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
#Inflation
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
Putting Latin America and the Caribbean’s 2019 Growth Prospects in Perspective
The outlook for the global economy has shifted from a situation of healthy, broad-based growth across the larger economic blocks to a more nuanced view of growth perspectives, with substantial risks clouding the horizons. Considering the 12 months from 2017 Q3 to 2018 Q3, growth in the United States was 3% but many suggest that this relatively high rate will fade through 2019 … [Read more...] about Putting Latin America and the Caribbean’s 2019 Growth Prospects in Perspective
How the Financing of Firms Affects Prices
Firms in the developed world rely heavily on bank credit. But firms in developing countries, and particularly those in Latin America, rely much more heavily on trade credit--i.e. credit from their suppliers --and that has immense implications for pricing decisions and inflation. Most studies that have looked at inflation in emerging economies have examined the role of domestic … [Read more...] about How the Financing of Firms Affects Prices