In 2014, for the fourth year in a row, the growth rate of Latin America and the Caribbean, although still positive, has been lower than the year before: a bare 1.2% compared to 2.8% in 2013. The price of non-energy commodities —soybeans, copper, iron, etc.— has fallen 7.5% on average and will do so by at least another 10% in 2015, while the price of oil will fall a total of … [Read more...] about Poverty: The Reality behind the Data
Macroeconomics and Finance
By Eduardo Cavallo, Eduardo Fernández-Arias and Andrew Powell This week, the IMF cut its growth forecasts for the Eurozone by 0.2 and 0.3 percentage points for 2015 and 2016, prompting it to cut its global economic growth forecasts by a similar magnitude. Clearly, economic expectations are turning increasingly pessimistic. The reasons that could explain this “economic … [Read more...] about Latin America’s Advice to Europe: Be Decisive!
Entrepreneurship in Latin America bears no resemblance to that of other regions: beginning with size—most businesses are micro or small— and ending with motivation—entrepreneurs are what they are more "by necessity" than "by opportunity." On top of these traits, Latin American entrepreneurs have little appetite for risk and innovation which, together with the limited … [Read more...] about A Comparative Disadvantage for Latin American Entrepreneurs
Productive development policies (or industrial policies) can prove to be a key tool for a country’s development. Yet, as experience in Latin America clearly shows, they can also create serious problems. Nevertheless, these policies take a variety of forms. The key question is: what types of industrial policies should be adopted and which ones should not? This issue was the … [Read more...] about Productive Development Policies in a Nutshell: A Tale of Two Interventions
The performance of the world economy has been disappointing to say the least. After the Great Moderation came the Great Recession, but since 2009 the world has been suffering from a Great Suppression (GS). In Japan, growth is being suppressed by a liquidity trap with interest rates firmly at the zero bound. In the Eurozone, high debts and private sector deleveraging are … [Read more...] about The Great Suppression: What should LAC Expect in the New Year?