On the evolution of TFP in Latin America

Due to several policy distortions, including import-substitution industrialization, widespread government intervention and both domestic and international competitive barriers, there has been a general presumption that Latin America has been much less productive than the leading economies in the last decades. In this paper we show, however, that until the late seventies Latin American countries had high productivity levels relative to the United States. It is only after the late seventies that we observe a fast decrease of relative TFP in Latin America. We also show that the inclusion of human capital in the production function makes a crucial difference in the TFP calculations for Latin America.

Impact investing: portfolio company selection in Latin America

O documento analisa como investidores de impacto selecionar suas companhias de portfólio na América Latina e que critérios são avaliados no processo. Uma vez que praticamente ne-nhuma pesquisa sobre isso foi con conduzidos até à data, e desde que o modelo de processo de seleção aplicados em capital de risco não é dissemelhantes, foi adotado essa abordagem. Os resultados revelam que os investidores de impacto originar e avaliar negócios de uma for-ma semelhante a capitalistas de risco , mas que alguns critérios são ajustados e outros adicio-nados a fim de refletir o duplo objectivo de investimento de impacto. Os investidores de im-pacto podem originar ofertas passivamente, mas eles preferem procurar empreendimentos sociais de forma proativa: contatos pessoais, o acesso a redes e eventos do setor são cruciais neste contexto. Impacto Investidores considerando um investimento em pesquisa para a Amé-rica Latina inteira, empreendedores sociais honestos e confiáveis comprometidos com impacto social; empreendimentos sociais elegíveis devem ser rentáveis com potencial de escalabilidade; o produto deve ter um impacto social, ou seja, criar valor para o consumidor individual e para a comunidade em geral; tamanho do mercado e crescimento do mercado são fatores externos cruciais; e as características de negócio dependem de atitude de risco do investidor e as perspectivas de uma saída bem sucedida, tanto em termos financeiros e sociais. Os investi-dores de impacto também estão dispostos a dar apoio não financeiro antes de um investimen-to, se um empreendimento social, mostra alto potencial para atingir o seu objectivo dual.

Structural transformation and productivity in Latin America

This article examines the e¤ects of sectorial shifts and structural transformation on the recent productivity path of Latin America. We use a four-sector (agriculture, industry, modern services and traditional services) general equilibrium model calibrated to the main economies in the region. The model very closely replicates labor reallocations across sectors and the growth of aggregate labor productivity from 1950 to 2005. Structural transformation explains a sizeable portion of the region s convergence in the rst decades. In most cases, the poor performance of the traditional services sector is the main cause of the slowdown in productivity growth observed in the region after the mid-1970s and is a key factor in explaining the divergence during this period.

Extreme observations and diversification in Latin American emerging equity markets

In this paper, we focus on the tails of the unconditional distribution of Latin American emerging markets stock returns. We explore their implications for portfolio diversification according to the safety tirst principIe, tirst proposed by Roy (1952). We tind that the Latin American emerging markets have signiticantly fatter tails than industrial markets. especially, the lower tail of the distrihution. We consider the implication of the safety tirst principIe for a U .S. investor who creates a diversitied portfolio using Latin American stock markets. We tind that a U.S. investor gains by adding Latin American equity markets to her purely domestic portfolio. For different parameter specitications. we finu a more realistic asset allocation than the one suggested by the Iiterature haseu on the traditional mean-variance framework.

Common factors in Latin America's business cycles

This paper constructs new business cycle indices for Argentina, Brazil, Chile, and Mexico based on common dynamic factors extracted from a comprehensive set of sectoral output, external trade, fiscal and financial variables. The analysis spans the 135 years since the insertion of these economies into the global economy in the 1870s. The constructed indices are used to derive a business cyc1e chronology for these countries and characterize a set of new stylized facts. In particular, we show that ali four countries have historically displayed a striking combination of high business cyc1e volatility and persistence relative to advanced country benchmarks. Volatility changed considerably over time, however, being very high during early formative decades through the Great Depression, and again during the 1970s and ear1y 1980s, before declining sharply in three of the four countries. We also identify a sizeable common factor across the four economies which variance decompositions ascribe mostly to foreign interest rates and shocks to commodity terms of trade.

