Grexit
|
Eduardo Lora La salida de Grecia de la zona del euro producirá una recesión en América Latina. Que Grecia abandone el euro (Grexit) ya no es una hipótesis remota: el electorado griego ha rechazado a los partidos políticos que apoyan las medidas de austeridad exigidas por los acreedores. El gobierno que se formará después de las elecciones del 17 de junio difícilmente estará dispuesto a cumplir con esas exigencias. En consecuencia, se verá forzado a una moratoria de pagos y a introducir de nuevo el dracma para poder financiar con emisión el déficit fiscal. La moratoria y la inevitable quiebra del sistema bancario griego generarán pérdidas de capital en la banca europea y americana. La incertidumbre financiera global producirá huidas masivas de fondos hacia los pocos títulos de gobierno considerados seguros. La sequía de créditos y el pesimismo sobre lo que pueda ocurrir en Portugal, España e Italia llevarán a una recesión profunda en Europa y detendrán la recuperación en Estados Unidos. The Product Space and the Middle Income Trap: Comparing Asian and Latin American ExperiencesAnna Jankowska, Arne J. Nagengast, José Ramón Perea Strong economic growth in the emerging world is bringing new economic challenges to the forefront particularly for those countries that have recently reached middle income status. More than a decade of robust and sustained economic growth in emerging economies is contributing to a trend of increasing convergence in per capita income with high income countries and the shift of the economic centre of gravity towards the south and east. These trends also bring new economic challenges to the forefront particularly for countries entering the middle zone of the per capita income distribution. La nueva oleada de nacionalizacionesEduardo Lora Detrás de las nacionalizaciones hay mucho más que ideología izquierdista. Brasil, Colombia y Perú deberían estar alerta La renacionalización de la petrolera argentina, YPF, es el más reciente episodio de la nueva oleada de nacionalizaciones que está extendiéndose por América Latina desde hace más de una década. En Venezuela, además del sector petrolero, se han nacionalizado desde empresas del sector eléctrico y las telecomunicaciones, hasta cadenas de distribución de bienes de consumo. En Bolivia, las primeras decisiones que tomó Evo Morales al asumir el poder en 2006 incluyeron nacionalizar las industrias petrolera y del gas y expulsar a la empresa privada que había manejado la red de acueductos de La Paz. Hace unos años también Ecuador nacionalizó algunas empresas petroleras y medios de comunicación. Peligros de las Entradas de CapitalesEduardo Lora Las entradas masivas de capitales suelen terminar en recesiones o en crisis bancarias. El remedio no consiste en bloquear los movimientos de capitales ni en proteger la industria, sino en reforzar la regulación bancaria. El peso colombiano se ha apreciado 7% desde hace un año. Chile se ha visto forzado a continuar comprando divisas. Brasil está interviniendo masivamente en el mercado cambiario para evitar el fortalecimiento del real y ha anunciado medidas proteccionistas para evitar la desindustrialización. Como van las cosas, toda América Latina terminará este año con 50.000 millones de dólares más de reservas internacionales debido a que las entradas de capitales llegarán a 257.000 millones de dólares, según el Institute for International Finance. The World of Forking PathsAndrew Powell Projections for 2012 world growth have been declining, as prospects for Europe have deteriorated and the Chinese economy has started to slow. While the recent package announced for Greece is very good news and staved off a disorderly default, the experience in Latin America demonstrates that there is a long road ahead for Greece and also for other European periphery countries suffering from debt-competitiveness-banking sector problems. Generating higher growth through reforms and without employing the exchange rate to gain greater external competitiveness is likely to provoke political difficulties and much debate, noise and market volatility along the route to a solution. Recent figures for Brazil indicate that these global developments are already affecting Latin America and the Caribbean (LAC). Los Impuestos a las Ganancias y el Desempleo ProfesionalEduardo Lora El mayor desperdicio de recursos y de esfuerzos es el capital humano desaprovechado. Aunque mejorar los niveles de educación es esencial para elevar la productividad y los ingresos, este potencial solo se hace realidad si la gente más educada puede conseguir empleos en empresas que aprovechen sus talentos y conocimientos. Las altas tasas de desempleo y de informalidad de los jóvenes con educación universitaria son un indicio doloroso del mal uso del capital humano. ¿Se necesitan más empresarios?Eduardo Lora La iniciativa empresarial es la sangre del capitalismo y la principal fuente de progreso económico en las economías de mercado. Parece obvio, por consiguiente, que los gobiernos busquen estimular la creación de nuevas empresas y apoyar a los pequeños empresarios. Pero en América Latina hay más emprendedores de la cuenta. Si se define como emprendedor a todo aquel que se gana la vida con su propio negocio, en lugar de depender de un salario, entre una tercera parte y la mitad de la fuerza de trabajo (según el país) son emprendedores. En cambio, en Estados Unidos, menos del 10% de la fuerza de trabajo cabría en esta definición de