Canuto, Otaviano

Person:
Canuto, Otaviano

Poverty Reduction and Economic Management, World Bank

Fields of Specialization

Growth and Poverty, Debt, Trade, Gender, Public Sector Management and Governance, Macro Prudential and Monetary Policies

External Links

Growth and Crisis blog
EconoMonitor
Project Syndicate
VoxEU
Huffington Post

Departments

Poverty Reduction and Economic Management, World Bank

Last updated: February 1, 2023

Biography

Otaviano Canuto is Vice President and Head of the Poverty Reduction and Economic Management (PREM) Network, a division of more than 700 economists and public sector specialists working on economic policy advice, technical assistance, and lending for reducing poverty in the World Bank’s client countries. He took up his position in May 2009, after serving as the Vice President for Countries at the Inter-American Development Bank since June 2007. Dr. Canuto provides strategic leadership and direction on economic policy formulation in the area of growth and poverty, debt, trade, gender, and public sector management and governance. He is involved in managing the Bank’s overall interactions with key partner institutions including the IMF and others. He has lectured and written widely on economic growth, financial crisis management, and regional development, with recent work on financial crisis and economic growth in Latin America. He speaks Portuguese, English, French and Spanish.

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Publication Search Results

Now showing 1 - 10 of 37

Access to Finance, Product Innovation and Middle-Income Traps
(Elsevier, 2017-06) Agénor, Pierre-Richard; Canuto, Otaviano
Interactions between access to finance, product innovation, and labor supply are studied in a two-period overlapping generations model with an endogenous skill distribution and financial market imperfections. In the model lack of access to finance (induced by high monitoring costs) has an adverse effect on innovation activity not only directly but also indirectly, because too few individuals may choose to invest in skills. If monitoring costs fall with the number of successful projects, multiple steady states may emerge, one of which defined as a middle-income trap, characterized by low wages in the design sector, a low share of the labor force engaged in innovation activity, and low growth. A sufficiently ambitious policy aimed at alleviating constraints on access to finance by innovators may allow a country to move away from such a trap by promoting the production of ideas and improving incentives to invest in skills.
The Impacts of Trade Facilitation Measures on International Trade Flows
(World Bank, Washington, DC, 2015-07) de Sá Porto, Paulo C.; Canuto, Otaviano; Morini, Cristiano
This paper analyzes the impacts of selected trade facilitation measures on international trade flows. A gravity model is used to estimate four equations: a pooled cross-section model; a fixed-effects model; a random effects model; and a Poisson maximum likelihood estimator. The contribution of the paper is twofold. First, the analysis uses a recent data set, a panel that includes trade data from 2011 and 2012 for 72 countries. Second, to measure the impacts of trade facilitation measures, the analysis includes dummy variables for the presence of an authorized economic operator program, the existence of a single-window program in the countries in the sample, and the existence of a mutual recognition arrangement between pairs of countries in the sample. The results show that the presence of an authorized economic operator program and the existence of a single-window program will improve countries’ trade performance. By contrast, the existence of a mutual recognition arrangement will not necessarily improve countries’ trade performance. These results suggest that, in general, trade facilitation measures as a whole will help countries improve their trade performance.
Currency Wars Yesterday and Today
(World Bank, Washington, DC, 2010-12) Brahmbhatt, Milan; Canuto, Otaviano; Ghosh, Swati
An energetic debate on the danger of a global currency war has flared up in recent months, stoked by a renewed move to 'quantitative easing' in the United States, resurgent capital flows to developing countries and strong upward pressure on emerging market currencies. This economic premise views some of the arguments and concludes that the current United States monetary easing is a useful insurance policy against the risk of global deflation. But it is increasing pressure on developing countries to move toward greater monetary policy autonomy and exchange rate flexibility, as well as to undertake the institutional and structural policies needed to underpin such flexibility. Such reforms will take time.
Dealing with Dutch Disease
(World Bank, Washington, DC, 2010-06) Brahmbhatt, Milan; Canuto, Otaviano; Vostroknutova, Ekaterina
This note looks at so-called Dutch disease, a phenomenon reflecting changes in the structure of production in the wake of a favorable shock (such as a large natural resource discovery, a rise in the international price of an exportable commodity, or the presence of sustained aid or capital inflows). Where the natural resources discovered are oil or minerals, a contraction or stagnation of manufacturing and agriculture could accompany the positive effects of the shock, according to the theory. The note considers channels through which such natural resource wealth can affect the economy. It also focuses on the development implications of Dutch disease, particularly the potential negative effects related to productivity dynamics and volatility; and concludes with a summary of possible policy responses, including the mix of fiscal, exchange rate, and structural reform policies.
The Curious Case of Brazil's Closedness to Trade
(World Bank, Washington, DC, 2015-04) Fleischhaker, Cornelius; Canuto, Otaviano; Schellekens, Philip
Although Brazil has become one of the largest economies in the world, it remains among the most closed economies as measured by the share of exports and imports in gross domestic product. This feature cannot be explained simply by the size of Brazils economy. Rather, it is due to an economic structure reliant on domestic value chain integration as opposed to participation in global production networking. It also reflects more generally an export base that shows lack of dynamism. Opening up and moving toward integration into global value chains could produce efficiency gains and help Brazil address its productivity and competitiveness challenges.
Ascent after Decline : Regrowing Global Economies after the Great Recession
(World Bank, 2012-01-09) Leipziger, Danny M.; Canuto, Otaviano
