Growth and External Financing in Latin America

Guillermo Calvo, Eduardo Fernandez-Arias, Ernesto Talvi and Carmen Reinhart

No 1422, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper discusses the economic performance of Latin America in the last decade, paying special attention to growth and the financial sector. In particular, it shows that external factors, such as like U.S. interest rates and the business cycle, play a key role in capital inflows, investment, and growth. As a result, economic growth in the region tends to be fragile and exhibits a high degree of co-movement, i.e., high cross-country output correlation. This last feature exacerbates fragility, because there is little room for mutual insurance within Latin America in case a country suffers a bad shock, and finance during downturns has to come primarily from outside the region.

Keywords: WP-457 (search for similar items in EconPapers)
Date: 2001-08
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Growth and External Financing in Latin America (2001)
Working Paper: Growth and External Financing in Latin America (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1422

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