Revelation of Expectations in Latin America(REVELA) - Issue 58
Powell, Andrew; Sosa, Mariano
Newsletter / Journal - English - Feb, 2016
The November 2015 surveys of expectations conducted by Central Banks with inflation targeting regimes indicate that the simple average growth expectations for 2015 for the eight countries covered by REVELA have remained constant at 2.0% compared to October. Also, the GDP weighted average growth expectations have remained constant during November at the level of -0.3%. Similarly, 2015 inflation expectations have remained stable at 5.4% on the simple average basis according to November surveys, and have increased by 0.3% from 6.7% to 7.0% on the GDP weighted average basis. At the individual country level, growth expectations for 2015 fell in Brazil and Paraguay by 0.2% in both cases, remained constant in Colombia at 3.1%, Peru at 2.8% and Uruguay at 1.8%, and increased by 0.1% three countries: Chile, Guatemala and Mexico. Meanwhile, inflation expectations for 2015 increased in Colombia by 0.6%, Brazil by 0.5%, Guatemala by 0.2% and Peru by 0.1%. They remained constant in Uruguay at 9.6% and Chile at 4.6%, and fell in Paraguay by 0.7% and Mexico by 0.3%. With this results, expected growth for 2015 now ranges between –3.2% in Brazil and 3.7% in Guatemala, while expected inflation ranges between 2.4% in Mexico and 10.3% in Brazil.
Reserve Requirements and Loan Loss Provisions as Countercyclical Macroprudential Instruments: A Perspective from Latin America
Pereira da Silva, Luiz A.; Agénor, Pierre-Richard
Policy Brief - English - Feb, 2016
This paper discusses, from an analytical and operational perspective, the use of reserve requirements and loan loss provisions as countercyclical macroprudential instruments. In recent years both of these instruments have been used extensively in Latin America and elsewhere in the world. The first part of the paper sets the stage with a discussion of the rationale, in the presence of financial frictions, for using macroprudential regulation to mitigate financial system procyclicality. The second part reviews the general arguments, as well as the recent empirical evidence for Latin America, associated with the use of reserve requirements and loan loss provisions. The third part provides a normative analysis of the ways through which countercyclical reserve requirements and cyclically adjusted (or, more commonly called, dynamic) provisioning rules should be formulated, independently and jointly, to address concerns arising from procyclicality and financial volatility. Optimal countercyclical rules are discussed from the perspective of how these rules can either minimize a composite measure of economic volatility (combining measures of both macroeconomic and financial volatility) or maximize social welfare. The last part brings together the lessons for policymakers that can be drawn from the analysis.
Saving and Investment Behavior in Bolivia: Evidence from a Flow-of-Funds Analysis
Jemio, Luis Carlos; Nina, Osvaldo
Technical Notes - English - Jan, 2016
This paper analyzes sectoral saving-investment determinants in Bolivia and the role played by financial institutions in intermediating resources. For this purpose, sectoral saving-investment trends are analyzed for the last two and a half decades. Three periods are identified: i) a reform period (1990-1998), when financial credit expanded significantly; ii) a crisis period (1999-2005), characterized by a credit crunch; and iii) a boom period (2006-2012), when credit expanded at high growth rates. A flow-of-funds framework is utilized in the analysis of saving-investment behaviors of sectors and the intermediary role of the financial system. Econometric methods are used to identify the key variables that determine sectoral savings and investment. Key stylized facts are identified in connection to the adjustment rules that govern sectoral saving-investment balances. Based on the evidence, a Real-Financial Computational General Equilibrium (R-F CGE) model is calibrated in order to test the impacts of potential shocks and policies.
Related JEL Codes:
C68 - Computable General Equilibrium Models
E44 - Financial Markets and the Macroeconomy
O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
O54 - Economywide Country Studies: Latin America; Caribbean
Priorities for Productivity and Income (PPIs) Database
Izquierdo, Alejandro; Llopis, Jimena; Ruiz, Jose Juan; Muratori, Umberto
Databases - English - Jan, 2016
The Priorities for Productivity and Income(PPIs) database provides indicators used in estimations covering the period 2000-2012 (in their original version and their normalized version), as well as a richer set of more than 80 indicators across different sectors affecting productivity. Most of the historical data are available at an annual frequency for the period 2000-2012, covering 26 LAC and 32 OECD countries. Users can view country PPIs results or download data to track performance in every sector of concern.
Related JEL Codes:
O10 - Economic Development: General
O40 - Economic Growth and Aggregate Productivity: General
O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Revelation of Expectations in Latin America(REVELA) - Issue 57
Powell, Andrew; Sosa, Mariano
Newsletter / Journal - English - Dec, 2015
The October 2015 surveys of expectations conducted by Central Banks with inflation targeting regimes indicate that the simple average growth expectations for 2015 for the eight countries covered by REVELA have decreased by 0.2% from 2.2% to 2.0% compared to September. Also, the GDP weighted average growth expectations have decreased by 0.2% from -0.1% to -0.3%. Meanwhile, inflation expectations for 2015 have increased by 0.1% from 5.3% to 5.4% considering a simple average, and by 0.2% from 6.5% to 6.7% on a GDP weighted average basis. At the individual country level, growth expectations have decreased in Uruguay by 0.5%, Colombia by 0.4%, Brazil by 0.3%, Chile and Paraguay by 0.2% in both countries, and Guatemala by 0.1%. They have remained stable in Peru at 2.8% and Mexico at 2.3%. Now, growth expectations for 2015 rank from -3.0% in Brazil to 3.7% in Paraguay. Inflation expectations for 2015 have increased in Colombia by 0.9% and Brazil by 0.3%. They have remained stable in Uruguay at 9.6% and Paraguay at 4.4%, and have decreased by 0.5% in Guatemala and by 0.1% in Chile, Mexico and Peru. With these results, expected inflation for 2015 ranges between 2.5% in Guatemala and 9.8% in Brazil.