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Macroeconomics for growth under financial globalization: four strategic issues for emerging economies

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  • Ffrench-Davis, Ricardo

Abstract

Latin America has exhibited contrasting features in its economic performance in the last decade and a half of market-based reforms. There has been good progress in achieving low inflation, improved fiscal balances, and high export growth. However, in parallel, low average GDP growth, low productive investment, and high volatility of economic activity associated with changes in capital flows are outstanding features of the performance of Latin American economies (LACs) since the early 1990s. Here we examine their relation to the sort of macroeconomic policies that were implemented. Success in achieving low inflation and moderate fiscal balances has not been accompanied by an effective demand close to potential GDP nor by interest and exchange rates providing sustain-able signals for efficient resource allocation. The macroeconomic environment, in general, has been providing an unfriendly framework and wrong macro-prices for productive development.
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  • Ffrench-Davis, Ricardo, 2006. "Macroeconomics for growth under financial globalization: four strategic issues for emerging economies," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1890.
    • Handle: RePEc:ecr:col014:1890
    Note: Includes bibliography
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    1. Maurice Obstfeld, 1998. "The Global Capital Market: Benefactor or Menace?," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 9-30, Fall.
    2. -, 2001. "Financial crises in "successful" emerging economies," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1699 edited by Brookings Institution Press.
    3. S Van der Berg, 2001. "Trends In Racial Fiscal Incidence In South Africa1," South African Journal of Economics, Economic Society of South Africa, vol. 69(2), pages 243-268, June.
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