Analysis of the economic and financial relations between Latin American and the Caribbean and the BRICS group

This document has been prepared in compliance with Activity III.1.2 of the Work Programme of SELA for the year 2015, entitled “Analysis of the economic and financial relations between Latin America and the Caribbean and the BRICS countries”. The document comprises an introduction, four chapters and a final section with the conclusions and recommendations stemming from the study. Chapter I describes the economic performance of the BRICS countries, their economic relations with Latin America and the Caribbean and the functioning of the development banks of the member countries. Chapter II assesses the financial architecture of Latin America and the Caribbean and explores the needs for financing in the region. Chapter III deals with the regulatory frameworks governing public and private investments in Latin America and the Caribbean and the Bilateral Investment Treaties with the BRICS countries. Finally, Chapter IV describes the main features of the New Development Bank (NDB) and the Contingent Reserve Agreement of the BRICS

How the full opening of the capital account to highly liquid financial markets led Latin America to two and a half cycles of ‘mania, panic and crash’

Latin America has recently experienced three cycles of capital inflows, the first two ending in major financial crises. The first took place between 1973 and the 1982 ‘debt-crisis’. The second took place between the 1989 ‘Brady bonds’ agreement (and the beginning of the economic reforms and financial liberalisation that followed) and the Argentinian 2001/2002 crisis, and ended up with four major crises (as well as the 1997 one in East Asia) — Mexico (1994), Brazil (1999), and two in Argentina (1995 and 2001/2). Finally, the third inflow-cycle began in 2003 as soon as international financial markets felt reassured by the surprisingly neo-liberal orientation of President Lula’s government; this cycle intensified in 2004 with the beginning of a (purely speculative) commodity price-boom, and actually strengthened after a brief interlude following the 2008 global financial crash — and at the time of writing (mid-2011) this cycle is still unfolding, although already showing considerable signs of distress. The main aim of this paper is to analyse the financial crises resulting from this second cycle (both in LA and in East Asia) from the perspective of Keynesian/ Minskyian/ Kindlebergian financial economics. I will attempt to show that no matter how diversely these newly financially liberalised Developing Countries tried to deal with the absorption problem created by the subsequent surges of inflow (and they did follow different routes), they invariably ended up in a major crisis. As a result (and despite the insistence of mainstream analysis), these financial crises took place mostly due to factors that were intrinsic (or inherent) to the workings of over-liquid and under-regulated financial markets — and as such, they were both fully deserved and fairly predictable. Furthermore, these crises point not just to major market failures, but to a systemic market failure: evidence suggests that these crises were the spontaneous outcome of actions by utility-maximising agents, freely operating in friendly (‘light-touch’) regulated, over-liquid financial markets. That is, these crises are clear examples that financial markets can be driven by buyers who take little notice of underlying values — i.e., by investors who have incentives to interpret information in a biased fashion in a systematic way. Thus, ‘fat tails’ also occurred because under these circumstances there is a high likelihood of self-made disastrous events. In other words, markets are not always right — indeed, in the case of financial markets they can be seriously wrong as a whole. Also, as the recent collapse of ‘MF Global’ indicates, the capacity of ‘utility-maximising’ agents operating in (excessively) ‘friendly-regulated’ and over-liquid financial market to learn from previous mistakes seems rather limited.