emprendedor. The Process of Reform in Latin AmericaJeff Dayton-Johnson, Monterey Institute of International Studies Most discussion of how to improve economic performance in developing countries focuses on what public policies should be changed. But it is equally important to study how these reforms are to be implemented. This is the dilemma of the process of reform. Research related to reforms in Latin America and the Caribbean tends to look at one of two aspects of this dilemma. Some authors explore political-economy aspects, i.e. the impact of the social and economic context on the approval of reforms. Others look at the policymaking process that leads to reforms, i.e. the behavior and role of actors and institutions and their impact on the policy outcome. A recent paper combines these approaches, simultaneously incorporating the context and the interactions between agents and institutions during the different stages of reform. LAC's Growth Prospects: Made in China?Augusto de la Torre and Tatiana Didier The last ten years or so have been very good for many countries in Latin America and the Caribbean (LAC). They have witnessed the consolidation of a stable and resilient macro-financial framework, relatively high growth rates, and steps forward in the equity agenda. This new face of LAC was perhaps most clearly portrayed by a rather robust performance of the region, especially of South American countries, in the context of the recent global crisis. In effect, compared to the middle-income country average, the region’s recession in 2009 was relatively shorter lived and, with the notable exception of Mexico, remarkably mild and its recovery in 2010-2011 stronger. International Harmonization of Standards: A catalyst for developed countries and a barrier for developing countries?José-Daniel Reyes On February 7, 1904, a blaze erupted in Baltimore and fire fighters from neighboring Washington DC came to help extinguish the flames only to discover their hoses would not fit Baltimore’s fire hydrants. This is a classic example of how disruptive the heterogeneity of product standards can be for the normal functioning of societies. The following year, national standards for fire hoses were adopted. Harmonization of product standards is crucial to ensure a smooth dynamism in economic activity, and it is equally important when it comes to international trade. Nowadays, when regional economies become integrated through trade, the differences of product standards across countries or economic regions have far-reaching implications. As it turns out, this is especially true for exporting firms from the developing world (Chen et al. 2006 and Czubala et al. 2007). Are public infrastructure investment and fiscal sustainability in Latin America incompatible?Luis Carranza, Universidad San Martin de Porres, Lima, Peru Low and volatile public infrastructure investment is one of the most frequently-cited causes of slow output growth in many Latin American countries. Better roads, ports and railroads reduce transportation costs and increase the competitiveness of domestic firms. A stable and cost-effective provision of energy and telecommunications services also expands the production possibilities of firms. Furthermore, broad access to infrastructure services, from water and sanitation to transport infrastructure and telecommunications, also plays a key role in reducing income inequality and poverty. Latin America exhibits significant infrastructure gaps, due to decades of low public investment. High financing costs due to weak fiscal sustainability, together with fragile institutions, have contributed significantly to this scenario. Can Sterilized Foreign Exchange Purchases Be Expansionary?Márcio G. P. Garcia In a recent discussion paper, I argue that contrary to conventional economic thinking, the purchase of foreign exchange (FX) by the Brazilian Central Bank through sterilized interventions have been having an expansionary impact on Brazil’s aggregate demand and inflation levels. It is important to reconsider the current massive sterilized interventions not only because they constitute an expensive and inefficient way of tackling currency appreciation, but also because they make it more difficult to reach Brazil’s inflation target, thereby requiring an even more restrictive monetary policy. Minimum Wages and Earnings Inequality in Urban MexicoMariano Bosch and Marco Manacorda Between the late 1980s and the mid 1990s, earnings inequality in Mexico increased markedly. In this piece we argue that one major force behind the observed trend in earnings inequality is the deterioration in the real minimum wage. More Inflation or More RevaluationEduardo Lora and Andrew Powell In January of this year, international food prices surpassed the mid-2008 peak with similar consequences: popular revolts in undemocratic countries, and many speeches but few concrete actions in developed countries. In Latin America it was the usual dilemma: more inflation or more revaluation. From the Lost Decade to the Lost Reform: Labor Markets in Latin America and the CaribbeanPablo Egaña and Alejandro Micco After the debt crises in the 1980s many countries made deep pro-market reforms in LAC, yet few and timid reforms were done in the labor market. Even though per capita GDP growth in Latin America was extremely low during the 1980s (an average annual rate of -0.9 percent) compared to OECD countries (where the annual rate was around 2 