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Macroeconomic Stabilization in Latin America: Recent Experience and Some Sequencing Issues

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  • Sebastian Edwards

Abstract

This paper reviews the experience of Latin American countries with structural reforms, and discusses the relationship between macroeconomic stabilization and trade liberalization programs undertaken in the region since the early 1980s. The problem of sequencing of stabilization and structural reforms is analyzed with detail. First from a theoretical perspective, second, reviewing the stabilization programs implemented in Latin America on a case by case basis. Particular emphasis is given to the analysis of the fiscal consequences of the chosen sequencing, as well as its impact on the evolution of domestic savings and investment, and on foreign investment. The final part of the paper concentrates on the behavior of real exchange rates during the stabilization programs and its relationship with trade reforms.

Suggested Citation

  • Sebastian Edwards, 1994. "Macroeconomic Stabilization in Latin America: Recent Experience and Some Sequencing Issues," NBER Working Papers 4697, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4697
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    Cited by:

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    2. Antoni Estevadeordal & Christian Volpe Martincus, 2006. "Specialization and Diverging Manufacturing Structures: The Aftermath of Trade Policy Reforms in Developing Countries," Development Working Papers 220, Centro Studi Luca d'Agliano, University of Milano.
    3. Carl Grekou, 2014. "On the effectiveness of devaluations in emerging and developing countries," EconomiX Working Papers 2014-61, University of Paris Nanterre, EconomiX.
    4. Carl Grekou, 2014. "On the effectiveness of devaluations in emerging and developing countries," Working Papers hal-04141278, HAL.
    5. Carl Grekou, 2019. "From nominal devaluations to real depreciations," International Economics, CEPII research center, issue 157, pages 68-81.
    6. Márquez, Gustavo & Pagés, Carmen, 1997. "Trade and Employment: Evidence from Latin America and the Caribbean," IDB Publications (Working Papers) 6064, Inter-American Development Bank.
    7. Carmen Pagés-Serra & Gustavo Márquez, 1998. "Comercio y empleo: elementos de juicio de América Latina y el Caribe," Research Department Publications 4109, Inter-American Development Bank, Research Department.
    8. Jorge Saba Arbache, 2004. "Do Structural Reforms always Succeed?: Lessons from Brazil," WIDER Working Paper Series RP2004-58, World Institute for Development Economic Research (UNU-WIDER).
    9. Carlos Arteta & Barry Eichengreen & Charles Wyplosz, 2001. "When Does Capital Account Liberalization Help More than It Hurts?," NBER Working Papers 8414, National Bureau of Economic Research, Inc.
    10. Cardenas, Mauricio & Barrera, Felipe, 1997. "On the effectiveness of capital controls: The experience of Colombia during the 1990s," Journal of Development Economics, Elsevier, vol. 54(1), pages 27-57, October.
    11. Mr. Anoop Singh & Mr. Martin D. Cerisola, 2006. "Sustaining Latin America's Resurgence: Some Historical Perspectives," IMF Working Papers 2006/252, International Monetary Fund.
    12. Lundström, Susanna, 2003. "Effects of Economic Freedom on Growth and the Environment - Implications for Cross-Country Analysis," Working Papers in Economics 115, University of Gothenburg, Department of Economics.
    13. Christian Volpe Martincus & Antoni Estevadeordal, 2009. "Trade policy and specialization in developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(2), pages 251-275, July.

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