LAC Success Put to Test

World Bank

LAC Success Put to Test

Autores

World Bank

Editor

Washington, DC

Descripción

This semiannual report, a product of the Office of the Chief Economist for the Latin America and the Caribbean (LAC) region of the World Bank, examines the nature of the very good overall performance of the LAC region in the aftermath of the 2008-09 global financial crisis and presents a comparative analysis of the post-crisis recovery patterns in the region vis-a-vis other regions. The first part of this report provides an overview of recent economic developments, an in depth look at the drivers of the post-crisis performance in the region, analyzes the external and domestic risks that could drag down growth performance in LAC, and discusses policy response options. The second part of the report documents the adverse impact of the crisis on the Caribbean region as well as its slow recovery. It distinguishes the poorer performance of English speaking Caribbean nations vis-a-vis non-English speaking ones, and highlights the dependence of the region on countries in the epicenter of the crisis, especially the United States, and the limited fiscal space that disabled a counter-cyclical policy response. The report concludes by emphasizing that skillful cycle management is necessary although far from sufficient to be able to turn what has to date been a cyclical recovery into a higher rate of trend growth. Moreover, countries experiencing a formidable windfall from the high commodity prices are in a unique position to seize the opportunity by judiciously saving and investing out of the windfall, they could relax the structural speed limits that have so far kept economic activity from rising to a higher long-run growth path.

Palabras clave

ABSORPTIVE CAPACITY, ACCUMULATION OF RESERVES, ADVANCED ECONOMIES, ADVERSE CONSEQUENCES, ADVERSE EFFECTS, ADVERSE IMPACT, AGGREGATE DEMAND, AGRICULTURE, ARBITRAGE, ARIMA, ASSET PRICE, ASSETS, BALANCE OF PAYMENTS, BALANCE OF PAYMENTS CRISES, BALANCE SHEETS, BANK LENDING, BANKING SYSTEM, BANKING SYSTEMS, BUFFERS, BUSINESS CYCLE, BUSINESS CYCLES, CAPACITY CONSTRAINTS, CAPITAL FLOW, CAPITAL FLOWS, CAPITAL INFLOWS, CAPITAL MARKETS, CENTRAL BANK, CENTRAL BANKS, COMMODITY, COMMODITY MARKETS, COMMODITY PRICE, COMMODITY PRICES, COMPARATIVE ANALYSIS, COMPETITIVENESS, CONSENSUS FORECASTS, CONSOLIDATION, CONSUMER BASKET, CONSUMER PRICE INDEX, CONSUMERS, CONSUMPTION BASKET, CONSUMPTION BASKETS, CONSUMPTION EXPENDITURE, CORE INFLATION, CORNER SOLUTION, CORNER SOLUTIONS, CREDIBILITY, CREDIT BOOM, CURRENCY APPRECIATION, CURRENT ACCOUNT, CURRENT ACCOUNT SURPLUSES, DEBT, DEMOCRATIC INSTITUTIONS, DEPENDENT VARIABLE, DEPENDENT VARIABLES, DEPRECIATION, DEPRECIATIONS, DISTORTIONS, DISTRIBUTIONAL EFFECTS, DOMESTIC DEMAND, DOMESTIC ECONOMIC ACTIVITY, DOMESTIC INFLATION, DOMESTIC PRICES, DUTCH DISEASE, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENTS, ECONOMIC EFFICIENCY, ECONOMIC GROWTH, ECONOMIC OUTLOOK, ECONOMIC OVERHEATING, ECONOMIC SHOCKS, EMERGING ECONOMIES, EQUILIBRIUM, EQUILIBRIUM LEVEL, EXCHANGE RATE APPRECIATION, EXCHANGE RATE FLOAT, EXCHANGE RATE FLUCTUATIONS, EXCHANGE RATES, EXOGENOUS FACTORS, EXPORT DIVERSIFICATION, EXPORTERS, EXPORTS, EXTERNAL FACTORS, FINANCIAL ASSET, FINANCIAL CRISIS, FINANCIAL INSTABILITY, FINANCIAL POLICIES, FINANCIAL POLICY, FINANCIAL SECTOR, FINANCIAL SYSTEMS, FINANCIAL TRANSACTIONS, FINANCIAL VULNERABILITY, FISCAL POLICY, FLEXIBLE EXCHANGE RATES, FOOD PRICES, FORECASTS, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FOREIGN EXCHANGE MARKETS, FOREIGN RESERVES, GLOBAL ECONOMIC PROSPECTS, GLOBAL RISK, GROWTH PERFORMANCE, GROWTH PROJECTIONS, GROWTH RATE, GROWTH RATES, HIGH-INCOME COUNTRIES, HUMAN CAPITAL, IMPORTS, INCOME, INDEBTEDNESS, INFLATION, INFLATION EXPECTATIONS, INFLATION RATE, INFLATION TARGET, INFLATION TARGETING, INFLATIONARY PRESSURES, INTEREST RATE, INTEREST RATE DIFFERENTIAL, INTEREST RATE DIFFERENTIALS, INTEREST RATES, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL FINANCIAL STATISTICS, INTERNATIONAL MARKETS, INTERNATIONAL PRICES, INTERNATIONAL RESERVE, INTERNATIONAL RESERVES, JOB CREATION, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LEADING INDICATORS, LEVELS OF GROWTH, LIQUID BANKS, LIQUIDITY, LOCAL CURRENCIES, LOCAL CURRENCY, LONG-RUN EQUILIBRIUM, LOW INTEREST RATES, MACROECONOMIC POLICY, MARKET PRESSURE, MARKET PRESSURES, MIDDLE INCOME COUNTRIES, MIDDLE-INCOME COUNTRIES, MIDDLE-INCOME COUNTRY, MONETARY AUTHORITIES, MONETARY EXPANSION, MONETARY POLICY, MONETARY POLICY FRAMEWORKS, NATURAL RESOURCE, NET EXPORTS, NOMINAL EXCHANGE RATE, OIL MARKETS, OIL PRICES, OUTPUT GAP, OUTPUT GAPS, POLITICAL TURMOIL, POTENTIAL OUTPUT, POVERTY LEVELS, POVERTY REDUCTION, PRICE HIKES, PRICE INCREASES, PRICE OF OIL, PRICES RATIO, PRIVATE CONSUMPTION, PRIVATE CREDIT, PRODUCTIVITY GROWTH, PROTECTIONIST MEASURES, RATE OF RETURN, REAL APPRECIATION, REAL DEPRECIATION, REAL ECONOMIC ACTIVITY, REAL EFFECTIVE EXCHANGE RATE, REAL EXCHANGE RATE, REAL EXCHANGE RATE BEHAVIOR, REAL EXCHANGE RATES, REAL GDP, REAL INTEREST RATES, REAL INVESTMENT, RECESSION, RECESSIONS, REGRESSION ANALYSIS, RESERVE ACCUMULATION, RESERVE REQUIREMENTS, RISK AVERSION, SAVINGS, SCATTER PLOT, SIDE EFFECTS, SLOWDOWN, STANDARD DEVIATION, STOCK PRICES, SUPPLY SIDE, SUPPLY-SIDE, SURPLUSES, TAXATION, TOTAL CREDIT, TRADE LOSSES, TROUGH, UNCERTAINTY, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UPWARD PRESSURES, VOLATILE CAPITAL, WAGES, WEAK CURRENCIES, WEIGHTS, WORLD DEMAND, WORLD DEVELOPMENT INDICATORS, WORLD ECONOMY, WORLD INTEREST RATES