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The year 2019 was the year anger over social issues took to the streets in Latin America and the Caribbean. Poverty and inequality in the region had fallen following the commodity boom of the 2000s, but more recent years of low growth brought that progress to a standstill. Mass frustration erupted. Amidst high youth unemployment […]
The unprecedented conditions created by the spread of the coronavirus call for exceptional policy responses from the regional monetary authorities. Besides traditional tools such as interest rate reductions, central banks have been pursuing unconventional measures to avoid permanent consequences from a transitory, but potentially severe, negative shock. Since the 2008 global financial crisis, central banks […]
The post What Can Central Banks Do to Mitigate the Effects of the Coronavirus? appeared first on Ideas Matter.
The novel coronavirus and the disease it causes, Covid-19, have imposed severe human and economic costs around the world. Cases are growing in Latin America and the Caribbean and if there is one lesson from other countries it is that early action to stop the spread of the virus is key. A recent analysis suggests […]
The post Policies and Projections for Latin America and the Caribbean in the Time of Covid-19 appeared first on Ideas Matter.
By Alan Finkelstein Shapiro and Victoria Nuguer Registering a business in Latin America is not for the faint of heart. Multiple procedures — ranging from establishing by-laws and a legal structure to registering the company with authorities — have to be carried out. Labyrinthine bureaucracies have to be negotiated. Lawyers and accountants are often hired to avoid […]
The post When Lower Barriers to Firm Creation Translate Into More Resilient Economies appeared first on Ideas Matter.
As the chair of the United States Federal Reserve from 2006-2014, Ben Bernanke liked to say that monetary policy is 98% talk and only two percent action. In other words, what the central bank says is hugely important. It can affect households, firms, and market expectations, and, in turn, impact the economy. That message could not […]
Before the financial crisis of 2008, most governments lacked an institutional framework for handling financial policy. Central banks focused on monetary policy. They mostly used interest rates to influence inflation and output, believing such a focus could guarantee economic stability. But when it came to financial policy they were inclined to trust the invisible hand […]
Firms in the developed world rely heavily on bank credit. But firms in developing countries, and particularly those in Latin America, rely much more heavily on trade credit–i.e. credit from their suppliers –and that has immense implications for pricing decisions and inflation. Most studies that have looked at inflation in emerging economies have examined the […]
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 […]
The post Reducing Volatility from Cross-Border Banking Flows appeared first on Ideas Matter.
They have risen bit by bit. But since the financial crisis in 2008, the Fed has kept interest rates in the United States exceedingly low. Now with healthier economic growth and employment in the United States, that may be changing, and Latin American countries need to be on their guard. Latin America’s major economies have […]
The post Dealing with Corporate Debt and Rising Interest Rates appeared first on Ideas Matter.