Chapter 2: Economic Growth in Latin America in the Late Twentieth Century: Evidence and Interpretation
* Andrés Solimano and Raimundo Soto 2.1 INTRODUCTION Economic growth in Latin America in the last 30 years or so has been, on average, modest (in per capita terms) and volatile. This period has witnessed cycles of prosperity, stagnation, and negative growth. The last third of the twentieth century was also characterized by shifting patterns of capital ﬂows, recurrent terms of trade shocks, substantial economic reforms and a rapidly changing global economy. In this context understanding economic growth as a smooth process around a secular trend is a departure far from reality. On the contrary, the growth process of Latin America in this period is better characterized by a complex interaction of shifting growth trends, alternating with complex cycles of variable intensity and duration. Besides, at a national level, a wide variety of growth stories are detected. It is not uncommon to ﬁnd in the last 30–40 years, several episodes of prosperity lasting for a decade followed by protracted stagnation or outright growth collapse in several countries of the region. The growth regimes of recent decades have in the background the large shocks of the 1970s, 1980s and 1990s and the early twenty-ﬁrst century. In the 1970s, the region was able to recover from the global shocks of the 1970s (the collapse of Bretton Woods exchange rate parities and the two oil price shocks) through abundant and cheap external borrowing that proved to be temporary; then came the debt crises of the 1980s followed by a period of...
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