percent), LAC employment grew by a healthy 29 percent during the whole period (WDI 2009). The high level of inflation and informality seemed to “grease” labor markets and therefore limitations in these markets did not seem to be an obstacle to reap the benefits of other structural reforms, like trade liberalization. At the time it was not seen as necessary to spend scarce political capital on labor market reforms. Displaced Workers and Unemployment Insurance in Mexico: Preparing for the Next CrisisDavid S. Kaplan and Raymond Robertson The recent global economic crisis highlighted the fact that Mexico does not have a safety net that is sufficient for dealing with transitory but serious shocks to employment. We believe that a system of unemployment insurance should be a priority for the country. We hope that in the near future, before the memory of the 2008 crisis fades, policymakers will consider adopting such a system. We especially hope that an unemployment insurance system is in place when the next crisis occurs. The Political Economy of ProductivityEduardo Lora Since productivity consists of producing more with the same resources, it should be a desirable goal for any society. In practice, however, political systems and governments do many things that work against this goal. As an IDB study concludes, Latin American countries are falling behind with respect to the levels of per capita income in developed countries. The main reason is the poor use of their productive resources—not lack of investment. Policies that reward inefficiency, discourage competition and innovation, or divert resources to rent-seeking or unproductive activities are, unfortunately, all too common. How Rich Countries Became Rich and Why Poor Countries Remain Poor: The Role of Sophisticated and Well-Connected ProductsJesus Felipe, Utsav Kumar, and Arnelyn Abdon In a new paper, Felipe et al. (2010) provide empirical support for the idea that countries that are unable to upgrade and diversify their exports may end up being caught in a middle-income trap. They classify 779 products according to their sophistication and connectivity to other products and use this information to categorize countries. They find that 120 out of 154 countries are in a “bad product” trap, as they mostly export unsophisticated and unconnected products. They conclude that escaping this trap will require policy interventions aimed at addressing the market failures that are pervasive in many developing countries. Private Investment Returns to Infrastructure SectorsEduardo Lora The infrastructure sectors in Latin America and the Caribbean have undergone very profound changes since the 1990s when various public services were opened up to private sector participation. Now, countries like Brazil, Chile and Peru are turning to private capital to finance major projects in electricity, highways and airports. The trend could spread to other countries. Sugar prices, Labor Income and Poverty in BrazilEkaterina Krivonos and Marcelo Olarreaga Sugar is produced in 121 countries in the world. It remains one of the most distorted sectors of the world economy, and only in a handful of countries producers face world prices. The elimination of OECD’s protectionist policies in this sector could bring large benefits to many developing countries which have a natural comparative advantage in the production of sugar. Bipolar Debt Restructuring: Lessons from LACAndrew Powell Given Europe’s debt problems, questions on how to restructure sovereign debts and whether the world needs a rule-based sovereign debt restructuring mechanism have once again come to the fore. The Latin America and Caribbean region has an unenviable history of debt restructurings. There have been over 25 restructurings in the last 35 years and nine since 2002. The most important lesson Latin America and the Caribbean can teach Europe during these hard times is that: the old continent needs a debt restructuring mechanism. Bank Lending Channel in BrazilChristiano A Coelho (Banco Central do Brasil) In a recent paper, we contribute to the empirical understanding of the bank lending channel. In contrast with existing literature, we find that, in Brazil, larger banks react more strongly to monetary policy than smaller banks. Responses are similar among foreign- and domestic-owned banks and private versus government-owned banks. Decomposing the impact of monetary policy according to bank size is interesting for two reasons. First, it is an important policy question per se, in light of recent structural changes in the banking market. In particular, mergers in Brazil and other countries have produced larger banks. This suggests that monetary policy should become more powerful. Social Protection in Latin America: the Unfinished RevolutionFrancisco H. G. Ferreira and David Robalino During the recent financial crisis, various Latin American governments announced temporary expansions of existing safety net programs, such as Brazil’s Bolsa Família or Mexico’s Programa de Empleo Temporal. Though the final numbers are not yet available, it has often been claimed that such interventions helped protect the poor from the worst effects of the recession. Rejection of Neoliberalism: Rationality or IdeologyEduardo Lora Major economic reforms are a thing of the past. Regardless of political orientation, in the 1990s all the Latin American presidents who left a mark on the economic leadership of their countries undertook "neoliberal" measures. Presidents as right-wing as Fujimori in Peru or as left-wing as Fernando Henrique Cardoso in Brazil lifted import barriers, privatized large state enterprises and liberalized the financial sector. Although there may still be room to continue privatizing and liberalizing, neoliberal reforms have stalled and the economic orientation of governments has shifted in the opposite direction, especially in Argentina, Bolivia, Ecuador and Venezuela. The Economic Toll in Haiti, and Its ImplicationsEduardo Cavallo and Andy Powell The heart-rending images of the catastrophic earthquake that hit Haiti in January 2010 failed to convey the extent of death and destruction brought to the capital Port au Prince and surrounding areas. Estimates of the loss of life indicate that the earthquake killed between 200,000 and 250,000 people. The latter figure exceeds that of any natural disaster worldwide in recent decades, including the Indian Ocean tsunami of 2004. But Haiti is a small country, with fewer than 10 million inhabitants. The quake thus killed between 2% and 3% of the entire population—a staggering blow to any nation. Indeed, no natural disaster in recent history has claimed the lives of such a share of a single country’s population. And Haiti, even before this tragedy, was already the poorest country in the Western Hemisphere. The Development Impact of the War on DrugsPhilip Keefer, Norman V. Loayza, Rodrigo R. Soares Drug traffickers now openly advertise for hit men on the streets of Nuevo Laredo, Mexico. Growing populations of drug addicts have overwhelmed drug transit countries from Guinea Bissau to the Kyrgyz Republic. From Latin America to Central Asia, the struggle for rents from illicit drug markets has shaken political institutions. These unexpected effects of efforts to limit the pernicious effects of narcotic drugs by proscribing their trade and consumption should prompt renewed discussion of policies towards drugs. Targeting Public Utility Services in LAC: Some Lessons from ColombiaCarlos Medina and Leonardo Morales Promoting access to public utility services is a common goal of the public sector of most developing countries, but those governments unable to guarantee these services to their population bear very high social costs due to the negative externalities linked to their shortage. In order to promote these policies, most Latin American countries provide supply or demand subsidies under schemes designed to balance their own technical and political economy constraints, usually distorted by inconvenient initial conditions. Investment Banks' Behavior and Sovereign Debt CrisesSebastián Nieto-Parra While there is much research analyzing how emerging market economies access the international bond market, studies of the formation of prices in the emerging sovereign bond market are rare and tend to focus on the incidence of the pricing of certain covenants, such as collective action clauses. This stands in contrast to the massive literature on the determinants of underwriting fees in the primary corporate market of developed countries. Campaign Advertising and Electoral Outcomes: The Brazilian ExperimentJoão M P De Mello Do campaign expenditures and advertising affect elections outcomes? Surprisingly, political scientists and economists alike have had trouble answering this seemingly obvious question in the affirmative. The existing empirical research that uses non-experimental data suffers from identification issues, and often finds an intriguing “minimal effects” result. Examples of studies that detect a small impact of money and advertising abound, the most well-known among economists being Levitt (1994). If money and advertising are irrelevant, how can we rationalize the large sums of money spent on political campaigns in general, and on TV advertising in particular? From a policy perspective, if money has no impact on elections, a large debate on public campaign finance is misplaced. Are Capital Controls Effective?Eduardo Levy-Yeyati The global crisis has reignited debate on the desirability of capital controls. This column examines evidence from Argentina and Chile and argues that capital controls can be effective, but that their effectiveness and efficiency varies. It adds that controls need to be considered as part of a macro-prudential toolkit to prevent asset inflation and overvaluation that is costly to revert in the down cycle. Worrisome SignsMárcio G. P. Garcia There are serious doubts regarding the Brazilian government’s ability to reverse the expansionary fiscal policy that characterized the final two years of the Lula administration. It is always difficult to prevent an increase in public spending, but this task becomes even more challenging if decisions are taken by almost the exact same policy team that did the opposite during the previous government. However, the Minister of Finance’s first declarations were positive, pointing out the need to reverse the excessive fiscal expansion of the previous two years. Was the Worldwide Use of Wholesale Funds Important for the International Transmission of the US Subprime Crisis?Claudio E. Raddatz The magnitude and reach of the recent financial crisis, several orders of magnitude larger than the size of the initial shock to the US subprime sector, has led many to wonder how a shock to a seemingly small segment of the US financial market managed to propagate so much, so fast. Although a real channel through