An Irish joke runs that a tourist, lost in the countryside, asks a local the way to Dublin. The Irishman ponders the question carefully and looks at the puzzled foreigner, and after a good while responds, “It’s complicated, I wouldn’t start from here.” And so it is with most sovereign debt restructurings, but does it always have to be this way? Delay risks dire consequences; … [Read more...] about Debt and Money: Tales from Greece, Argentina and Puerto Rico and the Danger of Delay
Macroeconomics and Finance
Boring Banks, Safe Economies?
Banks in Latin America and the Caribbean have been through a lot. At times they have been culprits and, through excessive risk-taking or fraud, provoked crises, while at other times they have been victims as fiscal profligacy and/or currency crises lead to financial disaster. In some cases, the interaction between macroeconomic policies and financial sector risks led to deep … [Read more...] about Boring Banks, Safe Economies?
Do the Rich Save More in Latin America?
By: Néstor Gandelman Does an industrial businessman in Monterrey, Mexico, save a bigger percentage of his income than a rural worker in Chiapas? Whether the rich save more is a longstanding question with important policy implications that has different answers according to each country or region. What happens in Latin America? In an analysis of 14 Latin American and Caribbean … [Read more...] about Do the Rich Save More in Latin America?
What do Ireland and Costa Rica Have in Common? A World of Possibilities.
Besides stunning landscapes, abundant natural resources, folklore, music and a joyful approach to life, Costa Rica and Ireland have in common openness to internationalization. Both countries illustrate —with different strategies—the importance of the macroeconomic context, institutions, and the trade regime to successfully attract foreign direct investment. Despite the near … [Read more...] about What do Ireland and Costa Rica Have in Common? A World of Possibilities.
Commodity Prices: over 100 Years of Booms and Busts…
Commodity prices are very persistent. During booms we seem to forget that they have always (yes, always) been followed by busts (see Figure 1). And during a slump we forget that a boom is surely going to come along— we just have to wait long enough. What determines such booms and busts? Was the last boom exceptional? Where are prices today relative to long-run trends? And the … [Read more...] about Commodity Prices: over 100 Years of Booms and Busts…