Booms and Busts in Latin America: The Role of External Factors
|
|
- Jessica Atkinson
- 5 years ago
- Views:
Transcription
1 Economic and Financial Linkages in the Western Hemisphere Seminar organized by the Western Hemisphere Department International Monetary Fund November 26, 2007 Booms and Busts in Latin America: The Role of External Factors Alejandro Izquierdo, Randall Romero, and Ernesto Talvi Presented at the Economic and Financial Linkages in the Western Hemisphere Seminar organized by the Western Hemisphere Department International Monetary Fund November 26, 2007 The views expressed in this presentation are those of the author(s) only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the paper.
2 Booms and Busts in Latin America: The Role of External Factors Alejandro Izquierdo Randall Romero Ernesto Talvi IADB IADB CERES Economic and Financial Linkages in the Western Hemisphere Seminar IMF, November 26, 2007
3 Outline I. Introduction and Motivation II. Estimation Strategy and Results III. Putting the Model to Work: Growth Performance and Global Financial Risks IV. Conclusions
4 Introduction and Motivation Back in the early 1990s capital flows started to flow back to Latin America after the drought of the 1980s Result: Booming asset markets, real exchange appreciation, booming investment and strong growth performance This phenomenon was largely attributed to the wave of fundamental reforms the region was undertaking In the midst of the euphoria, Calvo, Leiderman and Reinhart (1993) warned that capital was flowing despite wide differences in macro policies and performance across countries in the region
5 Introduction and Motivation Their take: External factors, particularly financial shocks in the center were affecting the periphery (an idea stressed by Diaz-Alejandro (1983, 1984)) Domestic reforms alone could not possibly explain the renewal of capital inflows to the region Their concern: What if external factors deteriorate just as easily as they had improved during the bonanza?
6 Gross Capital Flows and Economic Performance in Latin America: Dejá Vu all over Again? Gross Capital Flows (Billions of 2006 Dollars) LAC-7 GDP Variation*. (Annual Growth Rate) 8% 6% 4% 2% 0% -2% Average: 4.3% Average: 0.7% Average: 5.4% * LAC-7 includes Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela, which account for 93% of Latin America's GDP
7 Aims of the Paper Expand work in several directions: Rather than than focusing on capital flows and RER, we analyze the relevance of external factors directly on output performance We extend the menu of external factors to incorporate new developments in financial and commodity markets: A large international emerging bond market (correlation between EM bond spreads and the US T-bond rate was 0.7 by end-1994 but 0.4 by end- 2000) Sharp movements in terms of trade due to the incorporation of Asia to world markets
8 Aims of the Paper Use the empirical findings of this paper (which suggest that the region is still heavily exposed to external factors) to: Bring to the forefront the relevance of incorporating external factors in policy evaluation analysis of Latin America, i.e., in assessing the region s growth performance (counterfactual exercises) Highlight the need to filter out external factors when assessing the strength or weakness of economic fundamentals Assess the risks to the region posed by the possibility of an episode of global financial turmoil resulting in a large re-pricing of risk.
9 Outline I. Introduction and Motivation II. Estimation Strategy and Results III. Putting the Model to Work: Growth Performance and Global Financial Risks IV. Conclusions
10 Estimation Strategy Departure point: Vector Error Correction Model (VECM) : Δ yt = c + ' yt 1 + Δyt p 1Δyt p+ 1 αβ + ε where y t = ( gdp_lat t ip_x t tot_lat t financ_x t risk t ) t gdp_lat: (log of) Simple average of GDP indices of LAC7 countries ip_x: (log of) G7 industrial production index tot_lat: principal component weighted average of (the log of ) terms of trade indices of LAC 7 countries financ_x: Return on 10 year US T-bonds risk: High-Yield Bonds Spread
11 Estimation Strategy We restrict dynamics (error-correction adjustments coefficients and short-run coefficients) so that average LAC7 GDP does not have an impact on external variables: * α = α * j j 0 = 0 0 0,1,1 j,1,2 j,2,2 j,3,2 j,4,2 j,5,2 j,1,3 j,2,3 j,3,3 j,4,3 j,5,3 j,1,4 j,2,4 j,3,4 j,4,4 j,5,4 j,1,5 j,2,5 j,3,5 j,4,5 j,5,5 We use standard tests to obtain optimal lag length We identify one cointegrating relationship
12 Results: Key Characteristics of the Model Cointegrating vector: Terms of trade and G7 industrial production affect LAC 7 GDP positively, while T-bond rate and High-yield bond spread affect it negatively (coefficients significant at one percent level) Error-correction adjustment coefficient is negative (model is stable) and significant at the one percent level This parsimonious representation based on external variables explains 54 percent of the variance of LAC7 GDP growth
13 Results: LAC7 GDP Response to Impulses in External Variables
14 Results: Elasticities 1% increase in G7 Industrial Production 1% increase in TOT Largest Impact on Quarterly Growth 0.6% 0.11% Difference Between Shocked & Non-shocked GDP (after 20 periods) 2.2 points 0.74 points 100 bps increase in HY spread 100 bps increase in T-bond rate -0.36% -0.33% points points
15 Outline I. Introduction and Motivation II. Estimation Strategy and Results III. Putting the Model to Work: Growth Performance and Global Financial Risks IV. Conclusions
16 Growth Performance: GDP Forecasts Conditional on External Variables: Bonanza vs. Crisis Bonanza Crisis Passive scenario Average growth: 3.8% Actual average growth: 5.6% Passive scenario Average growth: 2.9% Actual average growth: 0.5% Differences in the dynamics of external factors can account for large and significant differences in average growth performance.
