Macroeconomic success and social vulnerability: lessons for Latin America from the Celtic Tiger

Abstract This paper uses a political economy approach to examine the nature and social impact of Ireland's economic 'miracle', namely the period of high economic growth known as the 'Celtic Tiger', which lasted from 1995 until 2000. Its principal purpose is to offer a broad and multifaceted reading of this period of Irish development, paying particular attention to the links between macroeconomic success and social vulnerability, in order to draw policy lessons for Latin America. The examination of the Celtic Tiger is prefaced by a brief introduction to some of the sa…

CEPAL Review no.79

Analysis of trade flows between Puerto Rico and CARICOM and prospects for integration

Puerto Rico and Caribbean Community (CARICOM); Caribbean countries share important common characteristics. They are open economies and while their trade specialization patterns are heterogenous, historical, institutional and geographical factors have shaped export and import linkages that are closely tied to those of the United States and Western Europe. CARICOM Caribbean economies and Puerto Rico also adopted, early on, a common approach to development, that of 'industrialisation by invitation'. Its main elements included fiscal incentives, the attraction of foreign direct investmen…

Anuario Estadístico de América Latina y el Caribe 2002 = Statistical Yearbook for Latin America and the Caribbean 2002

La edición 2002 del Anuario estadístico de América Latina y el Caribe contiene una selección actualizada a comienzos de diciembre de las principales series estadísticas disponibles sobre la evolución económica y social de los países de la región. Representa un sistemático esfuerzo de la División de Estadística y Proyecciones de la CEPAL, orientado a homogeneizar las cifras y a hacerlas internacionalmente comparables. La primera parte comprende indicadores socioeconómicos derivados (tasas de crecimiento, proporciones o coeficientes), que representan una visión resumida de cada área de interés y…

Capital flows to Latin America: fourth quarter 2002

The fourth quarter of 2002 saw an increase in investor optimism, especially in October and November. The combination of declining risk aversion and a technically well-positioned market caused a rally in emerging debt markets. In Latin America, markets traded strongly following the elections in Brazil and Ecuador. Brazil enjoyed a dramatic improvement in investor sentiment after the elections, supported by the new government's commitments to continue fiscal and economic reforms, as well as the global easing of credit conditions . Although sovereign spreads remained wide, Brazilian borrower…

Exchange rate regimes in the Caribbean

This document analyses exchange rate regimes in the Caribbean subregion. Caribbean exchange rate regimes are typified into hard and soft pegs. Hard pegs refer to those arrangements that maintain a constant value of the domestic currency in terms of the currency of a major trading partner. The Organisation of Eastern Caribbean States (OECS); economies established a monetary union in 1983. The Bahamas, Belize and Barbados also fixed the value of their domestic currency in relation to the United States dollar in the middle of the 1970s. Soft pegs are monetary arrangements characterized by a force…

How optimal are the extremes?: Latin American exchange rate policies during the Asian crisis

Abstract During the Asian crisis, intermediate exchange rate regimes vanished. It has been argued that those regimes were no longer useful and only the extremes remained valid. The paper analyses three foreign exchange regimes: Argentina (pegged), Chile (band) and Mexico (float). The Argentinean currency board delivered low financial volatility while it was credible, but even then it displayed high real volatility. Mexican float performed well in periods of instability isolating the real sector. The Chilean band delivered a mixed outcome as compared …

Financial crisis and national policy issues: an overview

Abstract In this overview we analyse, first, why funds continued to flow towards emerging economies, while fundamentals in host countries had been deteriorating before the Asian crisis (a rising external deficit, with a significant liquid component; appreciating exchange rates; low capital formation, particularly in Latin America), and why funding remains dry for long since 1998; the role of the nature of the predominant agents and of a process of flows rather than one-shot building of stock of foreign capital are stressed. Then, the analysis focuses on the interrelations of capital flows and …

Report of the Grenada national yachting consultation

The Economic Commission for Latin America and the Caribbean (ECLAC); Subregional Headquarters for the Caribbean embarked on a project Development of a Subregional Marine-based Tourism Strategy in 2001. The project, co-funded by the Government of the Netherlands, is aimed at the development of sustainable yachting tourism in the Eastern Caribbean and focuses on the island arc from the British Virgin Islands in the north to Trinidad and Tobago in the south. The project includes the conduct of national studies in the British Virgin Islands, St. Maarten, Antigua and Barbuda, Saint Luci…

Corporate risk management and exchange rate volatility in Latin America

Abstract This article studies the currency risk management of multinational companies with investments in Latin American countries. The analysis is centred on episodes of currency or financial shocks, searching into the behaviour of the financial management of a firm expecting a significant devaluation. This allowed us to explore the interaction and transmission mechanisms between the microeconomic behaviour and the macroeconomic impact on the foreign exchange market. The analysis was carried out interviewing financial managers of multinational companies from different sectors with headquarter…

