RESEARCH DEPARTMENT
RESEARCH DEPARTMENT

The IDB has researchers in many departments producing working papers on economic and social topics. Many of these documents constitute background research for the IDB’s flagship publication "Development in the Americas" prepared by the Research Department. In addition, the IDB finances and mentors studies conducted by other institutions in order to build knowledge and research capacity. All IDB working papers are peer reviewed and meet high editorial standards.

2021 LATIN AMERICAN AND CARIBBEAN MACROECONOMIC REPORT: Opportunities for Stronger and Sustainable Postpandemic Growth

Coordinated by Eduardo Cavallo and Andrew Powell

  • Latin America and the Caribbean was hard hit by COVID-19. The 7.4% loss of GDP was the largest on record in a single year, 26 million jobs were lost and (extreme and moderate) poverty is expected to rise by about 5 percentage points of the population. Growth in 2021 could be as low as 0.8% if vaccine roll-out is delayed or mutations prove to be vaccine resistant. But in a positive scenario of higher world growth, the region could grow as much as 5.2%. In a central scenario growth would be around 4.1%.

  • The average fiscal package to address the crisis was 8.5% of GDP and deficits increased by an average of 5.3% of GDP in 2020. Public debt increased from 58% of GDP in 2019 to 72% in 2020 and could continue to rise to 76% by 2023. However, the trajectory is highly dependent on growth and fiscal policy.

  • Governments should take action to ensure fiscal, monetary, and financial sustainability. They should also implement a set of urgent reforms to improve fiscal outcomes and boost growth by assisting viable firms, helping workers find formal jobs in the face of reallocation, improving connectivity, implementing a plan towards faster digitalization, and investing in sustainable infrastructure. These measures will help boost productivity, spur growth, and achieve ambitious climate goals.

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DIA 2020: From Structures to Services

Edited by Eduardo Cavallo, Andrew Powell and Tomás Serebrisky

  • To close its infrastructure gap, Latin America and the Caribbean needs more than investment in hard assets. It needs simultaneous and decisive policy action to improve efficiency of the infrastructure investment process and regulation of services—what we refer to as software.

  • Our study provides an in-depth diagnostic of access, quality, and affordability of infrastructure services in the region as well as examples of regulatory policies that have achieved tangible progress in service provision.

  • Digitalization will disrupt the provision of infrastructure services and increase efficiencies. Our study develops scenarios of market organization for the energy, transport and water and sanitation sectors based on the extent of adoption of digital technologies.

  • For the promise to become a reality a supportive regulatory framework is needed to improve infrastructure in sustainable ways through adaptation, mitigation and the use of natural infrastructure. Our book explores the public policies needed to achieve this.

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LATEST BLOG POSTS

FINLAC: A New Initiative on Financial Inclusion to Boost Economic Recovery and Transform Lives
FINLAC: A New Initiative on Financial Inclusion to Boost Economic Recovery and Transform Lives

The COVID-19 pandemic has battered Latin America and the Caribbean economies. Due to its large informal sectors, weak health systems, and fiscal restrictions, the region’s economy has been hit harder than any other declining by 7% last year—the largest GDP contraction since 1821. But unlike previous crises, where problems originated or were exacerbated in the […]

The post FINLAC: A New Initiative on Financial Inclusion to Boost Economic Recovery and Transform Lives appeared first on Ideas Matter.

Inflation and Its Impact on the Poor in the Era of COVID-19
Inflation and Its Impact on the Poor in the Era of COVID-19

Inflation has become a growing concern for central banks in Latin America and the Caribbean. The recovery in economic activity was stronger than expected in the first months of 2021, reflecting the stimulus that governments deployed to mitigate the effects of the pandemic and higher mobility and lower containment measures. However, inflation and inflation expectations […]

The post Inflation and Its Impact on the Poor in the Era of COVID-19 appeared first on Ideas Matter.

Testing the Impact of Social Media on Trust
Testing the Impact of Social Media on Trust

Trust and a sense of citizenship are the pillars of thriving democracies. They are essential to the willingness of citizens to make individual sacrifices in pursuit of collective endeavors that drive a society’s success. Unfortunately, that trust and sense of citizenship have been at historical lows worldwide recently and have been declining even more rapidly […]

The post Testing the Impact of Social Media on Trust appeared first on Ideas Matter.

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