The last decade was kind to much of Latin America. Growth
averaged 4% since 2003, nearly double that of the preceding two
decades. Crises were notable by their absence.
Parting shot: A moment in time
Latin economies must boost productivity growth if they are to avoid economic and political crises. Emerging Asia’s success is instructive. By Barry Eichengreen
Two developments explain this improved performance. First,
with a few notable exceptions, countries showed admirable
discipline in managing their fiscal and financial affairs.
Balanced budgets and current account surpluses became the order
of the day. The region reduced its external debt to GDP ratio
from over 60% to less than 30% between 2002 and 2009.
External debt denominated in someone else's currency became
less of a problem. The difference was not so much the greater
success of Latin countries in selling local currency debt to
foreign investors. The hoopla surrounding local-currency bond
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