Ffrench-Davis, Ricardo2017-08-142017-08-142009https://hdl.handle.net/10986/27757Latin America faces the twin challenges of achieving economic growth and reducing extreme inequality. Notwithstanding the heterogeneity among Latin American countries (LACs), most of them exhibit both: (i) low average Gross Domestic Product (GDP) growth; and (ii) increased inequality during the 1980s. This long period includes the 'lost decade,' when outcomes in both variables were evidently negative. These negative trends have persisted since the early 1990s, in the period of intense reforms under the Washington consensus. The development gap (difference in GDP per capita or per worker between rich countries and LACs) and the equity gap have broadened in this period. The report evaluate: (a) the macroeconomic environment in which agents make their decisions (usually in LACs, under an economic activity operating significantly below potential GDP, with outlier macro-prices, and fluctuating aggregate demand); (b) features of financial reforms (usually intensive in short-term segments and weak financing of risk and long-term financing), and their implications for capital formation and the distribution of opportunities in the domestic economy; (c) features of trade reforms (intensive in resource-based exports but low total output of tradable); and (d) the distribution of productivities, which is closely linked to the narrow space granted for the development of small and medium enterprises (SMEs).en-USCC BY 3.0 IGOACCESS TO CAPITALACCESS TO CAPITAL MARKETSACCESS TO FINANCINGADVERSE SELECTIONAGGREGATE DEMANDARBITRAGEBALANCE OF PAYMENTSBANK LENDINGBANKING CRISESBANKRUPTCIESBONDBOND FINANCINGBUSINESS CYCLEBUSINESS CYCLESCAPITAL ACCOUNTCAPITAL ACCOUNT LIBERALIZATIONCAPITAL ACCOUNTSCAPITAL FLIGHTCAPITAL FLOWSCAPITAL GAINSCAPITAL GROWTHCAPITAL INFLOWSCAPITAL MARKETCAPITAL MARKETSCAPITAL MOVEMENTSCENTRAL BANKCENTRAL BANKSCLOSED ECONOMYCOMMODITIESCOMPARATIVE ADVANTAGESCOMPARATIVE ANALYSISCOMPETITIVENESSCONSUMERSCREDIT FACILITIESCRISIS CONTAGIONCURRENCYCURRENT ACCOUNT DEFICITDEBTDEBT CRISESDEBT CRISISDEFICITSDEMOCRACYDEREGULATIONDERIVATIVESDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPING ECONOMYDEVELOPMENT POLICYDEVELOPMENT STRATEGYDISTRIBUTION OF INCOMEDIVERSIFIED MARKETSDOMESTIC CAPITALDOMESTIC CAPITAL MARKETSDOMESTIC ECONOMYDOMESTIC FINANCIAL MARKETDOMESTIC FINANCIAL MARKETSDOMESTIC MARKETSECONOMIC ACTIVITYECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OUTCOMESECONOMIC PERFORMANCEECONOMIC REFORMECONOMIC REFORMSECONOMIC RENTSELASTICITYEMERGING ECONOMIESEQUIPMENTEXCHANGE RATEEXCHANGE RATE INSTABILITYEXCHANGE RATE REGIMEEXCHANGE RATESEXPENDITUREEXPORT GROWTHEXPORTERSEXPORTSEXTERNAL DEFICITSEXTERNALITIESFINANCIAL ASSETSFINANCIAL CAPITALFINANCIAL CRISESFINANCIAL CRISISFINANCIAL FLOWSFINANCIAL INSTITUTIONSFINANCIAL LIBERALIZATIONFINANCIAL REFORMSFINANCIAL SAVINGSFINANCIAL SECTORSFINANCIAL SYSTEMFINANCIAL SYSTEMSFISCAL DEFICITFISCAL DEFICITSFISCAL DISCIPLINEFISCAL POLICIESFISCAL POLICYFIXED CAPITALFIXED EXCHANGE RATEFLOATING EXCHANGE RATEFLOW OF INFORMATIONFOREIGN CURRENCYFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETFREE TRADEFREE TRADE AGREEMENTSFULL EMPLOYMENTFUTURE PROSPECTSGDPGDP PER CAPITAGLOBAL ECONOMYGLOBAL MARKETSGLOBALIZATIONGOVERNMENT INTERVENTIONSGROSS FIXED CAPITAL FORMATIONGROWTH RATESHUMAN CAPITALINCOMEINCOME LEVELSINCOMPLETE MARKETSINDUSTRIALIZATIONINFLATIONINFLATION RATEINFLATION RATESINSTRUMENTINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL FINANCIAL MARKETSINTERNATIONAL RESERVESJUDICIAL SYSTEMLABOR MARKETLABOR MARKETSLENDERSLIBERALIZATION OF TRADELIQUIDITYLIQUIDITY CONSTRAINTSLOCAL CURRENCIESLOCAL GOVERNMENTSLONG-TERM CAPITALMACROECONOMIC BALANCEMACROECONOMIC ENVIRONMENTMACROECONOMIC INSTABILITYMACROECONOMIC MANAGEMENTMACROECONOMIC POLICIESMACROECONOMIC POLICYMACROECONOMIC STABILITYMACROECONOMICSMARKET ECONOMYMARKET SEGMENTATIONMATURITYMEDIUM OF EXCHANGEMERGERSMICROFINANCEMONETARY POLICIESMONEY LAUNDERINGMORAL HAZARDNATIONAL ECONOMYNATIONAL SAVINGSNATURAL RESOURCESNET DEBTNET EXPORTSOPEN ECONOMIESOPEN ECONOMYOPTIMIZATIONOUTPUT GAPOVERVALUATIONPORTFOLIOPRIVATE INVESTMENTPRIVATIZATIONPRIVATIZATIONSPRODUCTION FUNCTIONPRODUCTIVE INVESTMENTPRODUCTIVITY GROWTHPROTECTIONISMPRUDENTIAL REGULATIONPRUDENTIAL REGULATIONSPRUDENTIAL SUPERVISIONPUBLIC BUDGETSPUBLIC DEFICITSPUBLIC INVESTMENTREAL ESTATEREAL EXCHANGE RATEREAL EXCHANGE RATESREAL INTERESTREAL INTEREST RATEREAL INTEREST RATESRESERVESRETURNRETURNSSAVINGSSAVINGS RATIOSSMALL BUSINESSESSOCIAL INVESTMENTSPECULATIVE BUBBLESSTOCK MARKETSTAXTAX EXEMPTIONSTOTAL FACTOR PRODUCTIVITYTOTAL OUTPUTTRADE LIBERALIZATIONTRADE POLICYTRADE REFORMSTRADE REGIMESTRANSPARENCYTREASURYUNEMPLOYMENTVOLATILITYWAGESWORLD DEVELOPMENT INDICATORSWORLD TRADEWorking PaperWorld Bank10.1596/27757