trade linkages with the US has undoubtedly played a role in the international transmission of the crisis (Levchenko et al. 2009), the timing of some of the events strongly suggests that the first line of action took place through international financial linkages. For instance, the bank run on Northern Rock took place in September 2007, only one month after the beginning of the crisis in the US and when the US economy had not started to shrink yet. A New Teaching Force: Improving Education Quality in Latin America and the CaribbeanAna Santiago The capacity of countries for competing in a global economy critically depends on their capacity of meeting increasing demands for high-level-skills, making school quality and pertinence a pressing issue. Despite increased spending in education and many reform efforts, Latin America has not substantially improved learning in its schools over the past decade: scoring at the bottom of every global test of international student achievement. Progress has been made in education access, achieving almost universal primary education, expanding preprimary, secondary and tertiary education. However, regional and national inequalities continue to hinder LAC educational achievement, raising concerns about equity in the distribution of learning opportunities. The Costs of Sovereign Default: Theory and RealityEduardo Borensztein and Ugo Panizza For the last 50 years sovereign defaults only concerned developing and emerging countries. The recent predicaments of Greece have raised the specter of a default in a high-income OECD country belonging to the Euro Area. What would be the outcome of such an event? The Emerging Evidence on Teachers’ Incentive ProgramsFelipe Barrera-Osorio In a recent trip to Pakistan, I visited several types of schools. As in other parts of the word, there were striking differences in quality between and within public and private schools. Some public schools prepare the most skilled individuals in the country, others provide low quality education, and the same goes for private schools. Redemption or Abstinence?Ricardo Hausmann and Ugo Panizza The emerging market crises of the 1990s focused the attention of economists on issues of debt composition and particularly currency denomination (Krugman, 1999). A debate emerged in the late 1990s and early years of the past decade regarding the causes of the prevalence of foreign currency foreign debt in emerging markets. Some saw it as a consequence of moral hazard. Declining Inequality in Latin America: Market Forces, Enlightened States or the New Left?Nora Lustig Income inequality declined throughout Latin America (LA) in the past decade while it has been growing in China, India and South Africa. Given that LA is the most unequal region in the world and that during the 1980s and 1990s inequality increased, this is great news. Welfare Programs and Property CrimeMaria Laura Alzua Crime is a major concern in many Latin American countries. While literature is still scarce in the region, there is a growing body of evidence documenting several aspects linked to crime reduction, mostly related to the deterrence effect of the probability of apprehension and the harshness of punishment. This column discusses one road less explored in reducing crime, by looking at the effect of welfare programs on property crime. Using evidence for Argentina we find that the introduction of a welfare program reduces property crime. These results are relevant in two dimensions, first, in terms of crime reduction itself, and, secondly, in terms of policy implications for social programs. MercosulAlbert Fishlow In the midst of a declining US dollar and another Fed quantitative expansion -$600 billion by mid-2011- as well as elections in Venezuela and Brazil, there has been relatively little attention in the hemisphere to what has been emerging as a perennial problem: sustained Brazilian surpluses in its bilateral trade with Argentina.Trade between the two countries did not dip as sharply as overall decline in 2009, although the Brazilian surplus did go down, and the brisk recovery in growth of both countries in 2010 has contributed to a resurgence in bilateral exchange. Foreign Minister Amorim predicted in September that Argentina would wind up as Brazil’s second largest trading partner this year, replacing the United States. Currency Wars and Collateral Damage: The G-20 Faces Its Litmus TestMauricio Cárdenas and Eduardo Levy-Yeyati Framing the Issue Long gone are the days when the G-20 proved an essential forum to facilitate a pragmatic and consensual approach to dealing with the global economic crisis. International coordination, which was remarkable when almost everyone was in the downdraft, now seems distant and elusive. Reconciling divergent recovery paths and national interests appears formidably difficult. Controls on Cyclical Capital InflowsGuillermo Calvo Capital is flowing back to Emerging Market economies, EMs. This is reason to celebrate but, as previous capital‐inflow episodes should alert us, complacency on the part of policymakers could be a costly mistake. A recent Fund Staff Position Note (Ostry et al (2010)) shares that view, and has startled many observers by breaking with tradition and giving its blessing to controls on capital inflows in some, admittedly extreme, circumstances. When the Fund talks, people listen!1 Thus, the Fund paper has started a lively debate on the issue, which is both timely and useful.
