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Preliminary overview of the Latin American economy during 1983
About: This article is published in Research Papers in Economics.The article was published on 1983-12-20 and is currently open access. It has received 6 citations till now. The article focuses on the topics: Latin Americans.
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09 Oct 1998
TL;DR: In this paper, the authors investigate analytically and empirically how Latin American countries have allocated massive foreign capital inflows of the 1990s into consumption and investment, and identify the macroeconomic and institutional prerequisites necessary to turn foreign savings into productive long-term investment, strengthen the complementarity of domestic and foreign savings and achieve sustainable macroeconomic balance.
Abstract: This book reports the findings of a joint research project of the OECD Development Centre and the UN Economic Commission for Latin America and the Caribbean (ECLAC). The research aimed to investigate analytically and empirically how Latin American countries have allocated massive foreign capital inflows of the 1990s into consumption and investment, and to identify the macroeconomic and institutional prerequisites necessary to turn foreign savings into productive long–term investment, strengthen the complementarity of domestic and foreign savings and achieve sustainable macroeconomic balance. The research shows that the effects generated by capital inflows vary with the domestic policies adopted. A comprehensive, active policy has proven effective in influencing the composition of capital inflows, their volume and spread across time and their allocation into productive investment, while avoiding excessive outlier exchange–rate appreciation and lending booms. Chile and Colombia illustrate the effective role played by policy. Latin America offers good prospects for foreign investors, provided the region improves the quality of its absorptive capacity. The self–interest of investors and the well–being of recipient countries would be better served if the volume and composition of flows were absorbed by domestic economies in more efficient and sustainable ways. The papers collected in this volume provide useful insights for understanding past events and for improving policy design. × I
28 citations
TL;DR: The external dependence inherited by the Sandinista Revolution stems from the following: (1) a primary product export sector that was heavily focused on the United States and constituted the principal source of what little dynamism the economy showed in the prerevolutionary era; (2) a pattern of financing the government deficit through foreign borrowing; (3) heavy reliance on foreign borrowing within the national banking system ; and (4) a chronic imbalance in trade relations that required continual compensating capital flows and/or foreign borrowing as discussed by the authors.
Abstract: The external dependence inherited by the Sandinista Revolution stems from the following: (1) a primary product export sector that was heavily focused on the United States and constituted the principal source of what little dynamism the economy showed in the prerevolutionary era; (2) a pattern of financing the government deficit through foreign borrowing; (3) heavy reliance on foreign borrowing within the national banking system ; and (4) a chronic imbalance in trade relations that required continual compensating capital flows and/or foreign borrowing. The financial condition of the nation in July 1979 left the Sandinista government with a large external debt and without any foreign exchange cushion that might have relieved its external obligations and needs. The Sandinista government has been forced to rely on large quantities of foreign economic assistance, not only because of these dimensions of the inherited economy but also because the worldwide prices of Nicaragua’s principal export products have fallen drastically since 1979. The export sector has proven to be the Achilles heel of the Nicaraguan economy since the 1979 revolution. It was the core of the prerevolutionary model of export-led growth, which was characterized by the Economic Commission for Latin America (ECLA) as the &dquo;superimposed development&dquo; underlying the present social and economic crisis in Central America (ECLA, 1983). And it has constituted the principal focus for accumulation of surplus in early planning efforts since the revolution (Fitzgerald, 1982; and Irvin, 1983). Nicaragua’s external dependence has provided opponents of the revolution with their greatest element of economic leverage. Actions by the
13 citations
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4 citations
01 Jan 1988
TL;DR: The relationship between foreign investment and unilateral transfers is a multifaceted one as mentioned in this paper, and it is necessary to analyse this relationship because it is one of the most important and least examined relationships determining long-term economic development in Latin America.
Abstract: The relationship between foreign investment and unilateral transfers is a multifaceted one. It is necessary to analyse this relationship because it is one of the most important and least examined relationships determining long-term economic development in Latin America.1 Unilateral resource transfers are a pernicious disease afflicting major segments of the society, economy and political system of the majority of Latin American countries. The pervasive presence of unilateral transfers in developing countries is a critical factor that separates them from the present day developed countries during their corresponding early stages of growth. While the discussion of capital and interest rates formed the foundation of classical economic thinking, it is the origin, size, and distribution of unilateral transfers that implicitly form the, or at least a, major foundation of modern development thinking.
3 citations