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The macroeconomics of the Latin American economic boom

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  • Ocampo, José Antonio

Abstract

This paper argues that the recent boom in the Latin Americaneconomies can be explained by the conjunction of two external factorsnot found together since the 1970s: strong commodity prices (more sofor hydrocarbons and mining products than for agricultural commodities);and exceptional external financing conditions. Concerning the latter, thekey development was the massive influx of capital during two periods of "exuberance" in international financial markets (between mid-2004 and April2006, and between mid-2006 and mid-2007);, particularly the second. It alsoargues for the importance of spreading and consolidating Latin America'stwo great (and complementary); macroeconomic policy innovations ofrecent years: countercyclical fiscal management (still confined to just a fewcountries); and active intervention in currency markets. Such interventionneeds to be based on a growing recognition that the real exchange rateought to be an explicit goal of macroeconomic policy.

Suggested Citation

  • Ocampo, José Antonio, 2007. "The macroeconomics of the Latin American economic boom," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    • Handle: RePEc:ecr:col070:11229
    Note: Includes bibliography
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    1. -, 2007. "Economic survey of the Caribbean, 2006-2007," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 27632, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. -, 2007. "Economic Survey of Latin America and the Caribbean 2006-2007," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1065 edited by Eclac, September.
    3. Ocampo, José Antonio, 2004. "Reconstruir el futuro: globalización, desarrollo y democracia en América Latina," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1850 edited by Cepal.
    4. Ocampo, José Antonio & Parra, María Angela, 2003. "The terms of trade for commodities in the twentieth century," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    5. -, 2006. "Economic survey of the Caribbean, 2005-2006," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 27590, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Jiménez, Juan Pablo & Tromben, Varinia, 2006. "Fiscal policy and the commodities boom: the impact of higher prices for non-renewables in Latin America and the Caribbean," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    7. Kuczynski, Pedro-Pablo & John Williamson (ed.), 2003. "After the Washington Consensus: Restarting Growth and Reform in Latin America," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 350, October.
    8. -, 2006. "Economic Survey of Latin America and the Caribbean 2005-2006," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37603 edited by Eclac, September.
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    Cited by:

    1. Lydia FRAILE, 2009. "Lessons from Latin America's neo-liberal experiment: An overview of labour and social policies since the 1980s," International Labour Review, International Labour Organization, vol. 148(3), pages 215-233, September.
    2. Giovanni Andrea Cornia, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," Working Papers - Economics wp2012_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    3. repec:unu:wpaper:wp2012-09 is not listed on IDEAS
    4. John C. Edmunds & Frederic Chartier, 2015. "Latin American Economic Growth," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 7(1), pages 21-27, January.
    5. Pedro Mendes Loureiro, 2016. "Reformism, Class Conciliation And The Pink Tide: Prospects For The Working Classes Under Left-Of-Centre Governments In Latin America," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 020, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Giovanni Andrea Cornia & Bruno Martorano, 2010. "Policies for Reducing Income Inequality: Latin America During the Last Decade," Working papers 1006, UNICEF,Division of Policy and Strategy.
    7. Veltmeyer, Henry, 2020. "Latin America in the vortex of social change: Development and social movement dynamics," World Development, Elsevier, vol. 130(C).
    8. Ffrench-Davis, Ricardo, 2008. "The global crisis, speculative capital and innovative financing for development," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    9. Ocampo, José Antonio, 2008. "The impact of the global financial crisis on Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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