Financial regulation and supervision in emerging markets: the experience of Latin America since the Tequila crisis

Abstract The paper deals with changes in the regulation and supervision of the Latin American financial sector in the aftermath of the Tequila Crisis of 1994-1995. While it finds that both have improved, regulation and supervision cannot resolve all problems; good macroeconomic policy and performance are essential complements. This is especially true because of the procyclical nature of financial activity. The paper presents both regional data for Latin America, contrasting it with other emerging markets, and four country case studies (Argentina, Brazil, Chile, and Mexico). The latter show how…

Capital-account and counter-cyclical prudential regulations in developing countries

Abstract This paper explores the complementary use of two instruments to manage capital-account volatility in developing countries: capital account regulations and counter-cyclical prudential regulation of domestic financial intermediaries. Capital-account regulations can provide useful instruments in terms of both improving debt profiles and facilitating the adoption of (possibly temporary); counter-cyclical macroeconomic policies. Prudential regulation and supervision should take into account not only the microeconomic risks, but also the macroeconomic risks associated with boom-bust cycles.…

Returning to an external debate: the terms of trade for commodities in the twentieth century

Abstract This paper looks at the evolution of the terms of trade between commodities and manufactures in the twentieth century. A statistical analysis of the relative price series for 24 commodities and of eight indices reveals a significant deterioration in their barter terms of trade over the course of the twentieth century. This decline was neither continuous, nor was it distributed evenly among individual products, however. The data show that the far-reaching changes that the world economy underwent around 1920 and again around 1980 led to…

Canada's trade and investment with Latin America and the Caribbean

In the 1990s, Canada's trade relations with Latin America and the Caribbean intensified. The signing of the North American Free Trade Agreement (NAFTA) in 1994 signaled the beginning of a new phase in trade relations between Canada and countries in the hemisphere. Since 1994, Canada has signed trade agreements with Costa Rica and Chile. Currently, negotiations are underway for a free trade agreement with Central America. Also, preliminary talks of trade agreements with the Caribbean and the Andean Community have taken place. In addition, Canada is actively participating in negotiati…

The development of services in the Caribbean

The services sector has grown significantly in most countries and in the world economy as a whole. This has been observed in the progression from primary to secondary and/or tertiary sector-led economic growth and development. Services contribute significantly to output, employment and exports. They account for about 80% of the United States output (GDP) and about 65% of GDP of the European Union. Developed countries are the largest service exporters accounting for over 70% of services traded in the late 1990s. Although developing countries account for a relatively smal…

From capital surges to drought: seeking stability for emerging economies

Preface This book consists of two complementary parts: (1) an analysis of new trends in various categories of capital flows to emerging economies since the Asian crisis, their determinants and their international policy implications, and (2) an evaluation of national policies to reduce the volatility of capital flows and the negative impact of such volatility on domestic economies. The book aims to help fill the gap in knowledge on what determines lenders/investors' decisions to enter or withdraw from individual developing countries. It examines how the decision-making process has be…

Building an information society: a Latin American and Caribbean perspective

Abstract New technological options that permit the use of digital systems to create and disseminate information around the world are paving the way for new means of organizing society and economic production and are gradually giving rise to a meta-paradigm that has come to be referred to as the Information Society. Viewed from the perspective of developing countries, the question of how to employ this emerging paradigm to achieve broader development goals and to integrate them more fully into the global Information Society is an issue of the utmost importance on the development agenda…

From hard-peg to hard landing?: recent experiences of Argentina and Ecuador

Abstract Based on the analysis of the Argentinean currency board and the full dollarization scheme in Ecuador this paper argues that an intermediate exchange rate regime (compared to free floating or hard peg) will be a better option for countries subject to external financial shocks and a worldwide export and import structure. It shows that the Argentine convertibility system was successful as an anti-inflationary program. However, the reduction in the inflation rate has been accompanied by a dramatic change in relative prices of tradable and non tradable goods and services, which ha…

Modeling regional macroeconomic interactions: situation and perspectives for macroeconomic coordination in Latin America. Background paper prepared for the REDIMA workshop on Modeling Macroeconomic Coordination in the Andean Community, (Santiago, Chile...

Hubert Escaith is Director of Statistics and Economic Projections Division, ECLAC. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization.. This paper was prepared for the REDIMA workshop on Modeling Macroeconomic Coordination in the Andean Community, Santiago, Chile 22 October 2003. Introduction The early 1990s opened a new era for the analysis of economic interactions between Latin America and Caribbean (LAC) countries. Two channels, real and financial, conveyed th…

Handbook for estimating the socio-economic and environmental effects of disasters