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Beyond commodities : the growth challenge of Latin America and the Caribbean (English)

The Latin America and Caribbean (LAC) region has seen a decade of remarkable growth and income convergence. Growth has been a key driver for reducing poverty and boosting shared prosperity. It has been debated how much of this decade of growth has been driven by policy reforms and how much was due to the favorable external conditions. While external factors were supportive and relevant, the effect of domestic policies was just as relevant for explaining LAC's recent growth performance. The emphasis of domestic policy has shifted from stabilization policies to structural policies. In addition, a benchmarking exercise reveals which policy gaps will lead to the highest potential growth-payoffs for each country and helps identify potential trade-offs. The authors analyze growth in LAC using descriptive statistics and growth econometrics. The authors use these results for explaining the pattern of growth in LAC over the last decade, for looking ahead, and to identify potential policy gaps.

Details

  • Author

    Araujo,Jorge A. De Thompson R., Brueckner, Markus, Clavijo Munoz,Mateo, Vostroknutova,Ekaterina, Wacker,Konstantin M.

  • Document Date

    2014/12/01

  • Document Type

    General Economy, Macroeconomics and Growth Study

  • Report Number

    91015

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Latin America,

  • Region

    Latin America & Caribbean,

  • Disclosure Date

    2015/04/13

  • Disclosure Status

    Disclosed

  • Doc Name

    Beyond commodities : the growth challenge of Latin America and the Caribbean

  • Keywords

    Drivers of Economic Growth;labor force participation rate;external condition;negative impact on growth;terms of trade improvement;terms of trade growth;secondary school enrolment;impact of policy reforms;composition of public spending;Analysis of Economic Growth;efficient allocation of resource;determinants of economic growth;determinants of growth;Stabilization policies;gdp growth rate;neoclassical growth model;list of countries;country fixed effect;exchange rate misalignment;commodity price boom;high growth rate;global financial crisis;increase in labor;aggregate supply curve;commodity price index;private domestic credit;improvement in productivity;difference in income;poor growth performance;aggregate production function;short time horizon;neoclassical growth theory;Junior Professional Associate;commodity price level;economic growth rate;physical capital accumulation;engine of growth;access to finance;method of moments;human capital development;average income level;Social Safety Nets;international commodity price;net commodity importers;method of estimation;dynamic panel data;explanatory variable;lagged dependent;empirical model;external factor;baseline model;commodity exporter;benchmarking exercise;commodity boom;standard deviation;domestic policies;predicted change;real gdp;efficiency gap;macroeconomic framework;income gap;income growth;net export;average change;steady state;income convergence;endogenous variable;correlation coefficient;household survey;natural log;empirical analysis;fitted value;economic relationship;horizontal axis;baseline regression;advanced economy;international liquidity;Macroeconomic Stability;demographic challenge;external financing;econometric approach;inflation rate;government consumption;predicted growth;expenditure component;standard error;domestic factor;exogenous factor;policy priority;macroeconomic environment;high tax;borrowing cost;government burden;alternative specification;macroeconomic condition;regression model;eradicating poverty;aggregate data;observed change;external environment;unbalanced panel;lagged change;lagged level;tourist arrival;technological progress;public bureaucracy;relative magnitude;domestic innovation;empirical findings;human welfare;observed growth;global effects;incremental improvement;empirical estimation;individual effect;conditional effect;factor accumulation;descriptive statistic;robustness check;female participation;supply side;domestic demand;negative correlation;econometric result;empirical study;income effect;summary statistic;capital stock;financial contract;domestic consumption;statistical significance;lagged growth;individual variable;higher growth;cyclical reversion;potential output;transition period;small country;previous one;education attainment;low-income household;advanced country;composite index;governance index;primary commodity;virtuous cycle;historical perspective;simple regression;macroeconomic stabilization;economic depression;standard economic;estimation methodology;employment creation;model prediction;positive relationship;alternative measure;stabilization measure;dispersion measure;price effect;absolute income;positive impact;institutional framework;high inflation;banking crisis;institutional stability;infrastructure service;high commodity;previous work;Boosting Growth;inflationary pressure;downward bias;institutional improvement;social return;current income;cross-country regression;institutional environment;instrumental variable;social variable;parameter estimate;dynamic model;empirical method;policy variable;commodity revenue;working-age population;dependency ratio;labor input;high acceleration;demographic development;capital gap;credit constraint;monetary policy;cyclical factor;allocative efficiency;capital structure;capital formation;

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Citation

Araujo,Jorge A. De Thompson R. Brueckner, Markus Clavijo Munoz,Mateo Vostroknutova,Ekaterina Wacker,Konstantin M.

Beyond commodities : the growth challenge of Latin America and the Caribbean (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/108541468278336857/Beyond-commodities-the-growth-challenge-of-Latin-America-and-the-Caribbean