17 Latent Risks: Impact of Financial Turmoil on Growth Performance Sudden Stop á la Russia Sudden Stop cum TOT Deterioration Reduced form shock to HY spread in 1998:q3: 203bps (largest in sample) Highlights large and unexpected nature of SS In latest turmoil episodes, spread increases were accompanied by falls in commodity prices Likelihood of this event depends on impact of financial turmoil on global demand
18 Implications for GDP Levels GDP response in very much in line with recent evidence of fast bounceback to pre-crisis levels following a Sudden Stop (Calvo et al (2006), but no convergence to pre-crisis trends (Cerra and Saxena (2005) Given that fluctuations in external conditions strongly affect the path of output, the evaluation of macroeconomic fundamentals should account for cycles in external conditions Evolution of GDP Level Consistent with Impulse-Response (Sudden Stop cum Terms of Trade Shock)
19 Outline I. Introduction and Motivation II. Estimation Strategy and Results III. Putting the Model to Work: Growth Performance and Global Financial Risks IV. Conclusions
20 Message I Differences in the dynamics of external factors can account for large and significant differences in growth performance Care should be exercised when passing judgment on the success or failure of domestic macro policies and reforms, i.e., judgment should not be made in a vacuum, but rather, by factoring in external conditions before signaling thumbs up or down The region might be currently surfing on a wave of unjustified euphoria that is not necessarily a consequence of good policies, but the result of a string of good luck
21 Message II Given that external conditions strongly affect the path of output, actual levels of fundamentals such as the fiscal position, or the public debt could be completely misleading when the external environment is unusually favorable A proper assessment of structural fiscal balances and structural debt levels should account for cycles in external factors 1/ It is important to make the effort to incorporate these issues into the public debate and into performance indicators to avoid praising those lucky enough to ride the bonanza, and punish the unlucky, irrespective of their abilities 1/ See for example Izquierdo, Ottonello, and Talvi (forthcoming) If Latin America were Chile: A Comment on Structural Fiscal Balances and Public Debt
22 Message III Although we do not discuss this directly in the paper, it is crucial to distinguish between transitions that are a by-product of level effects and sustained growth The nature of the estimated model suggests that one time increases in commodity prices or reductions in interest rates spreads generate level effects on output, that may translate into relatively prolonged above-average growth phases given frictions implicitly captured by the error correction term However, these should not be interpreted as sustained growth
23 Booms and Busts in Latin America: The Role of External Factors Alejandro Izquierdo Randall Romero Ernesto Talvi IADB IADB CERES Economic and Financial Linkages in the Western Hemisphere Seminar IMF, November 26, 2007
