Araujo, Jorge ThompsonBrueckner, MarkusClavijo, MateoVostroknutova, EkaterinaWacker, Konstantin M.2015-01-212015-01-212014-12https://hdl.handle.net/10986/21318The 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.en-USCC BY 3.0 IGOABSOLUTE VALUEACCOUNTABILITYACTUAL GROWTHADVERSE EFFECTSAGGREGATE PRODUCTION FUNCTIONAGGREGATE SUPPLYAGGREGATE SUPPLY CURVEANNUAL GROWTHAVERAGE GROWTHAVERAGE GROWTH RATESAVERAGE INCOMEAVERAGE INCOME GROWTHBANKING CRISISBENCHMARKINGBENCHMARKSBUREAUCRACYCAPITA INCOME GROWTHCAPITAL ACCUMULATIONCAPITAL FORMATIONCAPITAL STOCKCITIZENSCOMPETITIVENESSCOMPLEMENTARITIESCORRELATION COEFFICIENTCORRELATION COEFFICIENTSCORRUPTIONCOUNTRY LEVELCOUNTRY REGRESSIONSCREDIT CONSTRAINTSCRISESCURRENCY APPRECIATIONCYCLICAL REVERSIONDEPENDENT VARIABLEDESCRIPTIVE STATISTICSDETERMINANTS OF GROWTHDEVELOPING COUNTRIESDOMESTIC CONSUMPTIONDOMESTIC CREDIT/GDPDOMESTIC DEMANDDYNAMIC MODELDYNAMIC PANELECONOMETRICSECONOMIC DEPRESSIONECONOMIC DOWNTURNSECONOMIC GROWTHECONOMIC GROWTH RATEECONOMIC THEORYECONOMICSEDUCATIONAL ATTAINMENTELASTICITYEMPIRICAL GROWTH LITERATUREEMPIRICAL MODELEMPIRICAL STUDIESENDOGENOUS VARIABLESERROR TERMESTIMATED COEFFICIENTESTIMATED COEFFICIENTSEXCHANGE RATE MISALIGNMENTEXPLANATORY VARIABLESEXPORTSEXTERNAL CONDITIONSEXTERNAL FACTORSEXTERNAL SHOCKSFACTOR ACCUMULATIONFINANCIAL CONDITIONSFINANCIAL CRISISFINANCIAL DEVELOPMENTFISCAL POLICYFIXED EFFECTSFLUCTUATIONSFORECASTSGDP PER CAPITAGOVERNANCE INDICATORSGOVERNMENT CONSUMPTIONGOVERNMENT EFFECTIVENESSGROWTH ACCOUNTINGGROWTH DETERMINANTSGROWTH EFFECTGROWTH EFFECTSGROWTH EPISODEGROWTH MEANGROWTH PERFORMANCEGROWTH RATEGROWTH RATESGROWTH REGRESSIONSGROWTH VOLATILITYHIGH GROWTHHIGH INCOMEHIGH INFLATIONHIGH TAXESHOUSEHOLD SURVEYSHUMAN CAPITALHUMAN CAPITAL DEVELOPMENTIMPROVING GOVERNANCEINCOME GROWTHINCOME LEVELINCOME LEVELSINCOME PER CAPITAINCREASE IN LABORINFLATION LEVELSINFLATION RATEINFLATION RATESINFLATIONARY PRESSURESINSTITUTIONAL ENVIRONMENTINSTITUTIONAL FRAMEWORKINSTITUTIONAL PERFORMANCEINSTITUTIONAL QUALITYINSTITUTIONAL REFORMINSTITUTIONAL REFORMSINSTRUMENTAL VARIABLESINTERACTION TERMINTEREST RATESLABOR FORCELABOR INPUTLAGGED CHANGESLAGGED DEPENDENTLAGGED GROWTHLAGGED LEVELSLEVEL OF INCOMELIQUIDITYLIVING STANDARDSLONG RUNLONG-TERM GROWTHLOW INFLATIONMACROECONOMIC CONDITIONSMACROECONOMIC ENVIRONMENTMACROECONOMIC POLICIESMACROECONOMIC STABILITYMACROECONOMIC STABILIZATIONMACROECONOMIC VOLATILITYMACROECONOMICSMARKET ECONOMIESMEASUREMENT ERRORMONETARY POLICYNEGATIVE IMPACTNEGATIVE IMPACT ON GROWTHNEOCLASSICAL GROWTH MODELNEOCLASSICAL GROWTH MODELSNEOCLASSICAL GROWTH THEORYNET EXPORTSOUTPUT PER CAPITAPER CAPITA GROWTHPER CAPITA INCOMEPOLICY AREASPOLICY DEBATEPOLICY REFORMSPOLICY VARIABLESPOLITICAL INSTITUTIONSPOLITICAL STABILITYPOOR COUNTRIESPOOR GROWTHPOTENTIAL OUTPUTPOVERTY REDUCTIONPRICE LEVELSPRIMARY SCHOOLPRIVATE DOMESTICPRO-POORPUBLIC FINANCESPUBLIC INFRASTRUCTUREPUBLIC SPENDINGREAL EXCHANGE RATEREAL GDPREDUCING POVERTYREGRESSION MODELREGULATORY QUALITYRICH COUNTRIESSAFETY NETSSERIAL CORRELATIONSIGNIFICANT EFFECTSIGNIFICANT IMPACTSOCIAL VARIABLESSTABILIZATION POLICIESSTABILIZATION POLICYSTAGNATIONSTANDARD DEVIATIONSTANDARD ERRORSSTRUCTURAL POLICIESTECHNOLOGICAL PROGRESSTELECOMMUNICATIONSTELEPHONE LINESTELEPHONESTRADABLE SECTORSTRADE OPENNESSTRADE VOLUME/GDPWEALTH10.1596/21318