How the full opening of the capital account to highly liquid financial markets led Latin America to two and a half cycles of ‘mania, panic and crash’

Latin America has recently experienced three cycles of capital inflows, the first two ending in major financial crises. The first took place between 1973 and the 1982 ‘debt-crisis’. The second took place between the 1989 ‘Brady bonds’ agreement (and the beginning of the economic reforms and financial liberalisation that followed) and the Argentinian 2001/2002 crisis, and ended up with four major crises (as well as the 1997 one in East Asia) — Mexico (1994), Brazil (1999), and two in Argentina (1995 and 2001/2). Finally, the third inflow-cycle began in 2003 as soon as international financial markets felt reassured by the surprisingly neo-liberal orientation of President Lula’s government; this cycle intensified in 2004 with the beginning of a (purely speculative) commodity price-boom, and actually strengthened after a brief interlude following the 2008 global financial crash — and at the time of writing (mid-2011) this cycle is still unfolding, although already showing considerable signs of distress. The main aim of this paper is to analyse the financial crises resulting from this second cycle (both in LA and in East Asia) from the perspective of Keynesian/ Minskyian/ Kindlebergian financial economics. I will attempt to show that no matter how diversely these newly financially liberalised Developing Countries tried to deal with the absorption problem created by the subsequent surges of inflow (and they did follow different routes), they invariably ended up in a major crisis. As a result (and despite the insistence of mainstream analysis), these financial crises took place mostly due to factors that were intrinsic (or inherent) to the workings of over-liquid and under-regulated financial markets — and as such, they were both fully deserved and fairly predictable. Furthermore, these crises point not just to major market failures, but to a systemic market failure: evidence suggests that these crises were the spontaneous outcome of actions by utility-maximising agents, freely operating in friendly (light-touched) regulated, over-liquid financial markets. That is, these crises are clear examples that financial markets can be driven by buyers who take little notice of underlying values — investors have incentives to interpret information in a biased fashion in a systematic way. ‘Fat tails’ also occurred because under these circumstances there is a high likelihood of self-made disastrous events. In other words, markets are not always right — indeed, in the case of financial markets they can be seriously wrong as a whole. Also, as the recent collapse of ‘MF Global’ indicates, the capacity of ‘utility-maximising’ agents operating in unregulated and over-liquid financial market to learn from previous mistakes seems rather limited.

Why has productivity growth stagnated in most Latin American countries since the neo-liberal reforms?

Latin America’s economic performance since the beginning of neo-liberal reforms has been poor; this not only contrasts with its own performance pre-1980, but also with what has happened in Asia since 1980. I shall argue that the weakness of the region’s new paradigm is rooted as much in its intrinsic flaws as in the particular way it has been implemented. Latin America’s economic reforms were undertaken primarily as a result of the perceived economic weaknesses of the region — i.e., there was an attitude of ‘throwing in the towel’ vis-à-vis the previous state-led import substituting industrialisation strategy, because most politicians and economists interpreted the 1982 debt crisis as conclusive evidence that it had led the region into a cul-de-sac. As Hirschman has argued, policymaking has a strong component of ‘path-dependency’; as a result, people often stick with policies after they have achieved their aims, and those policies have become counterproductive. This leads to such frustration and disappointment with existing policies and institutions that is not uncommon to experience a ‘rebound effect’. An extreme example of this phenomenon is post-1982 Latin America, where the core of the discourse of the economic reforms that followed ended up simply emphasising the need to reverse as many aspects of the previous development (and political) strategies as possible. This helps to explain the peculiar set of priorities, the rigidity and the messianic attitude with which the reforms were implemented in Latin America, as well as their poor outcome. Something very different happened in Asia, where economic reforms were often intended (rightly or wrongly) as a more targeted and pragmatic mechanism to overcome specific economic and financial constraints. Instead of implementing reforms as a mechanism to reverse existing industrialisation strategies, in Asia they were put into practice in order to continue and strengthen ambitious processes of industrialisation.

Metabolic syndrome in postmenopausal women: higher prevalence in the Northeastern Region of Brazil than in other Latin American countries and the influence of obesity and socioeconomic factors

SILVEIRA, Inavan Lopes da; MARANHÃO, T. M. O.; AZEVEDO, George Dantas. Metabolic syndrome in postmenopausal women: higher prevalence in the Northeastern Region of Brazil than in other Latin American countries and the influence of obesity and socioeconomic factors. Climacteric (Carnforth), v.10, p.438-439, 2007.