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

How Perceptions of Inequality Affect Trust in Latin America and the Caribbean
How Perceptions of Inequality Affect Trust in Latin America and the Caribbean

Lack of trust between individuals and between individuals and institutions is a chronic problem in Latin America and Caribbean and often linked to inequality. After all, in a region that ranks among the most unequal in the world, it is natural to distrust political elites who seem to coopt government and ensure that policies favor […]

The post How Perceptions of Inequality Affect Trust in Latin America and the Caribbean appeared first on Ideas Matter.

Boosting Trade in a Postpandemic World
Boosting Trade in a Postpandemic World

Global value chains (GVCs) are essential to modern trade. Given the separation of production into several stages, carried out in different countries, GVCs allow nations to increase productivity through specialization. Yet Latin America and the Caribbean’s participation in GVCs remains low (18%) compared to Asia (28%) and Europe (34%). The paradox of the COVID-19 crisis, […]

The post Boosting Trade in a Postpandemic World appeared first on Ideas Matter.

How Climate Change Worsens Poverty and Inequality
How Climate Change Worsens Poverty and Inequality

Over the coming decades, climate change and natural disasters have the potential to undo much of the progress made in lifting households out of poverty over prior decades. By one estimate, climate change could push 100 million people across the globe into poverty within the next 10 years. By the end of the century, the ratio of GDP per capita between […]

The post How Climate Change Worsens Poverty and Inequality appeared first on Ideas Matter.

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