Examining the Interplay of Monetary and Fiscal Policies in Latin America

A project examining the interaction of monetary and fiscal policies in Latin America deepens our understanding of the region

Latin American countries have wide-ranging experiences with economic policies and macroeconomic outcomes. The social and economic consequences have at times been adverse and dramatic. The Monetary and Fiscal History of Latin America project has produced systematic evidence using comparable datasets from these varied historical experiences to help build a knowledge base for the analysis of impacts […]

Boosting Growth in Latin America and the Caribbean

An IDB reports looks at boosting growth in Latin America and the Caribbean

Growth in Latin America and the Caribbean has been disappointing. For commodity exporters, the exceptional 2002-2012 boom boosted investment and relaxed fiscal constraints, but many countries made little progress on improving underlying productivity and their medium-term growth potential. In other countries, particularly some in the Caribbean and Central America, negative shocks, combined with a lack […]

U.S. Tax Reform: Challenges for Latin America and the Caribbean

The U.S. tax reform could reduce tax receipts in Latin America and the Caribbean

The massive U.S. reform of corporate taxation that slashed rates from 35% to 21% seeks to increase investment, create jobs, boost wages and spur growth within the United States[1]. But it will unquestionably have global impacts, with likely reverberations for Latin America and the Caribbean. The United States is the world’s largest economy and the […]

The Good, Bad and Unexpected of Fiscal Rules

Fiscal rules can improve fiscal results, but they can also have unintended consequences

Caribbean countries still face a delicate fiscal situation. While a number of Caribbean economies have reduced their debt burden, the majority face high sovereign debt levels that weigh on their prospects for strong and sustainable growth. In the context of weak fiscal stances and high dependence on foreign external conditions, it makes sense to implement […]

Macroeconomic Challenges for Latin America and the Caribbean

Macroeconomic challenges loom for Latin America and the Caribbean despite its emergence from recession

As the October 2017 meetings in Washington wind down, the good news is that Latin America and the Caribbean is out of recession and set to grow at 1.2% this year. Only three countries (Suriname, Trinidad and Tobago and Venezuela—of the 26 borrowing IDB members) will post negative growth, as opposed to seven countries last […]

Should Reform Tackle Rules and Institutions Together?

In the wake of its banking and economic crisis of 2002, Uruguay took some bold steps. Unlike other countries that squandered the commodities boom of the subsequent years, delaying fiscal reforms and, in many cases, worsening their long-term fiscal stance, the country embarked on a series of integral reforms in virtually every policy area, from […]

Fiscal Discipline: Can Constitutions Help?

By Mark Hallerberg Recently, there has been renewed interest in incorporating fiscal rules directly into constitutions. In 2012, the signatories of the so-called “Fiscal Compact” in Europe were expected to introduce a balanced budget rule that would  “preferably (have) constitutional provisions.” Those signatories included 25 of the current 28 member states of the European Union, […]

How to Adjust: 10 Priorities for Emerging Economies

Many emerging economies, particularly in Latin America and the Caribbean, are facing growing debt, fiscal deficits and low growth. Given the direction of debt-to-GDP ratios, many countries are choosing “adjustment” to maintain sustainability. In this blog, I offer 10 priorities that might guide a period of Considerate Consolidation. Priority 1: Speed. If output is at […]

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