Current Account Surplus in Latin America: Recipe Against Capital Market Crises?

Volatility has sharply declined in Emerging Markets (EM) since the nerve-wracking heights of August 1998, when it reached a staggering 300 basis points (measured by EMBI’s intra-month standard deviation). Recent market volatility in the US sub-prime mortgage market and the April-May 2006 shakeup brought memories of 1998, when the Russian default sent the risk premium […]

Full “BRIC-hood” At Last?: The Currency Appreciation in Brazil

Many in and outside of Brazil have questioned the customary inclusion of Brazil among the more dynamic emerging markets commonly referred to as BRICs.  After all, the economy’s overall growth performance for decades has paled in comparison to its more glamorous counterpart nations.  Signs are emerging, however, that Brazil could over the next few years […]

Keeping Track of Informality

The Brazilian government is expected to propose two different measures in the coming weeks that are symptomatic of the difficulties in doing business in Brazil. The first is legislation to be submitted to congress this week to substitute a previous presidential veto to the so called “Amendment 3”: legislation that would have restricted the authority […]

Global imbalances and the Brazilian Real: What Comes Next?

These days the main subject of discussion in the Brazilian economic newspapers is the “unsolvable problem” of the appreciation of the Brazilian real against the U.S. dollar. We are currently experiencing a conjunction of important economic factors affecting Brazil’s exchange rate market. All of them are related to each other although they have different channels […]

Benedictine Economics

Over the weekend in Brazil, Pope Benedict offered a stern warning to drug traffickers: “God will call upon you to account for your acts… Human dignity cannot be trampled in this way.” These sorts of statements seemed to characterize the Pope’s recent visit to Brazil: a complex and layered interplay between ethics, morality, the Church […]

Recent Economic Success of Latin America: Good Luck or Good Policies?

Since 2004 Latin America’s economic performance has been much better than in the previous decade of financial crises that hit Mexico, Brazil, Argentina, Ecuador, Uruguay, Dominican Republic, etc. Growth has recovered and inflation has been low. How much of this success is due to good policies as opposed to good luck? Certainly economic policies have […]

BRAZIL – Central Bank Intervention: Facts and Ideas

I thought it would be an interesting issue if we could open a discussion about the current Brazilian Central Bank’s (BCB) FX and monetary policy. The idea is basically to point out the main facts surrounding the CB policy trying to highlight some of the long term impacts of those policies, and study the possibility […]

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