Macroeconomics and Finance

What Do Voters Want: Help or Skills?

Boosting skills is essential for entering the ranks of the richest nations. Better education and skills, most economists agree, generate the innovation and productivity that lift countries from middle-income to high-income levels such as those enjoyed by the United States and the wealthiest nations in Europe and Asia. Indeed, along with rule of law and […]

Mexico: The Elusive Quest for Prosperity

Problematic policies and institutions have led to an elusive quest for prosperity in Mexico

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 […]

When Central Bank Autonomy Makes All the Difference

Central Bank autonomy can make all the difference for controlling inflation and providing macroeconomic stability

Since the late 1990s, a broad reform movement has swept Latin America, aimed at granting independence to central banks and freeing them from government pressure to print money to finance government spending. Laws have been passed and constitutions changed to allow independent central banks to focus on the fight against inflation. A more complicated case […]

Reducing Volatility from Cross-Border Banking Flows

Regulation can help Latin American nations reduce volatility from cross-border banking flows

How can emerging markets protect themselves from abrupt shifts in cross-border banking flows? That has been a fundamental question for economic policymakers in recent years, including those entrusted with banking supervision in regions like Latin America and the Caribbean. In a study made available online in May, Gabriel Cuadra and I examine the issue, focusing […]

How Latin American Countries Became World Champions of Happiness

Despite many problems, Latin American countries are champions of happiness

Consider two regions: one ranks high in GDP, equality, government transparency, and health care, the other one lags behind, sometimes by a wide margin. Where do you think people feel more upbeat? The answer is anything but intuitive. Many countries in Latin America knock out Western Europe and other advanced economies with their positive energy. […]

China’s Dockless Biking Boom and the Lessons for Latin America

Dockless bikes could solve many problems for Latin America if the regulations are right

They have set off a surge in bike riding, sparked explosive investment, and helped cut air pollution and carbon emissions. But the “dockless” — or stationless — bikes that have transformed China’s cities also have come with significant social and economic costs. As Latin America prepares to embrace them, it would do well to take […]

Latin America Needs Greater Investment and Productivity. This Is Why

Greater investment and productivity could spark growth in Latin America and the Caribbean

As the global economy gains strength and Latin America and the Caribbean recovers from recession, the region is actually falling further behind, continuing to lose its share in global GDP and putting in jeopardy the aspirations of its growing middle class The reasons behind this are complex. But low investment and productivity are fundamental factors. They require […]

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