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Category Archive: Latin America
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Saving Latin America’s Unprecedented Income Windfall
Commodity exporting countries in Latin America have benefited strongly from the commodity price boom that began around 2002. And the accompanying improvements in public and external balance sheets have fed a sense that this time the macroeconomic response to the terms-of-trade boom has been different (and more prudent) than in past episodes. But, has it? [...]
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After a Golden Decade, Can Latin America Keep Its Luster?
Latin America continues to be one of the fastest growing regions in the world, even though growth slowed down a bit in 2012. Many economies in the region are operating at or near potential, inflation remains generally low, and unemployment is at historically low levels. In the near term, the region will continue to benefit [...]
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Brazil: It’s Time to Raise the Selic Rate
The basic interest rate in Brazil, the Selic rate, has proven itself effective in controlling inflation, and the Central Bank should raise it soon. The first COPOM (the Brazilian monetary policy committee) meeting under a PT’s (Workers’ Party) administration, back in January 2003, raised the Selic rate by 50bps, from 25% to 25.5%. In the [...]
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What Has Changed in Emerging Markets?
(from my colleague Ilan Solot ) 1) The Bank of Korea is becoming more independent 2) We expect the Brazilian Central Bank to start hiking by 25 bp in May 3) Israel intervened to weaken the shekel for the first time since July 2011 4) Chile is stepping up its FX intervention rhetoric 5) Mexico suspends [...]
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Argentina and the Presentation to the Second Circuit US Court of Appeals
Argentina’s debt crisis of 2001/2002 was a profound and painful one. The 2005 restructuring proposal reflected the difficulties suffered by the country (see my blog http://www.economonitor.com/blog/2008/09/some-reflections-on-argentinas-debt-restructuring/). The acceptance reached about 74%, therefore there was still a substantial percentage of holdouts. Sometime in 2006 or 2007, and for reasons that still escape me, people from an [...]
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Peña Nieto’s Public Security Mirage and The Perils of Diversion
One of the key failures of President Calderon’s efforts against organized crime was the lack of an effective communications strategy. Calderon embarked on a highly complex “war” against organized crime but consistently failed to inform Mexican citizens of the justifications for fighting. When a country goes to war, the government needs to continuously keep the [...]
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Brazil’s Imprudence and Bad Economics
Brazil gave up structural microeconomic reforms and is progressively letting the macroeconomic policy deteriorate, thereby jeopardizing economic growth. The Workers’ Party (PT) has governed Brazil for one decade. Such political continuity has not been reproduced in economic policy. During the crisis of 2002, in order to warrant minimal governability conditions, President Lula was forced to [...]
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Gender Equality Pays Off in Brazil
Brazil’s success in reducing poverty and income inequality has been widely reported in recent years. What is less known is that there has also been progress in lessening gender inequality in the past two decades. Illiteracy rates for women 15 years old and above came down from 20.3 percent in 1991 to 9.8 percent in [...]
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Telecom Reform in Mexico: Current State and Issues to Address
Legislators from the three major parties—PRI, PAN and PRD—are working on the final details of a telecommunications reform bill that will be introduced as early as next week in the Lower House. The bill is poised to be the central legislative issue of the spring congressional session. Given the large vested interests at stake, legislators [...]
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Monetary Policy, BRICs and Why Gauging Investors’ Market Forecasts Is Futile, But Fun
Gauging the opinions of investors can be an appealing, if ineffectual practice. Posing straightforward questions to consumers about how they find current employment opportunities or asking manufacturing firms about supplier deliveries can provide a reasonable guide to economic conditions. But surveying groups of investors for their market forecasts will typically result in answers that are [...]