24 Credit Ratings Agencies Verdict (LAC-9 excluding Ecuador, Standard & Poor s Credit Ratings) Numerical Transformation of Credit Ratings* 11,0 10,5 10,0 BB+ Russian Crisis Investment Grade Chile Colombia Uruguay Investment Grade Chile Colombia Mexico BB+ AAA 21 AA+ 20 AA 19 AA- 18 A+ 17 A 16 A- 15 BBB+ 14 Investment Grade 9,5 BBB 13 BBB- 12 BB+ 11 9,0 BB 10 BB- 9 B+ 8 8,5 B 7 B- 6 8,0 7,5 BB Investment Grade Chile Mexico CCC+ 5 CCC 4 CCC- 3 CC 2 SD 1 Dic-96 Dic-97 Dic-98 Dic-99 Dic-00 Dic-01 Dic-02 Dic-03 Dic-04 Dic-05 Dic-06 *A. Powell and J.F. Martinez, (2007), On Emerging Economy Spreads and Ratings (forthcoming)
25 Let Prices Talk: EMBI Spreads Reaction to Spikes in US High Yield Spreads Systemic Turmoil Period Relatively Tranquil Recent Period (US High Yield and Latin EMBI spreads, basis points) Latin EMBI (1) (2) (3) (4) Dating Δ US HY Δ LA EMBI Naïve Beta Spread Spread (3) / (2) 3-Aug to 19-Oct Sep to 15-Dec-00 7-Feb to 9-Apr May to 4-Oct May to 14-Oct Systemic Turmoil Period Average Apr to 17-May US High Yield 10-Mar to 18-May May to 27-Jun Feb to 7-Mar Jul to 16-Aug Recent Period Average 0.8
26 Let Prices Talk: EMBI Spreads Reaction to Spikes in US High Yield Spreads Systemic Turmoil Period Relatively Tranquil Recent Period Beta Coefficient (average beta per period, US high yield vs. Latin EMBI) 1600 (US High Yield and Latin EMBI spreads, basis points) Latin EMBI * US High Yield Systemic Turmoil Period Relatively Tranquil Recent Period *Adjusted using Forbes, Rigobon (1999) methodology
27 Great Moderation or the Calm Before the Storm? Moody s Baa Corporate Spread (basis points) Debt Crisis LTCM / Russian Crisis Avg Moody s Baa Corporate Spread Volatility (3 year moving standard deviation, in basis points) Avg
28 X-Ray of Recent Episodes of Global Financial Turbulence Latin America US High Yield EMBI EM Europe EM Asia BBB Corporate AAA Corporate US T-Bonds Europe T-Bonds Japan T-Bonds Bond Prices (bond price equivalent*, peak to trough variation) -3.5% -3.3% -3.1% -2.7% -2.6% -1.2% -0.5% Flight to Quality 0.4% 0.6% 1.0% -4% -3% -2% -1% 0% 1% 2% Latin America US High Yield EMBI EM Europe EM Asia BBB Corporate AAA Corporate US T-Bonds Europe T-Bonds Japan T-Bonds Commodity Prices (peak to trough variation) Credit Spreads (basis points, peak to trough variation) Flight to Quality Industrial Metals -10.5% Gold -8.1% Goldman Sachs Commodity Index -4.2% Agricultural Products -3.1% Oil -1.0% Data Sources: JPMorgan, Bloomberg and MSCI -12% -10% -8% -6% -4% -2% 0% * Own calculations assuming an 11% coupon and 10-year maturity
Confronting the Global Crisis in Latin America: What is the Outlook? Coordinators
Confronting the Global Crisis in Latin America: What is the Outlook? Policy Trade-offs May for 20, Unprecedented 2009 - Maison Times: Confronting de l Amérique the Global Crisis Latine, America, ParisIADB,
More informationExternal Factors, Macro Policies and Growth in LAC: Is Performance that Good?
External Factors, Macro Policies and Growth in LAC: Is Performance that Good? Alejandro Izquierdo IADB Emerging Powers in Global Governance Conference Paris, July 6, 2007 (based on work with Ernesto Talvi)
More informationBooms and Busts in Latin America: The Role of External Factors
Economic and Financial Linkages in the Western Hemisphere Seminar organized by the Western Hemisphere Department International Monetary Fund November 26, 2007 Booms and Busts in Latin America: The Role
More informationAn Uneven Recovery. Outlook for Latin America and the Caribbean. A Presentation by Western Hemisphere Department
International Monetary Fund November 1, 2018 An Uneven Recovery Outlook for Latin America and the Caribbean A Presentation by Western Hemisphere Department I. Key Messages II. Global Crosscurrents III.
