nep-lam New Economics Papers
on Central and South America
Issue of 2013‒09‒24
two papers chosen by
Maximo Rossi
University of the Republic

  1. Credit Growth in Latin America: Financial Development or Credit Boom? By Niels-Jakob Harbo Hansen; Olga Sulla
  2. Economic Growth and equality of opportunity By Peragine, Vito; Palmisano, Flaviana; Brunori, Paolo

  1. By: Niels-Jakob Harbo Hansen; Olga Sulla
    Abstract: Banking credit to the private sector in Latin America has on average increased by 7 percent of GDP from primo 2004 to ultimo 2011, with real credit in some countries growing by up to 20 percent per year. This paper documents and analyzes the patterns of credit growth in 18 countries in Latin America and uses econometric methods to determine whether it is indicative of financial deepening or poses risks of credit booms. The strongest credit growth occurred for consumption and mortgages within the household sector and for construction within the corporate sector. At the same time credit has de-dollarized in most countries and there are some signs of maturity lengthening. To assess whether the recent credit growth is excessive two different methods are applied. First, by application of HP-filters the paper finds that credit-to-GDP levels in a number of countries are above their long-term trend. Second, using a panel co-integration approach on 107 high and mid-income countries the paper estimates a model for the credit-to-GDP levels. Comparing the actual levels of credit with the ones predicted by the model we find that some countries in Latin America show significant and positive deviations. These results indicate the existence of a certain level of risk in the recent credit developments.
    Keywords: Credit expansion;Latin America;Private sector;Bank credit;Household credit;Economic models;Cross country analysis;Credit boom; financial development; Latin America; panel co-integration
    Date: 2013–05–10
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:13/106&r=lam
  2. By: Peragine, Vito; Palmisano, Flaviana; Brunori, Paolo
    Abstract: The paper proposes an approach to understand the relationship between inequality and economic growth obtained by shifting the analysis from the space of final achievements to the space of opportunities. To this end, it introduces a formal framework based on the concept of the Opportunity Growth Incidence Curve. This framework can be used to evaluate the income dynamics of specific groups of the population and to infer the role of growth in the evolution of inequality of opportunity over time. The paper shows the relevance of the introduced framework by providing two empirical analyses, one for Italy and the other for Brazil. These analyses show the distributional impact of the recent growth experienced by Brazil and the recent crisis suffered by Italy from both the income inequality and opportunity inequality perspectives.
    Keywords: Achieving Shared Growth,Inequality,Economic Growth,Economic Theory&Research,Poverty Impact Evaluation
    Date: 2013–09–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6599&r=lam

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