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Latin America
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ISBN: 9781484301548 1484301544 Year: 2014 Publisher: Washington International Monetary Fund

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Abstract

Policynakers in Latin America are implementing reforms in the regions quest to realize continued improvement in economic performance and living standards.


Book
Global Financial Shocks and Foreign Asset Repatriation : Do Local Investors Play a Stabilizing Role?
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ISBN: 1484361857 1484361458 1484362020 Year: 2014 Publisher: Washington, D.C. : International Monetary Fund,

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Abstract

We study the dynamic response of gross capital flows in emerging market economies to different global financial shocks, using a panel vector-autoregressive (PVAR) setting. Our focus lies primarily on the potentially stabilizing role played by domestic investors in offsetting the response of foreign investors to global shocks. We find evidence of such role, but its existence and magnitude depend on the nature of the shock. Local investors play a meaningful stabilizing role in the face of global uncertainty shocks, as well as shocks to long-term U.S. interest rates. However, while in the former case, sizeable asset repatriation largely offsets the retrenchment of non-residents, in the latter case the extent of the offsetting is much more limited. Meanwhile, residents and non-resident behave alike in response to short-term U.S. interest rate shocks, pulling capital away from emerging markets, although magnitudes are not economically significant. The results shed light on the potential impact of the Fed’s QE tapering on emerging market economies.


Book
Latin America : New Challenges to Growth and Stability
Authors: --- --- --- ---
ISBN: 1498328164 1498302467 149836232X Year: 2014 Publisher: Washington, D.C. : International Monetary Fund,

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Over the past fifteen years countries in Latin America made tremendous progress in strengthening their economies and improving living standards. Although output fell temporarily during the global financial crisis, most economies staged a rapid recovery. However, economic activity across the region has been cooling off and the region is facing a more challenging period ahead. This book argues that Latin America can rise to the challenge, and policymakers in the region are already implementing reforms in education, energy, and other sectors. More is needed, and more is possible, in Latin America’s quest to continue to improve living standards.

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