More informationCapital Markets and Corporate Governance Service Line Capital Markets Practice, FPD
Capital Markets and Corporate Governance Service Line Capital Markets Practice, FPD Emerging Capital Markets Update for August 2011 All data are as of Wednesday, August 31, 2011. The regional indices are
More informationCapital Markets and Corporate Governance Service Line Capital Markets Practice, FPD
Capital Markets and Corporate Governance Service Line Capital Markets Practice, FPD Emerging Capital Markets Update for July 2011 All data are as of Friday, July 29, 2011. The regional indices are based
More informationLATIN AMERICA OUTLOOK 4Q2016 OUTLOOK LATIN AMERICA. 4th QUARTER 2016
LATIN AMERICA OUTLOOK 4Q OUTLOOK LATIN AMERICA 4th QUARTER LATIN AMERICA OUTLOOK 4Q Main messages The global economy is heading for a slow recovery. Global GDP growth will improve slightly from the second
More informationAmericas Latinas: revisited
Americas Latinas: revisited Global Insight World Economic Outlook Conference Manuel Balmaseda Chief Economist Boston, October 2007 Boston October 2007 1 A New LatAm Sounder Economics Sounder Domestic Policy
More informationMonetary Policy: A Key Driver for Long Term Macroeconomic Stability
Monetary Policy: A Key Driver for Long Term Macroeconomic Stability Julio Velarde Governor Central Bank of Peru March 2016 Agenda 1. Peru s growth is based on strong fundamentals 2. Recent economic developments
More informationEmerging Markets Debt: Outlook for the Asset Class
Emerging Markets Debt: Outlook for the Asset Class By Steffen Reichold Emerging Markets Economist May 2, 211 Emerging market debt has been one of the best performing asset classes in recent years due to
More informationEffects of the U.S. Quantitative Easing on a Small Open Economy
Effects of the U.S. Quantitative Easing on a Small Open Economy César Carrera Fernando Pérez Nelson Ramírez-Rondán Central Bank of Peru November 5, 2014 Ramirez-Rondan (BCRP) US QE and Peru November 5,
More informationThink Global Invest Local
Think Global Invest Local Perspectives on Investment Opportunities in Latin America LABA Conference February 16 th, 2007 Guillermo Jasson Latin America Regional Head and Head of Investment Banking 1-212-761-7056
More informationEmerging Market Debt: Smoke but no fire
Emerging Market Debt: Smoke but no fire November 2014 Edwin Gutierrez, Head of Emerging Market Sovereign Debt Aberdeen Asset Management For Professional Investors only Not for public distribution Smoke
More informationThe Fertile Soil of Corporate Bond Market
Oct 09 Sep 10 Aug 11 Jul 12 Jun 13 May 14 Oct 09 Apr 10 Oct 10 Apr 11 Oct 11 Apr 12 Oct 12 Apr 13 Oct 13 Apr 14 Basis Points Basis Points PERSPECTIVES The Fertile Soil of Corporate Bond Market May 2014
More informationMexico s Macroeconomic Outlook and Monetary Policy
Mexico s Macroeconomic Outlook and Monetary Policy Javier Guzmán Calafell, Deputy Governor, Banco de México* XP Securities Washington, DC, 13 October 2017 */ The opinions and views expressed in this document
More informationCapital Flows to Latin America: Policy Challenges and Responses
Capital Flows to Latin America: Policy Challenges and Responses Javier Guzmán Calafell Director General Center for Latin American Monetary Studies INTERNATIONAL CAPITAL MOVEMENTS: OLD AND NEW DEBATES Cusco,
More informationMexico s Economic Policy under External Constraints. Manuel Sánchez, Member of the Board
Manuel Sánchez, Member of the Board Adam Smith Seminar, Schloss Spiez, Switzerland, June 27, 2012 Contents 1 Monetary Policy and Capital Inflows 2 Implications of European Uncertainty 3 Economic Developments
More informationDate of Latest Changes
Emerging Capital Markets Update for May 2011 All data are as of Tuesday, May 31, 2011. The regional indices are based on an average of major EM countries in each region where the data are available. Summary
More informationABSTRACT. This paper shows that the Russian 1998 crisis had a big impact on capital flows to Emerging Market
Sudden Stop, Financial Factors and Economic Collapse in Latin America: Learning from Argentina and Chile Guillermo A. Calvo and Ernesto Talvi NBER Working Paper No. 11153 February 2005 JEL No. F31, F32,
More informationLiquidity Risk Management for Portfolios
Liquidity Risk Management for Portfolios IPARM China Summit 2011 Shanghai, China November 30, 2011 Joseph Cherian Professor of Finance (Practice) Director, Centre for Asset Management Research & Investments
More informationGlobal Economic Prospects: Navigating strong currents
