Latin America in the Rearview Mirror

Harold Cole, Lee Ohanian, Alvaro Riascos () and James Schmitz

No 11008, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Latin American countries are the only Western countries that are poor and that aren't gaining ground on the United States. This paper evaluates why Latin America has not replicated Western economic success. We find that this failure is primarily due to TFP differences. Latin America's TFP gap is not plausibly accounted for by human capital differences, but rather reflects inefficient production. We argue that competitive barriers are a promising channel for understanding low Latin TFP. We document that Latin America has many more international and domestic competitive barriers than do Western and successful East Asian countries. We also document a number of microeconomic cases in Latin America in which large reductions in competitive barriers increase productivity to Western levels.

JEL-codes: O1 O4 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-dev and nep-lam
Note: EFG
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Citations: View citations in EconPapers (22)

Published as Harold L. Cole & Lee E. Ohanian & Alvaro Riascos & James A. Schmitz, Jr., 2006. "Latin America in the rearview mirror," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sep.
Published as Cole, Harold L. & Ohanian, Lee E. & Riascos, Alvaro & Schmitz, James Jr, 2005. "Latin America in the rearview mirror," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 69-107, January.

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Journal Article: Latin America in the rearview mirror (2005)
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