 The Road to Redemption: Policy Response to Crises in Latin AmericaCarlos Vegh and Guillermo Vuletin IMF Economic Review, 2014, vol. 62, issue 4, 526-568 Abstract: This paper analyzes the fiscal and monetary policy responses to crises in Latin America over the last 40 years. We argue that, on average, Latin American countries have “graduated” in terms of their policy responses in the sense that they have been able to switch from procyclical to counteryclical policy responses. This average response, however, masks a great deal of heterogeneity with some countries (such as Chile, Brazil, and Mexico) leading the graduation process and others (like Argentina and Venezuela) still showing procyclical policy responses. We further argue that countercyclical policy responses have been effective in reducing the duration and intensity of crises. Finally, we relate our analysis to the current crisis in the Eurozone and argue that, like in many instances in Latin America, procyclical fiscal policy has aggravated the duration and intensity of the crisis. Date: 2014 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:62:y:2014:i:4:p:526-568 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.