Global Economic Prospects: Navigating strong currents Andrew Burns World Bank January 18, 2011 http://www.worldbank.org/globaloutlook Main messages Most developing countries have passed with flying colors
More informationFinancial Flows from the United States to Latin America
Economic and Financial Linkages in the Western Hemisphere Seminar organized by the Western Hemisphere Department International Monetary Fund November 26, 2007 Financial Flows from the United States to
More informationSovereign Credit Outlook. Richard Francis Director, Latin America Sovereigns Corficolombiana Conference December 5, 2018
Sovereign Credit Outlook Richard Francis Director, Latin America Sovereigns Corficolombiana Conference December 5, 218 Agenda Global Perspective Regional Overview Sovereign Ratings and Recent Actions Colombia
More informationLatin America Outlook. 2nd QUARTER 2017
Latin America Outlook 2nd QUARTER Latin America Outlook 2Q17 Main messages 1. Global growth keeps increasing, and uncertainty about US policies starts to fade. Nevertheless, global risks remain. 2. The
More informationIV SPECIAL FEATURES PORTFOLIO FLOWS TO EMERGING MARKET ECONOMIES: DETERMINANTS AND DOMESTIC IMPACT
IV SPECIAL FEATURES A PORTFOLIO FLOWS TO EMERGING MARKET ECONOMIES: DETERMINANTS AND DOMESTIC IMPACT This special feature describes the recent wave of private capital fl ows to emerging market economies
More informationSeminar Series on Regional Economic Integration
Seminar Series on Regional Economic Integration IMF Outreach Presentation on the IMF 214 Spillover Report Sweta Saxena Senior Economist IMF Research Department 26 September 214 9: 11: Manila time ADB Headquarters,
More informationGovernor Central Bank of Argentina
Banco Central de la República Argentina "International Crisis and Policy Space: Challenges for Emerging Countries" Mercedes Marcó del Pont Governor Central Bank of Argentina 2th Annual Hyman P. Minsky
More informationSelf Insurance, Regional Arrangements, and Preemptive Financing: The experience of Brazil
Crisis Prevention in Emerging Markets Self Insurance, Regional Arrangements, and Preemptive Financing: The experience Brazil High Level Seminar on Crisis Prevention July 1-11, 11, 26 Singapore Joaquim
More informationSituación España 1T16. 1 st QUARTER. Situación. Españ. Economic Outlook. Latin America
Situación España 1T16 Situación 1 st QUARTER Españ Economic Outlook Latin America Latam outlook / February The global economy will continue to grow. but more slowly and with more risks. Uncertainty about
More informationHow to measure country risk?
How to measure country risk? Produced by: Cross-country Emerging Markets Unit For the Occasion of: Second BBVA Resarch Emerging Market Seminar Madrid, July 13, 211 Road map to the presentation 1. Previous
More informationWorld Economic Outlook Is the Tide Rising?
World Economic Outlook Is the Tide Rising? January 214 1 Global activity has strengthened. Further improvements expected. WEO Update in a nutshell Advanced economy growth has picked up Robust private demand
More informationOtaviano Canuto Vice President & Head of Network Poverty Reduction and Economic Management The World Bank
Otaviano Canuto Vice President & Head of Network Poverty Reduction and Economic Management The World Bank The 11th International Academic Conference on Economic and Social Development April 6-8, 2010 Moscow
More informationMexico: Dealing with international financial uncertainty. Manuel Sánchez
Manuel Sánchez United States Mexico Chamber of Commerce, Chicago, IL, August 6, 2015 Contents 1 Moderate economic growth 2 Waiting for the liftoff 3 Taming inflation 2 Since 2014, Mexico s economic recovery
More informationFiscal Policy in Commodity Republics Comments. Guillermo Calvo Columbia University
Fiscal Policy in Commodity Republics Comments Guillermo Calvo Columbia University www.columbia.edu/~gc2286 BIS 10th Annual Conference, 23-24 June 2011, Hotel Palace, Luzern, Switzerland Cespedes-Velasco
More informationLatin America Copes with Volatility, The Dark Side of Globalization
Latin America Copes with Volatility, The Dark Side of Globalization 2012 Spring Meetings IMF-World Bank Chief Economist Office Latin America and the Caribbean The World Bank Washington, DC 18 April 2012
More informationLatin America: the shadow of China
Latin America: the shadow of China Juan Ruiz BBVA Research Chief Economist for South America Latin America Outlook Second Quarter Madrid, 13 May Latin America Outlook / May Key messages 1 2 3 4 5 The global
More informationRecent Economic Developments and Monetary Policy in Mexico
