When it comes to fiscal policy, it’s better to save for a rainy day than to let it pour

While pro-cyclical fiscal policies – ie. expansionary fiscal policies in booms and contractionary fiscal stances in downturns – remain a common feature among developing countries, some countries have recently moved toward a less pro-cyclical fiscal stance, as a result of stronger institutions. From theoretical and risk management points of view, a countercyclical fiscal policy can […]

When it comes to fiscal policy, it’s better to save for a rainy day than to let it pour

While pro-cyclical fiscal policies – ie. expansionary fiscal policies in booms and contractionary fiscal stances in downturns – remain a common feature among developing countries, some countries have recently moved toward a less pro-cyclical fiscal stance, as a result of stronger institutions. From theoretical and risk management points of view, a countercyclical fiscal policy can […]

Argentina at a Crossroads

Eleven months ago, as the Argentine national football team marched towards the World Cup Final, the common refrain held that it was a country of 40 million football coaches. It may also be one of 40 million currency specialists. When asked to ballpark the true rate of inflation over coffee in Recoleta, Buenos Aires, Argentine […]

How Commodity-Dependent Are Latin American Economies?

The end of the upswing phase of the commodity price super-cycle after its peak in 2011 has lowered economic growth prospects in most of Latin America. While that broad statement can hardly be disputed, chapter 3 of the latest IMF Western Hemisphere Regional Economic Outlook called attention to underlying significant differences among countries in the […]

How Commodity-Dependent Are Latin American Economies?

The end of the upswing phase of the commodity price super-cycle after its peak in 2011 has lowered economic growth prospects in most of Latin America. While that broad statement can hardly be disputed, chapter 3 of the latest IMF Western Hemisphere Regional Economic Outlook called attention to underlying significant differences among countries in the […]

Toward a Migration Development Bank for Transition Economies

Labor migration and remittances may bring positive economic effects to developing countries. This is the case particularly in countries like those in Eastern Europe and Former Soviet Union members where remittances constitute high shares of foreign-currency revenues and GDP. There is nevertheless clear evidence of an untapped development potential associated with those flows of labor […]

BRICS Apart as Oil Prices Plunge

The oil price plunge since last June has been deemed, overall, as a boon for the global economy. However, that depends on where one stands as a producer or user, as illustrated here with the divergence of impacts on BRICS economies. Lower oil prices have come for long  Brent crude oil prices fell to US$45 […]

Are Mega-Trade Agreements a Threat to Brazil?

The landscape of international trade negotiations has been undergoing an upheaval. On the multilateral level, after 15 years of unsuccessful attempts to close the Doha Development Round at the World Trade Organization (WTO), the negotiation system has shown to be highly vulnerable to blockades by any small group of member countries. The complex web of […]

Latin American Corporate Finance: Is There a Dark Corner?

Since last year there has been much talk of possible financial stress stemming from increased debt leverage in non-financial corporates of emerging market economies. A recent study has brought to light some key evidence on the Latin American case (Bastos et al, 2015). EME non-financial corporate debt has been on the rise Back in 2013, […]

Fiscal Policy: Cycle and Space Matter

I am among those economists who have argued that expansive fiscal policy has been missing as a lever to support recovery in advanced economies, especially in the Eurozone – see here and here. At the same time, I have cast doubts on recent attempts of using it to prop up growth in some emerging markets – see here and here in the […]