Debt levels in Latin America and the Caribbean increased steadily during the last decade and soared in 2020 with the COVID-19 pandemic, reaching 72% of GDP. In response to the pandemic, countries mobilized considerable resources to support families and firms. Since 2020, debt ratios have declined as economies recovered and fiscal deficits were shaved. Still, with falling growth … [Read more...] about Debt, Growth, and Interest Rates: Assessing Sustainability in Latin America and the Caribbean
Macroeconomics and Finance
The Delicate Balance of Protecting Income While Fighting Inflation
With food inflation for a median country in Latin America and the Caribbean running at 14% in 2022, its highest level in 20 years and even core inflation -- excluding energy and food -- running at 7%, central banks in the region have been compelled to keep interest rates aloft. This has contributed to an important social goal because the poor spend the largest share of their … [Read more...] about The Delicate Balance of Protecting Income While Fighting Inflation
Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition
Much has been written — much of it in alarm — about the observed increase in market concentration at the economy-wide level over the past 30 years. The evidence for this is uncontroversial: From 1997 to 2014, concentration increased in 75% of industries in the United States. It isn’t a big leap from there to conclude that this trend is reducing competition and increasing … [Read more...] about Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition
Multinationals and the Structural Transformations of Economies
Recent decades have seen large structural transformations, with many agricultural economies moving towards more productive manufacturing activities and manufacturing-based economies evolving to more productive service-based ones. At the same time, global integration has grown in importance due to an extraordinary increase in the cross-border movement of goods, services, and … [Read more...] about Multinationals and the Structural Transformations of Economies
Preparing the Macroeconomic Terrain for Renewed Growth
Since 2020, the economies of the world have been hit by a series of severe shocks, most dramatically the COVID-19 pandemic and the Russian invasion of Ukraine. As a result, after growing around 3.9% last year, Latin America and the Caribbean region now faces considerably lower growth projections for 2023, with private forecasters predicting growth at around 1%. It also … [Read more...] about Preparing the Macroeconomic Terrain for Renewed Growth