Recent Economic Developments and Monetary Policy in Mexico Javier Guzmán Calafell, Deputy Governor, Banco de México* United States-Mexico Chamber of Commerce, Northeast Chapter New York City, 2 June 2017
More informationPeru s Fundamentals and Economic Outlook
Peru s Fundamentals and Economic Outlook Julio Velarde Governor Central Bank of Peru October 2016 Content 1. Slow Global Recovery 5. Gradual withdrawal of monetary stimulus 2. Reversal in Peru s external
More informationLatin America Sovereign Ratings in a Weakening Global Economy Shelly Shetty, Head of Latin America Sovereigns
Latin America Sovereign Ratings in a Weakening Global Economy Shelly Shetty, Head of Latin America Sovereigns October 11, 211 Agenda Latin America Sovereigns: Ratings Trajectory In A Weakening Global Environment
More informationPeru s fundamentals and economic outlook Julio Velarde Governor Central Bank of Peru. March 2015
Peru s fundamentals and economic outlook Julio Velarde Governor Central Bank of Peru March 2015 Agenda 1. Peru s growth is based on strong fundamentals 2. Recent economic developments and prospects 3.
More informationWorld Economic Outlook
World Economic Outlook Marco E. Terrones Assistant to the Director Research Department, IMF May 2012 The views expressed in this presentation are those of the author and do not necessarily represent those
More informationExchange Rate and Fiscal Policies in developing countries: leaning against the wind?
Exchange Rate and Fiscal Policies in developing countries: leaning against the wind? Guillermo Perry Chief Economist for Latin America and the Caribbean The World Bank Conference on Emerging Powers in
More informationOutlook for the World Economy: Implications for the Caribbean. Saul Lizondo. Western Hemisphere Department International Monetary Fund
Outlook for the World Economy: Implications for the Caribbean Saul Lizondo Associate Director Western Hemisphere Department International Monetary Fund Trinidad id d and Tobago, September, 1 Presentation
More informationManaging Sudden Stops
Managing Sudden Stops Barry Eichengreen and Poonam Gupta Presented at The Bank of Spain November 17, 2016 Views are personal Context Capital flows to emerging markets continue to be volatile-- pointing
More informationAPPENDIX ECONOMIC INDICATORS DEVELOPED ECONOMIES
16 QUARTERLY INVESTMENT STRATEGY APPENDIX ECONOMIC INDICATORS DEVELOPED ECONOMIES Purchasing Managers Index EMERGING ECONOMIES Purchasing Managers Index US Eurozone Japan Brazil Russia India China Industrial
More informationThe current financial crisis: Old wine in new goatskins or is this time different for Latin America?
The current financial crisis: Old wine in new goatskins or is this time different for Latin America? Ramón Pineda, Esteban Pérez-Caldentey, Daniel Titelman 1 March 20, 2009 1 Development Studies Section,
More informationManaging Sudden Stops. Barry Eichengreen and Poonam Gupta
Managing Sudden Stops Barry Eichengreen and Poonam Gupta 1 The recent reversal of capital flows to emerging markets* has pointed up the continuing relevance of the sudden-stop problem. This paper seeks
More informationPresentation The role of fixed income today. Quentin Fitzsimmons. Senior Portfolio Manager, Fixed Income T. Rowe Price
Presentation The role of fixed income today Quentin Fitzsimmons Senior Portfolio Manager, Fixed Income T. Rowe Price THE ROLE OF FIXED INCOME TODAY Quentin Fitzsimmons Global Fixed Income Portfolio Manager
More informationGlobal Economic Prospects: Spillovers amid Weak Growth. Select Publications from DECPG
// Global Economic Prospects: Spillovers amid Weak Growth February M. Ayhan Kose Disclaimer! The views presented here are those of the authors and do NOT necessarily reflect the views and policies of the
More informationEmerging Fixed Income A New Dawn. Simon Lue-Fong March 2007 I Lima
Emerging Fixed Income A New Dawn Simon Lue-Fong March 2007 I Lima Table of contents 1. The Changing Landscape Emerging USD Bonds have had a spectacular ride But where next? EMERGING USD BOND SPREADS SINCE
More informationINFLATION REPORT. March Recent trends and macroeconomic forecasts
INFLATION REPORT March 2016 Recent trends and macroeconomic forecasts 2016-2017 INFLATION REPORT: Recent trends and macroeconomic forecasts 2016-2017 March 2016 International environment Public Monetary
More informationCommon Drivers in Emerging Market Spreads and Commodity Prices
Common Drivers in Emerging Market Spreads and Commodity Prices Diego Bastourre (BCRA) Javier Ibarlucia (BCRA) Jorge Carrera (BCRA) Mariano Sardi (BCRA) Fourth BIS Consultative Council for the Americas
