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The impact of the global financial crisis on Latin America

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  • Ocampo, José Antonio

Abstract

This essay argues that while the complete lack of liquiditycharacterizing the most severe phase of the financial crisis unleashedin September 2008 is now a thing of the past, lending and productionactivity in the industrialized countries are both contracting rapidly andthe financial system is still undercapitalized. Of all the external channelsthrough which the crisis has been transmitted to Latin America, the dropin remittances is the least important. The most widespread negative effectswill come from the decline in the volume of international trade and thesharp deterioration in the terms of trade for commodities. In addition, aperiod of very restricted external private-sector financing lies ahead. Theregion's economies have entered this crisis in a stronger position than inthe past, mainly because public debt is lower and international reservesare large, but this will only partially mitigate the repercussions of the worstglobal economic crisis since the Great Depression of the 1930s.

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  • 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.
    • Handle: RePEc:ecr:col070:11316
    Note: Includes bibliography
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    File URL: http://repositorio.cepal.org/handle/11362/11316
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    References listed on IDEAS

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    1. Charles P. Kindleberger & Robert Z. Aliber, 2005. "Manias, Panics and Crashes," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-62804-5, December.
    2. 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.
    3. -, 2008. "Economic Survey of Latin America and the Caribbean 2007-2008: Macroeconomic policy and volatility," Estudio Económico de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1067 edited by Eclac, September.
    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. -, 2007. "Preliminary Overview of the Economies of Latin America and the Caribbean 2007," Balance Preliminar de las Economías de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 969 edited by Eclac.
    6. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
    7. Alejandro Jara & Camilo Tovar, 2008. "Monetary and financial stability implications of capital flows in Latin America and the Caribbean," BIS Papers, Bank for International Settlements, number 43.
    8. World Bank, 2009. "Global Economic Prospects 2009 : Commodities at the Crossroads," World Bank Publications - Books, The World Bank Group, number 2581, December.
    9. 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.
    10. 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.
    11. -, 2008. "Preliminary Overview of the Economies of Latin America and the Caribbean 2008," Balance Preliminar de las Economías de América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 971 edited by Eclac.
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    1. 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.
    2. Titelman Kardonsky, Daniel & Pérez Caldentey, Esteban & Pineda Salazar, Ramón, 2009. "The bigness of smallness: the financial crisis, its contagion mechanisms and its effects in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    3. Martinez, Lisana B. & Terceño, Antonio & Teruel, Mercedes, 2013. "Sovereign bond spreads determinants in Latin American countries: Before and during the XXI financial crisis," Emerging Markets Review, Elsevier, vol. 17(C), pages 60-75.

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