|
|
Editors
Eduardo Lora, Editor
Inter-American Development Bank
Nora Lustig, Co-Editor
Tulane University (USA)
Ugo Panizza, Co-Editor
UNCTAD and HEID (Switzerland)
Máximo Rossi, Co-Editor
Universidad de la República (Uruguay)
User login
Founding Contributors
Maria Laura Alzua
Richard Baldwin
Felipe Barrera
Francois Bourguignon
Guillermo Calvo
Eduardo Cavallo
Mauricio Cárdenas
Gerry della Paolera
Augusto de la Torre
Sebastián Edwards
Francisco Ferreira
Albert Fishlow
Ricardo Hausmann
James J. Heckman
Eduardo Levy-Yeyati
Santiago Levy
Eduardo Lora
Nora Lustig
Andres Neumeyer
Ugo Panizza
Claudio Raddatz
Roberto Rigobón
Máximo Rossi
Ana Santiago
Mariano Tommasi
Andrés Velasco
LACEA Officers
President
Roberto Rigobón
Vice-president
Supported by:
GDNet Knowledge Sharing & Research Communications Capacity Building Program
Users Menu
Editors Corner
Like us on Facebook and follow us on Twitter
Guardians of Finance: Making Regulators Work for Us
On March 8th, Jerry Caprio presented at the IDB headquarters in Washington, DC, his latest book "Guardians of Finance: Making Regulators Work for Us”. Jerry and his coauthors, James Barth and Ross Levine, “argue that the financial meltdown of 2007 to 2009 was no accident; it was negligent homicide. They show that senior regulatory officials around the world knew or should have known that their policies were destabilizing the global financial system, had years to process the evidence that risks were rising, had the authority to change their policies--and yet chose not to act until the crisis had fully emerged”. Click here to download this interesting presentation.
United Nations Development Program
Environmental risks threaten Latin American, Caribbean gains in cutting poverty and inequality, says Human Development Report
The 2011 Human Development Report—titled Sustainability and Equity: A Better Future for All—warns that rapid deforestation and other environmental dangers could sideline regional achievements and hamper advancements in the reduction of income income inequalities. The Report calls for bold action within and across nations to address climate challenges such as rising sea levels that will have profound impacts on Caribbean islands and mainland coastal areas. Despite the environmental challenges, the Report notes that there is progress in natural resource conservation, and in some countries, including Brazil, communities are taking initiatives to reduce pollution, improve urban living and boost public transportation.
Debates/Forum
Read our help page on how to Join a Debate
How to Facilitate the Intake of Policy Relevant Research by Policymakers?
GDNet – Latin American Window
Moderator: Jorge Barriga, (LAC) Regional Window Coordinator
Join this debate
The need for evidence-based policies is a major challenge facing developing nations. Transitional societies can benefit substantially by fostering research capacity building and bridging the gap between quality research and public policies.
1. In practice, what are the main facilitators and barriers of the research-to-policymaking transfer?
2. Is it desirable to implement mechanisms to align the academic research agenda to policymaking needs? Could this approach promote closer contact between academia and policymakers?
3. What concrete actions can be taken by an international NGO such as GDN to promote the intake of academic research by policy makers?
The Role of Capital Controls
Moderator: Ugo Panizza
Join this debate
Boom and bust cycles of capital flows to emerging market countries have been a permanent feature of the international monetary system since the early era of financial globalization (Eichengreen, 2008).
1. What should countries that receive large amounts of inflows do? Should they welcome them, should they learn to live with them, or should they try to limit them?
2. Is good regulation of the domestic banking system a substitute for capital controls?
Declining Inequality
Moderator: Nora Lustig
Join this debate
During the last decade, income inequality declined in most Latin American countries. Two main causes have been identified: a reduction in the skill premium and an increase in government transfers (Lopez-Calva and Lustig, 2010).
1. Which other factors may explain the decline in inequality? For example, what role did active labor market policies and a reduction in gender and ethnic discrimination play?
2. What happened in countries where inequality increased (Costa Rica, Honduras and Uruguay)? Did the skill premium rise? Did educational upgrading stall?
LACEA Membership
For Membership information and other activities of LACEA click here.
Search
Like Vox.LACEA?
Share