When war broke out between Russia and Ukraine at the end of February, businesses and governments in Latin America and the Caribbean worried that the war's disruptions would cause significant harm to the region's trade. What now seems clear is that rather than being deeply harmed, Latin America and the Caribbean has a significant opportunity to step in, relieve supply … [Read more...] about Boosting Trade to Alleviate Pressures from the Russia-Ukraine Conflict
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Towards Inclusive Growth in Latin America and the Caribbean
As 2019 draws to a close, Latin America and the Caribbean faces at least four big challenges. First, growth this year is well below potential. Second, potential growth is low. Third, the region remains subject to large shocks. And fourth, despite recent gains, inequality remains high and aspirations are outstripping the meagre outlook, contributing to protests across the region … [Read more...] about Towards Inclusive Growth in Latin America and the Caribbean
The Psychology of Support for Trade
Is free trade beneficial to Latin America and the Caribbean? Most economists believe it is. Free trade allows countries to specialize in what they do best, developing competitive advantages and leading to greater consumer choice and lower prices. Most citizens seem to agree. An IDB-commissioned poll, included in the cross-regional Latinobarómetro survey, finds popular … [Read more...] about The Psychology of Support for Trade
Mexico: The Elusive Quest for Prosperity
Imagine a country that does everything that development economics says is right: guarantee macroeconomic stability, maintain an open trade regime and invest in physical capital and education. Now imagine, that this this country suffers anemic growth and has done so for over two decades. What in the world could be wrong? This is the agonizing question facing Mexico and the … [Read more...] about Mexico: The Elusive Quest for Prosperity
A New Look at Real Exchange Rates
The real exchange rate — or the cost of a country’s goods relative to foreign goods — has long been a fundamental measure of the strength of a nation's importers and exporters. Among important commodity exporters in Latin America, it is closely tied to the price of commodities. But commodity prices aren't only essential for Latin American trade. Given their critical role as … [Read more...] about A New Look at Real Exchange Rates