The second Washington consensus and Latin America's quasi-stagnation
It took more than ten years for Latin America to overcome the debt crisis, which turned into a fiscal crisis of the state. Yet in the early 1990s, most of Latin America had undergone deep reforms (particularly trade liberalization and privatization), and, thanks to exchange rate devaluation and fiscal adjustment, they had reduced the foreign and the public debt. Yet growth was not resumed. The basic reason for that was the adoption of the growth cum foreign savings strategy coupled with financial opening (the "second" Washington Consensus). The huge capital inflows created serious solvency problems, as the foreign indebtedness threshold was exceeded. On the other hand, capital inflows appreciated the national currencies, artificially increasing wages and consumption, having as trade-offs the reduction of domestic savings and, again, the increase of foreign debt. Despite sizable direct investments, the total investment rate remained constant, as growth did not resume. Only the foreign financial and patrimonial debt increased.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 27 (2004)
Issue (Month): 2 (December)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348|
When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:27:y:2004:i:2:p:231-250. 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: (Chris Nguyen)The email address of this maintainer does not seem to be valid anymore. Please ask Chris Nguyen to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.