A century of economic growth in Latin America

2006

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper presents a number of facts about growth in Latin America, and shows how critical correlates of growth have evolved over time. In comparison with other regions, Latin America has consistently exhibited higher macroeconomic volatility, lower openness, and higher income inequality, though openness and macroeconomic stability have improved since the early 1990s. The paper then discusses three views of why reforms have not led to higher growth in Latin America: that reforms have gone too far; that reforms have not gone far enough; and that reforms have missed the point.

The Latin America and Caribbean (LAC) region has seen a decade of remarkable growth and income convergence. Growth has been a key driver for reducing poverty and boosting shared prosperity. It has been debated how much of this decade of growth has been driven by policy reforms and how much was due to the favorable external conditions. While external factors were supportive and relevant, the effect of domestic policies was just as relevant for explaining LAC's recent growth performance. The emphasis of domestic policy has shifted from stabilization policies to structural policies. In addition, a benchmarking exercise reveals which policy gaps will lead to the highest potential growth-payoffs for each country and helps identify potential trade-offs. The authors analyze growth in LAC using descriptive statistics and growth econometrics. The authors use these results for explaining the pattern of growth in LAC over the last decade, for looking ahead, and to identify potential policy gaps.

Estudios de economía, 2006

Despite having accumulated physical and human capital at significant rates, Latin America's growth has been generally disappointing. Successful growth episodes have been accompanied by surges in TFP, sound and stable macroeconomic policies, and fewer distortions and ...

Revista de Ciencias Sociales, 2022

The objective of this research was to describe the performance of economic growth and its components in the South American region during the period 1950-2019. The research was descriptive in nature under a quantitative approach, with data from secondary sources covering the period in question. The behavior of the main variables associated with growth, such as Gross Domestic Product and the productive inputs capital and labor adjusted for human capital, were described for the period under study. The results obtained show that economic growth has been relatively modest since the early 1970s. However, in recent years, several countries in the region have made considerable progress in terms of growth of Gross Domestic Product per capita.

2003

Comparing the long run growth paths between regions of Latin American countries and developed countries is the main focus of this paper. Exogenous and endogenous growth models provide the theoretical background. Simulations of growth rates for developing and selected developed countries are made based upon explanatory variables, using the US as the benchmark. Data for the period 1950-1992 were applied to suitable econometric models -polynomial distributed lag, simultaneous equations -where estimates showed with confidence and accuracy that: 1) In all economies, simulations have proved that human capital and, consequently, technological improvement in the economy as an engine of growth are the responsible factors for generating increasing returns to scale to accelerate the rate of growth; 2) Brazilian growth is the most sensitive to technological change, compared to other regions of Latin American Countries; 3) There is no unique growth policy for the developing economies, but improvement of productivity is common to all of them although at different rates; 4) Political and institutional factors seem to play an important role to explain the growth gap between developed and developing countries.

Oxford University Economic and Social History Series, 2005

Using a new database for the whole 1900-2000 period, this paper estimates the relative contribution of endogenous and exogenous factors in GDP and productivity growth in each of the six larger Latin American economies with multivariate annual models, and complements these with a single aggregate model using panel data by decade to test for convergence within the region and with the US. Our method is innovative as it includes external economic shocks as well as endogenous growth variables. The main findings are: (i) that investment contributed most to growth during the middle of the century when the region was relatively closed to the world economy and state was proactive; (ii) that the six main economies did converge considerably over the century due to improvements in resource allocation, advances in health and education and increased investment effort; (iii) that these improvements were not, however, enough to produce convergence between Latin America and US; and (iv) that terms of trade volatility, trade and interest rate shocks were major obstacle to both sustained economic growth and catching up.

2005

Vanishing Growth in Latin America

This document was prepared by Andrés Solimano, Regional Adviser of the Economic Commission for Latin America and the Caribbean, and Raimundo Soto of the Catholic University of Chile. Paper prepared for the seminar "Latin American Growth: Why So Show?" organized by ECLAC to be held in Santiago, Chile on December 4-5, 2003. Comments by F. Rosende, A. Hofman and C. Aravena are gratefully acknowledged. We thank C. de Camino, A. Hofman, and C. Aravena for the data and Mauricio Larraín for able research assistantship. All remaining errors are ours. The views expressed in this document, which has been reproduced without formal editing, are those of the autor and do not necesarrily reflect the views of the Organization.

2005

Hubert Escaith is Director of the Division of Statistics and Economic Projections of ECLAC. These methodological notes were prepared for a lecture at the 2005 ECLAC Summer School. They are based on, and up-date, a series of papers in Spanish published in 2003 and 2004, which received in 2005 the award Maestro Jesus Silva Herzog" from Economic Research Institute of the Universidad National Autonoma de Mexico. 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. Summary The document analyses the dynamics of economic growth in Latin America. The objective is to present from a didactic perspective several techniques used for extrapolating growth trends, and apply them to the regional situation at the end of the 1990-2003 economic cycle. The document reviews the medium term determinants of growth in the region from the dual standpoints of production function appr...

Investigación Económica, 2004

Cuadernos Económicos de ICE, 2009

This paper explores the long-term relationship between economic growth and the allocation of resources among sectors for a panel of 18 Latin American countries over the period 1950-2006. Using as high a level of disaggregation as the data allows, we use dynamic panel data analysis to calculate the elasticities of sectoral growth to overall output. This captures the strength of the linkages between sectors and gives some indication of which sectors can be considered to be 'drivers of growth'. While it is traditionally believed that the manufacturing sector is the 'engine of growth', empirical results show that with the rise of the so-called 'new economy', a more nuanced reply is required, and that other sectors can also serve as catalysts for faster growth. In particular, we find support for the proposition that certain groups of services can also play the role of 'leading sectors'. Pointedly, however, the results show a consistently low or negligible relationship between primary resource sectors and economic growth. These results are put in perspective of the debates on 'deindustrialisation' and 'premature de-industrialisation'. The causes and the implications of this process for policies to enhance long-term growth and technological acquisition are discussed.

2005

The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply and judgment on the part of The World Bank of the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission promptly to reproduce portions of the work.

2014

The Latin America and the Caribbean region (LAC) has seen a "decade of convergence". During the last decade, LAC countries have exhibited high growth rates and recovered quickly after the global financial crisis. The region benefited from favorable external conditions, in particular high commodity prices, and relatively loose financial conditions, especially in the United States. LAC had considerably lost ground vis-à-vis US income levels from 1980 until the early 2000s, but has converged somewhat to the US level since. Growth in LAC was thus not only higher in this period than before but also higher than in the United States (and many advanced economies), hence constituting a 'decade of convergence'.

Journal of Latin American Studies, 1992

The paper stresses the evolutionary and adaptive experience of Latin American growth between 1950 and 1980, and provides a synthetic view by considering the sources of growth within a simple production framework.

IMF Staff Papers, 2008

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper investigates the sensitivity of Latin American GDP growth to external developments using a Bayesian VAR model with informative steady-state priors. The model is estimated on quarterly data from 1994 to 2006 on key external and Latin American variables. It finds that 50 to 60 percent of the variation in Latin American GDP growth is accounted for by external shocks. Conditional forecasts for a variety of external scenarios suggest that Latin American growth is robust to moderate declines in commodity prices and U.S. or world growth, but sensitive to more extreme shocks, particularly a combined external slowdown and tightening of world financial conditions.