Latin America's Debt Research Articles

Trade finance and Latin America's lost decade: The forgotten link

The Great recession has brought back to foreground the link between trade credit, international trade and economic growth. Scholars have recently found that the effects of the fall in trade finance are strong and accurately explain the recent fall in international trade. We argue that the lost decade that followed Latin America's debt crisis is a useful comparative benchmark to recognize the scope of impact on international trade stemming from a sharp decline in trade finance. The years that followed the Mexican debt default of 1982 experienced a decrease in the financial flows to the region. However, the lending policies adopted by export agencies had a countercyclical effect. They reacted to defaults by suspending their cover activities for exports to defaulting countries, but soon reintroduced them once governments entered into a credit program from the IMF. This paper is the first to estimate the impact of trade finance on international trade in the aftermath of Latin America's debt crisis.

Revisiting Latin America's debt crisis: some lessons for the periphery of the eurozone

A Domar–Pasinetti model of an emerging-market open economy with output growth endogenous to aggregate demand is presented, with foreign debt, interest and exchange rates playing a relevant role in the dynamics of the debt-to-GDP ratio (d). The model is used to assess the macroeconomic effects of the orthodox policy (fiscal austerity) implemented by policy makers to cope with the foreign debt crisis of Latin America in the 1980s. Such policy involved high costs in terms of welfare, job and output losses to no avail, since the region’s financial fragility remained largely unresolved, in the end resulting in the so-called ‘lost decade’. The main policy insight of Domar’s and Pasinetti’s analysis, we argue, posits a pro-growth expansionary policy as the most efficient strategy to abate and bring d to a sustainable path. Finally, we contend that Latin America’s experience provides insight for dealing with the ongoing crisis of the periphery of the eurozone.

Las relaciones externas de América Latina en 1985

In early 1986, there is an opportunity to improve relations between the US and Latin America, but it may be short-lived. Political leaders in most of the countries of Latin America are implementing pragmatic and moderate foreign and economic policies that are compatible with long-term US interests and are willing to cooperate with Washington. They may, however, be forced to change their approach if they are unable to provide some relief from the distressing economic problems facing the region. Washington has yet to take decisive action to ease Latin America's debt burden. We maintain that if the current opportunity to work for Inter-American cooperation is not taken advantage of, the economic and social crisis in Latin America will probably worsen.

The puzzle of Latin American economic development

Chapter 1: Development in Latin America: Conceptualizing Economic Change in the Region Chapter 2: Historical Legacies: Patterns of Unequal and Unstable Growth Chapter 3: Import Substitution Industrialization: Looking Inward for the Source of Economic Growth Chapter 4: Latin America's Debt Crisis: The Limits of External Financing Chapter 5: Macroeconomic Stabilization: A Critical Ingredient for Sustained Growth Chapter 6: The Role of the State: From a Smaller to a Smarter State Chapter 7: Financing for Development: Public and Private Capital Flows to Latin America Chapter 8: Contemporary Trade Policy: Engine or Brakes for Growth? Chapter 9: Policies Underpinning Growth: Productivity and Competitiveness in the Global Economy Chapter 10: Rural Development: Sowing the Seeds of Equitable, Sustainable Growth in Latin America Chapter 11: Poverty and Inequality: Addressing the Social Deficit in Latin America Chapter 12: Health Policy: Investing in People's Future Chapter 13: Education Policy: The Source of Equitable, Sustainable Growth Chapter 14: Environmental Challenges: Internalizing the Costs of Development Chapter 15: Lessons Learned: Cycles in Latin American Development

Progress toward development in Latin America: from Prebisch to technological autonomy

Part 1 Structuralism as a theory of economic development: Latin American structuralist economics - an evaluation and critique, James Cypher CEPALista reflections on the structuralist theory of development, Osvaldo Sunkel development strategies in Latin America - from import substitution to what?, Robert J.Alexander. Part 2 Failures of past development strategies: lessons for the future, parastatal enterprises in Latin America's development, William Glade Latin America's debt crisis, the international monetary fund, and financial reform, Ron J. Phillips the role of institutional and behavioural factors in the evolution of Argentina's manufacturing exports, Hugh Schwartz technology, ceremonies, and institutional appropriateness - historical origin of Mexico's agricultural crisis, William Cole. Part 3 Technology-based strategies for development: beyond Cepal to renewed growth and equity, science, technology, and development - a critical examination of the contributions of Miguel S.Wionczek, D.D.James toward sustainable development, O.Sunkel technological autonomy, linkages, and development, J.L.Dietz a Latin American development model for the future, J.L.Dietz and D.D.James.

H. A. Holley, Developing Country Debt: the Role of the Commercial Banks, Chatham House Papers no. 35, (London, New York and Andover: Routledge & Kegan Paul, 1987). - Robert A. Pastor (ed.), Latin America's Debt Crisis: Adjusting to the Past or Planning for the Future? (Boulder, Colorado: Lynne Rienner Publishers, 1987). - Economic Commission for Latin America and the Caribbean,

H. A. Holley, Developing Country Debt: the Role of the Commercial Banks, Chatham House Papers no. 35, (London, New York and Andover: Routledge & Kegan Paul, 1987). - Robert A. Pastor (ed.), Latin America's Debt Crisis: Adjusting to the Past or Planning for the Future? (Boulder, Colorado: Lynne Rienner Publishers, 1987). - Economic Commission for Latin America and the Caribbean,

Latin America's Debt: Problems and Prospects

Latin America's Debt: Problems and Prospects

Latin America's Debt: Problems and Prospects

Latin America's Debt: Problems and Prospects

Debt and Development: The Future of Latin America

Renegotiation of Latin America's debt since 1982 may have led to the illusion that the problem period has passed. At best, the crisis is under control; at worst, this is only the calm before the storm, lulling too many in the developed world into complacency, while those paying the real costs of adjustment are forced beyond all reasonable limits of sacrifice. The challenge is to turn the ideological tables against the orthodoxy that has, until now, weighed heavily, if not exclusively, in defining the debt problem and in providing solutions acceptable to principal vested interests, in this instance the international banks and the International Monetary Fund (IMF) [Dornbusch 1985, p. 167].' The affected countries in Latin America are slowly attempting to come to terms with a resolution to the debt crisis that concentrates its burden on but a segment of the principals, and the poorest at that, gen-

Latin America's recovery from debt problems: An assessment of model-based projections

This paper examines economic assumptions used in assessing prospective economic adjustment of Latin America in response to its debt problems. The analysis compares forecasts obtained by combining parameter estimates from different researchers' trade models with the authors' macroeconomic models for Brazil. Chile, and Mexico. The influence of econometric procedure on simulation results is discussed. Then, by simulation analysis, the following issues are addressed: (1) likelihood of high domestic growth rates for Latin America in the late 1980s; (2) whether OECD growth or interest rates have a larger impact on developing-country economies; (3) effects of dollar depreciation and high interest rates on Latin America's debt problems.