Center and Periphery: the Propagation of the Global Crisis to Latin America

Sebastián Katz () and Eduardo Corso ()
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Sebastián Katz: Central Bank of Argentina

No 201048, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department

Abstract: Although the international crisis was initially seen as an event limited to a particular segment of the financial systems of central economies, it rapidly escalated and became global through different transmission channels, raising doubts over the hypothesis of the so-called decoupling. Latin American economies faced this new scenario under more robust conditions than in the past episodes of crisis. The good macroeconomic performance of the region during the five-year period prior to the onset of the crisis reduced the vulnerability of these economies and increased the degrees of freedom of economic policy authorities to implement counter-cyclical policies in the new international context. Despite the efforts made by these economies, a comprehensive policy response will require a commitment of resources and coordination by the main developed economies. In this sense, policy challenges are not limited to emerging economies: they imply a global coordination effort.

Keywords: center and periphery; counter-cyclical policies; emerging economies; international crisis; Latin America; transmission mechanisms (search for similar items in EconPapers)
JEL-codes: E60 F42 F44 G01 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2010
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