Inflation in Latin America is currently running at its highest level in 15 years. With uncertainty about how it will unfold, the expectations of people and firms are largely de-anchored, meaning distinct from the central banks’ target levels, and thus a potential source of even greater inflation. Meanwhile, as world interest rates rise, countries in the region are finding it … [Read more...] about Lessons from the Lost Decade for Confronting Inflation Today
#Inflation
Inflation and Its Impact on the Poor in the Era of COVID-19
Inflation has become a growing concern for central banks in Latin America and the Caribbean. The recovery in economic activity was stronger than expected in the first months of 2021, reflecting the stimulus that governments deployed to mitigate the effects of the pandemic and higher mobility and lower containment measures. However, inflation and inflation expectations in the … [Read more...] about Inflation and Its Impact on the Poor in the Era of COVID-19
Fighting Inflation With Better Communication
As the chair of the United States Federal Reserve from 2006-2014, Ben Bernanke liked to say that monetary policy is 98% talk and only two percent action. In other words, what the central bank says is hugely important. It can affect households, firms, and market expectations, and, in turn, impact the economy. That message could not be more important when considering inflation … [Read more...] about Fighting Inflation With Better Communication
What Brazil Can Teach About Fighting Inflation
For much of the 1980s and early 1990s, Latin America and the Caribbean was in the throes of hyperinflation. In 1990, for example, 16 of 20 countries in the region had inflation rates above 20%, while in 2018 only three of those countries had inflation above 8%, according to IMF figures. The main ingredients to that success were fiscal reforms, debt negotiations that allowed … [Read more...] about What Brazil Can Teach About Fighting Inflation
Central America and the Dominican Republic: Internal Strengths to Face External Challenges
The economies of Central America and the Dominican Republic (CADR) have been facing significant challenges that are not limited simply to fiscal issues. We trust that the region will improve its resilience to these challenges by consolidating its economic fundamentals, continuing to push for regional integration, and strengthening its institutions. All of this will contribute … [Read more...] about Central America and the Dominican Republic: Internal Strengths to Face External Challenges