This volume combines the analyses of leading experts on the various elements affecting economic growth and the policies required to spur that growth. Ascent after Decline: Regrowing Global Economies after the Great Recession identifies the main challenges to the economic recovery, such as rising debt levels, reduced trade prospects, and global imbalances, as well as the obstacles to growth posed by fiscal conundrums and lagging infrastructure. It also examines the way forward, beginning with the role of the state and then covering labor markets, information technology, and innovation. The common thread throughout the book is the view that economic re-growth will depend in large measure on smart policy choices and that the role of government has never been more crucial than at any time since the great depression. As members of the World Bank community, these issues are of particular importance to us, since without a resurrection of strong economic growth in major economies, the likelihood of rapid economic development in poorer developing countries is dampened. This is troubling because we have seen progress in many parts of the globe in the past decade, including in Africa, and these gains will be arrested as long as the global economy is in disarray. Donors will withdraw, investment will retrench, and prospects will dim. This immiserizing welfare outcome is to be avoided. The volume is intended to shed light on those areas of policy that reduce the prospects of a prolonged period of stress and decline by 'regrowing growth.'
Dealing with the Challenges of Macro Financial Linkages in Emerging Markets
(Washington, DC: World Bank, 2013-10-11) Ghosh, Swati R.; Canuto, Otaviano; Canuto, Otaviano; Ghosh, Swati R.
The 2008 financial crisis has highlighted the challenges associated with global financial integration and emphasized the importance of macro financial linkages. In the financial sector, attention is being directed toward macro prudential regulations that are geared toward the stability of the financial system as a whole. The Third Basel Accord (Basel III) aims to dampen the pro-cyclicality of the financial sector and to reduce cross sectional systemic risks partly by introducing measures to address liquidity and issues of banks being too big to fail. In the macro arena, the facts that price stability was not sufficient to guarantee macroeconomic stability and that financial imbalances developed despite low inflation and small output gaps have highlighted the need for additional tools (macro prudential policies) to complement monetary policy in countercyclical management. Emerging markets face different conditions and have key structural features that can have a bearing on the relevance and efficacy of the measures. The chapters in this volume discuss the challenges of dealing with macro financial linkages and explore the policy toolkit available for dealing with systemic risks with particular reference to emerging markets. This report is organized as follows: chapter one is adapting macro prudential approaches to emerging and developing economies; chapter two is adapting micro prudential regulation for emerging markets; chapter three presents capital flow volatility and systemic risk in emerging markets: the policy toolkit; chapter four presents monetary policy and macro prudential regulation: whither emerging markets; chapter five deals with macro prudential policies to mitigate financial vulnerabilities in emerging markets; chapter six presents sailing through the global financial storm; and chapter seven presents operation of macro prudential policy measures.
Gender Equality and Economic Growth in Brazil : A Long-run Analysis
(World Bank, Washington, DC, 2013-01) Agénor, Pierre-Richard; Canuto, Otaviano
This paper studies the long-run impact of policies aimed at fostering gender equality on economic growth in Brazil. The first part provides a brief review of gender issues in the country. The second part presents a gender-based, three-period OLG model that accounts for women's time allocation between market work, child rearing, human capital accumulation, and home production. Bargaining between spouses depends on relative human capital stocks, and thus indirectly on access to infrastructure. The model is calibrated and various experiments are conducted, including investment in infrastructure, conditional cash transfers, a reduction in gender bias in the market place, and a composite pro-growth, pro-gender reform program. The analysis showed that fostering gender equality, which may partly depend on the externalities that infrastructure creates in terms of women's time allocation and bargaining power, may have a substantial impact on long-run growth in Brazil.
Brazilian Exports : Climbing Down a Competitiveness Cliff
(World Bank, Washington, D.C., 2013-01) Cavallari, Matheus; Canuto, Otaviano; Guilherme Reis, José
This note examines in detail Brazil s export performance over the past 15 years, focusing not only on growth and composition, but also on different performance dimensions, including diversification, sophistication, and firm dynamics. The analysis uses international comparisons to better situate the Brazilian performance, and explores different databases, including firm-level data recently published by the World Bank. The note uses a recent diagnostic toolkit developed by the World Bank in order to suggest some hypotheses about the factors that have been inhibiting exports and industrial production expansion. Among the latter, it is noted how service sectors, as the largest beneficiaries from favorable terms of trade, accommodated larger wage increases and "exported" cost pressures to other sectors of the economy. Furthermore, although a stronger currency can be appointed as one of the elements behind the lower competitiveness in Brazilian exports, sluggish productivity performance and a real wage uptrend explain a significant part of the overall loss of competitiveness. This diagnostic reinforces the importance of resuming the agenda of microeconomic reforms, increasing the investment-to-gross domestic product ratio, and advancing toward better-skilled human capital.
The Day After Tomorrow : A Handbook on the Future of Economic Policy in the Developing World
(World Bank, 2010) Canuto, Otaviano; Giugale, Marcelo
Development economists are paid to look into the future. They ask not only how things work today, but also how a new policy, program, or project will make them work tomorrow. They view the world and history as a learning process, past and present are just inputs into thinking about what's coming. It is that appetite for a vision of the future that led us to invite some 40 development economists, most of them from the World Bank's poverty reduction and economic management network, an epicenter of the profession, to tell us what they see on the horizon of their technical disciplines and of their geographic areas of specialization. The timing could not be better. The 2008-09 global financial crises shook the ground under the conventional wisdom that had been held as true for decades. From what the role of governments should be in markets to which countries will be the engines of the world's economy, from what people need to leave poverty to what businesses need to stay competitive, it is all up for reexamination. This synthesis provides an account of what the author heard. It is not meant to be comprehensive. Instead, it picks from each chapter what is new, what is likely to change, and what will be different in the future.