IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Economic Policy out of the Corridor. Reflections on the Global Crisis and the Latin American Experience

  • José María Fanelli

    (CEDES)

Registered author(s):

    These notes examine the international crisis by analyzing it through Latin American lenses. The exercise consists in interpreting some key facts of the current global crisis in the light of what we know about volatility, crisis and stabilization policies in Latin America. The exercise has an exploratory purpose and focuses on the aspects of the crisis having analogies with facts that were previously observed in the region. To this effect, a set of stylized facts about volatility, crisis and collapses in Latin America is presented, together with an analysis of the concept of “crisis” understood as the interaction between volatile stochastic processes and governance structures. Finally, the analysis includes the consequences for the macroeconomic stabilization policies in developed countries when the economy is out of the stability corridor, as it seems to be the case right now. An important conclusion is that, out of the corridor, the demands for macroeconomic policy may be qualitatively different, as suggested by the Latin American experience. This is a region where, due to the frequency of crises, some problems are likely to show up, such as: public debt sustainability, uncertainty about the effect of fiscal stimulus, lack of coordination among policies and rules changes.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/53-54-4-Fanelli.pdf
    Download Restriction: no

    Article provided by Central Bank of Argentina, Economic Research Department in its journal Ensayos Económicos.

    Volume (Year): 1 (2009)
    Issue (Month): 53-54 (January - June)
    Pages: 73-105

    as
    in new window

    Handle: RePEc:bcr:ensayo:v:1:y:2009:i:53-54:p:73-105
    Contact details of provider: Postal:
    Reconquista 266 - C1003ABF - Buenos Aires

    Phone: (54-11) 4348-3582
    Fax: (54-11) 4348-3794
    Web page: http://www.bcra.gov.ar
    Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Robert C. Merton & Zvi Bodie, 2004. "The Design of Financial Systems: Towards a Synthesis of Function and Structure," NBER Working Papers 10620, National Bureau of Economic Research, Inc.
    2. Sebastian Edwards, 2007. "Crises and Growth: A Latin American Perspective," NBER Working Papers 13019, National Bureau of Economic Research, Inc.
    3. Alejandro Izquierdo & Ernesto Talvi & Guillermo A Calvo, 2006. "Phoenix miracles in emerging markets: recovering without credit from systemic financial crises," BIS Working Papers 221, Bank for International Settlements.
    4. Graciela L. Kaminsky & Carmen M. Reinhart, 1996. "The twin crises: the causes of banking and balance-of-payments problems," International Finance Discussion Papers 544, Board of Governors of the Federal Reserve System (U.S.).
    5. Ugo Panizza & Dany Jaimovich, 2007. "Procyclicality or Reverse Causality?," Research Department Publications 4508, Inter-American Development Bank, Research Department.
    6. Ratna Sahay & Rishi Goyal, 2006. "Volatility and Growth in Latin America; An Episodic Approach," IMF Working Papers 06/287, International Monetary Fund.
    7. Arthur T. Denzau & Douglass C. North, 1993. "Shared Mental Models: Ideologies and Institutions," Economic History 9309003, EconWPA.
    8. Olivier Blanchard, 2005. "European Unemployment: The Evolution of Facts and Ideas," NBER Working Papers 11750, National Bureau of Economic Research, Inc.
    9. Susanto Basu & Alan M. Taylor, 1999. "Business Cycles in International Historical Perspective," NBER Working Papers 7090, National Bureau of Economic Research, Inc.
    10. N/A, 2009. "On the Recession," Local Economy, London South Bank University, vol. 24(3), pages 253-253, May.
    11. Alan Auerbach, 2002. "Is There a Role for Discretionary Fiscal Policy?," NBER Working Papers 9306, National Bureau of Economic Research, Inc.
    12. John Y. Campbell, 2001. "Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk," Journal of Finance, American Finance Association, vol. 56(1), pages 1-43, 02.
    13. Olivier Blanchard, 2004. "Fiscal Dominance and Inflation Targeting: Lessons from Brazil," NBER Working Papers 10389, National Bureau of Economic Research, Inc.
    14. Edwards, Sebastian, 2007. "Crises and Growth: A Latin American Perspective," Revista de Historia Económica, Cambridge University Press, vol. 25(01), pages 19-51, January.
    15. Antonio Spilimbergo & Steven A. Symansky & Carlo Cottarelli & Olivier J Blanchard, 2009. "Fiscal Policy for the Crisis," IMF Staff Position Notes 2008/01, International Monetary Fund.
      • Antonio Spilimbergo & Steve Symansky & Olivier Blanchard & Carlo Cottarelli, 2009. "Fiscal Policy For The Crisis," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(2), pages 26-32, 07.
    16. Reinhart, Carmen & Kaminsky, Graciela & Vegh, Carlos, 2004. "When it rains, it pours: Procyclical capital flows and macroeconomic policies," MPRA Paper 13883, University Library of Munich, Germany.
    17. Hnatkovska, Viktoria & Loayza, Norman, 2004. "Volatility and growth," Policy Research Working Paper Series 3184, The World Bank.
    18. Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bcr:ensayo:v:1:y:2009:i:53-54:p:73-105. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Federico Grillo)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.