External Crisis Vulnerability in Latin America and the Caribbean

Eduardo Cavallo and Eduardo Fernández-Arias

No 12965, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper assesses the vulnerability of Latin American and Caribbean (LAC) economies to external crises. It shows that while the average LAC economy has made significant strides to reduce vulnerability to crises to its historical minimum, there is still considerable room for improvement, compared to both advanced and non-advanced economies. When compared to other non-advanced economies, the average LAC economy displays a higher level of vulnerability, mainly due to slower improvements in portfolio composition and less accumulation of international reserves since 2000. Advanced economies have lower exposure to external risk factors and a structural resilience advantage to prevent exposure from leading to crises. This analysis highlights the need for LAC economies to focus more on enhancing their risk-mitigating strategies concerning the composition of their external portfolios and reserves accumulation, which will provide a stronger buffer against external shocks and promote overall economic resilience.

Keywords: External crisis; Financial crisis; External balance sheet; Internationalreserves; Macroeconomic imbalances; External debt; Foreign Direct Investment; External assets and liabilities (search for similar items in EconPapers)
JEL-codes: F30 F34 G01 G15 H63 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-ifn and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://publications.iadb.org/publications/english ... nd-the-Caribbean.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:12965

DOI: 10.18235/0005010

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().