More informationMonetary and Exchange Rate Policy Responses to the Global Financial Crisis: The Case of Colombia
Monetary and Exchange Rate Policy Responses to the Global Financial Crisis: The Case of Colombia Hernando Vargas Banco de la República Colombia March, 2009 Contents I. The state of the Colombian economy
More informationPrivate Equity: Where Risk Meets Opportunity
Private Equity: Where Risk Meets Opportunity Panel Detail: Tuesday, April 28, 2009 11:00 AM - 12:15 PM Speakers: Leon Black, Founding Partner, Apollo Management LP Jim Davidson, Co-Founder and Chairman,
More informationDiscussion of Bacchetta & Benhima paper The Demand for Liquid Assets and International Capital Flows
Discussion of Bacchetta & Benhima paper The Demand for Liquid Assets and International Capital Flows Marcel Fratzscher European Central Bank Conference Financial Globalization: Shifting Balances Banco
More informationMonetary Policy under Fed Normalization and Other Challenges
Javier Guzmán Calafell, Deputy Governor, Banco de México* Santander Latin America Day London, June 28 th, 2018 */ The opinions and views expressed in this document are the sole responsibility of the author
More informationLessons of the Financial Crisis for the Design of the New International Financial Architecture
Lessons of the Financial Crisis for the Design of the New International Financial Architecture John B. Taylor Hoover Institution and Stanford University Written Version of Keynote Address Conference on
More informationLatin America Outlook. 1st QUARTER 2018
Latin America Outlook 1st QUARTER Main messages 1. Strong global growth continues. Forecasts revised up in in most areas. Growth stabilizing in. 2. Growth recovers in Latin America, reaching close to potential
More informationChallenges of financial globalisation and dollarisation for monetary policy: the case of Peru
Challenges of financial globalisation and dollarisation for monetary policy: the case of Peru Julio Velarde During the last decade, the financial system of Peru has become more integrated with the global
More informationCAPITAL FLOWS TO LATIN AMERICA: CHALLENGES AND POLICY RESPONSES. Javier Guzmán Calafell 1
CAPITAL FLOWS TO LATIN AMERICA: CHALLENGES AND POLICY RESPONSES Javier Guzmán Calafell 1 1. Introduction Capital flows to Latin America and other emerging market regions fell sharply after the collapse
More informationMonetary and Macroprudential Policy in Small Open Economies
Economic Studies Division FLAR X Meeting of Monetary Policy Managers, Asunción - Paraguay Monetary and Macroprudential Policy in Small Open Economies Febrero 08 de 2012 Bogotá D.C., Colombia Index Pg.
More informationGS Global ECS Credit Strategy Research. March 31, Alberto Gallo, CFA Goldman, Sachs & Co
The Goldman Sachs Group, Inc. Goldman Sachs Research The CLO market shows signs of life GS Global ECS Credit Strategy Research March 31, 11 Alberto Gallo, CFA Goldman, Sachs & Co. 1-917-33-31 alberto.gallo@gs.com
More informationOlivier Blanchard Economic Counsellor and Director of the Research Department, International Monetary Fund
Centre for Economic Performance 21st Birthday Lecture Series The State of the World Economy Olivier Blanchard Economic Counsellor and Director of the Research Department, International Monetary Fund Lord
More informationGlobal Economic Prospects
Global Economic Prospects Back from the Brink? Andrew Burns World Bank Prospects Group April 12, 212 1 Amid some signs of improvement, global recovery remains fragile First quarter of 212 has been generally
More informationCapital Flows in the Euro Area: Some lessons from the last boom-bust cycle. Angel Gavilan, Martin Hillebrand December 2017
Capital Flows in the Euro Area: Some lessons from the last boom-bust cycle Angel Gavilan, Martin Hillebrand December 217 The last boom in capital flows was largely a global phenomenon Sum of current account
More informationExecutive Summary. July 17, 2015
Executive Summary July 17, 2015 The Revenue Estimating Conference adopted interest rates for use in the state budgeting process. The adopted interest rates take into consideration current benchmark rates
More informationBanco Central de la República Argentina
Macroeconomic effects of commodity prices evolution and its relation with monetary policy in emerging countries Banco Central de la República Argentina The implementation of monetary policy: Lessons from
More informationHSBC Fund Update. HSBC GIF Global Emerging Markets Bond. March Summary. Market overview. market.
