Latin American Macroeconomics Overview
Professor: Javier Garcia-Cicco

Lecture 1: • Outline of the course. • Some stylized facts about Latin America. • Pro-cyclicality • Terms of Trade and the curse of natural resources.

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Outline of the Course
• Lecture 1: Stylized facts about Latin America. The curse of natural resources

• Lecture 2: Fear of floating. Dollarisation. Sudden stops. Default risk.

• Lecture 3: Fiscal Policy and Fiscal Rules. Recent crisis in Latin America and their effect in the current policy framework.

• Lecture 4: Trade Integration in Latina America. The effect of and recovery from the 2008-09 crisis.

• Lecture 5: Some future prospects for Latin America. Exam.
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The last 20 years
LA Real GDP (Index 2005=100)
140 130 120 110 100 90 80 70 60 50 40 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Crisis

Tequila Crisis

Asian Crisis

Argentina

Argentina Crisis

Brazil Bolivia Chile Colombia Ecuador Paraguay Peru Venezuela Uruguay Mexico

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Some Historical Perspectives

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The last 20 years
LA CPI Inflation (Annual % Change)
140

120

Argentina
100

Brazil Bolivia Chile Colombia Ecuador Mexico Paraguay Peru Uruguay Venezuela

80

60

40

20

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -20

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Definitions about Exchange rate regimes and Monetary Policy Framework
• Conventional fixed peg arrangements: • The country pegs its currency within margins of ±1 percent or less visà-vis another currency. • Crawling pegs: • The currency is adjusted periodically in small amounts at a fixed rate or in response to changes in selective quantitative indicators. • Managed floating with no predetermined path for the exchange rate • The monetary authority attempts to influence the exchange rate without having a specific