinking Taxation to Protect Savings
Trade: Winners and Losers in the North and South
After the Brexit referendum and the US election, commentators on all sides have sparred over who are the winners and losers when it comes to trade. Most economists agree that more trade on the whole is good, but that its impact can vary dramatically. The relationship between trade and inequality is then less obvious. For starters, the impacts of trade on inequality may be very … [Read more...] about Trade: Winners and Losers in the North and South
Severing the Link Between Oil and Conflict
The explosives ignite, the pipeline bursts, and tens of thousands of barrels of oil pour into grasslands and rivers, destroying a vital source of income and large quantities of animals and fish. Frequent attacks on pipelines by leftist rebels over the last 20 years have devastated fragile ecosystems in Colombia and cost the government hundreds of millions of dollars in lost … [Read more...] about Severing the Link Between Oil and Conflict
Searching for a New Macroprudential Framework
The policy of quantitative easing led by advanced economies and the subsequent surge of capital flows to emerging economies (EMEs) after the global financial crisis together with their recent reversal have highlighted the need to tailor a macro approach for EMEs that incorporates financial stability as an explicit policy target. But what should the approach be? Should it take … [Read more...] about Searching for a New Macroprudential Framework