| Abstract: |
In this paper I use historical data to analyze the relationship between crises
and growth in Latin America. I calculate by how much the region's GDP per
capita has been reduced as a consequence of the recurrence of external crises.
I also analyze the determinants of major balance of payments crises. The main
conclusion is that it is unlikely that Latin America will, on average,
experience a major improvement in long run growth in the future. It is
possible that some countries will make progress in catching up with the
advanced nations. This, however, will not be the norm; most Latin American
countries are likely to fall further behind in relation to the Asian countries
and other emerging nations. Not everything, however, is grim. My analysis also
suggests that fewer Latin America countries will be subject to the type of
catastrophic crises that affected the region in the past. Latin America's
future will be one of "No crises and modest growth." |