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The Center and the Periphery: The Transmission of the Crisis to Latin American Economies

Author

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  • Sebastián Katz

    (BCRA, UBA, San Andrés)

Abstract

Although the international crisis was initially seen as an event limited to a particular segment of the financial systems of central economies, it rapidly escalated and became global through different transmission channels, raising doubts over the hypothesis of the so-called decoupling. Latin American economies faced this new scenario under more robust conditions than in the past episodes of crisis. The good macroeconomic performance of the region during the five-year period prior to the onset of the crisis reduced the vulnerability of these economies and increased the degrees of freedom of economic policy authorities to implement counter-cyclical policies in the new international context. Despite the efforts made by these economies, a comprehensive policy response will require a commitment of resources and coordination by the main developed economies. In this sense, policy challenges are not limited to emerging economies: they imply a global coordination effort.

Suggested Citation

  • Sebastián Katz, 2009. "The Center and the Periphery: The Transmission of the Crisis to Latin American Economies," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(53-54), pages 117-166, January -.
  • Handle: RePEc:bcr:ensayo:v:1:y:2009:i:53-54:p:117-166
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    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/53-54-6-Katz.pdf
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    References listed on IDEAS

    as
    1. Peter Temin, 1991. "Lessons from the Great Depression," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262700441, January.
    2. repec:fip:fedgsq:y:2009:x:6 is not listed on IDEAS
    3. Christopher W. Crowe & Jonathan David Ostry & Jun I Kim & Marcos Chamon & Atish R. Ghosh, 2009. "Coping with the Crisis; Policy Options for Emerging Market Countries," IMF Staff Position Notes 2009/08, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    center and periphery; counter-cyclical policies; emerging economies; international crisis; Latin America; transmission mechanisms;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • G01 - Financial Economics - - General - - - Financial Crises

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