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
Macroeconomics and Finance
A New Report Stresses Reforms to Boost Productivity and Seize Markets in an Uncertain World
Latin American and Caribbean institutions moved forcefully to head off dangers in 2023. Central banks swiftly raised interest rates in the face of inflation, and governments imposed well-considered fiscal policies that brought average primary balances to a level superior to that before the COVID-19 pandemic. Along with strong financial regulation and supervision and resilient … [Read more...] about A New Report Stresses Reforms to Boost Productivity and Seize Markets in an Uncertain World
Fiscal Rules for Commodity-Dependent Economies
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
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?