HSBC Fund Update March 2015 HSBC GIF Global Emerging Markets Bond Summary Market sentiment improved in February given supportive global developments including the interim agreement between Greece and its
More informationOther similar crisis: Euro, Emerging Markets
Session 15. Understanding Macroeconomic Crises. Mexican Crisis 1994-95 Other similar crisis: Euro, Emerging Markets Global Scenarios 2017-2021 The Mexican Peso Crisis in 1994: Background An economy that
More informationThe Future of Mexican Monetary Policy
The Future of Mexican Monetary Policy Mr. Javier Guzmán Calafell, Deputy Governor, Banco de México* XP Securities Mexico Summit Mexico City, 2 March 2017 */ The views expressed herein are strictly personal.
More informationInternational Monetary Fund
International Monetary Fund World Economic Outlook Jörg Decressin Deputy Director Research Department, IMF April 212 Towards Lasting Stability Global Economy Pulled Back from the Brink Policies Stepped
More informationThe Impact of U.S. Monetary Policy Normalization on Capital Flows to EMEs
The Impact of U.S. Monetary Policy Normalization on Capital Flows to EMEs Tatjana Dahlhaus Garima Vasishtha Bank of Canada 13th Research Meeting of NIPFP-DEA Research Program March 6, 215 Introduction
More informationThe Long and the Short of Emerging Market Debt
The Long and the Short of Emerging Market Debt Luis Opazo Claudio Raddatz Sergio Schmukler 5 th Meeting NIPFP-DEA Program September 2009 Presentation 1. Motivation 2. Data and Methodology 3. Maturity Structure
More informationEconomic and Market Outlook
Economic and Market Outlook Third Quarter 2018 Investment Products: Not FDIC Insured No Bank Guarantee May Lose Value Past performance is no guarantee of future results. Financial term and index definitions
More informationMonetary Policy Outlook for Mexico
Mr. Javier Guzmán Calafell, Deputy Governor, Banco de México J.P. Morgan Investor Seminar Washington, DC, 8 October 2016 Outline 1 2 3 4 5 Monetary Policy in Mexico Evolution of the Mexican Economy Inflation
More informationMature Economies. Quantitative Market Alert
Mature Economies Quantitative Market Alert MarketQuant Research Monthly February 1, 2018 Quantitative Market Alert Mature Economies Monthly MarketQuant Research February 1, 2018 Contents Key messages February
More informationBenchmarking LAC through the cycle, so far: downturn and recovery
The New Face of LAC: Financially Globalized and Resilient International Crisis Seminar: Macro Adjustment and Prospects for LAC Augusto de la Torre Chief Economist for Latin America The World Bank Santiago,
More informationExternal Factors in Debt Sustainability Analysis: An Application to Latin America
Journal of Banking and Financial Economics 1(5)2016, 81 120 81 External Factors in Debt Sustainability Analysis: An Application to Latin America Gustavo Adler International Monetary Fund, USA gadler@imf.org
More informationThe Challenges to Achieving Sustainable Growth in Latin America
The Challenges to Achieving Sustainable Growth in Latin America Guillermo Ortiz Chairman, Grupo Financiero Banorte; Former Governor, Bank of Mexico; Former Secretary of Finance and Public Credit, Mexico;
More informationEmerging market debt outlook
Investment Insights Emerging market debt outlook January 2012 2011 in review 2011 was a year in which investors focused on the economic fundamentals underlying their investments. Financial markets were
More informationGlobal Economic Prospects and the Developing Countries William Shaw December 1999
Global Economic Prospects and the Developing Countries 2000 William Shaw December 1999 Prospects for Growth and Poverty Reduction in Developing Countries Recovery from financial crisis uneven International
More informationWorld Economic Outlook. Recovery Strengthens, Remains Uneven April
World Economic Outlook Recovery Strengthens, Remains Uneven April 214 1 April 214 WEO: Key Messages Global growth strengthened in 213H2, will accelerate further in 214-1 Advanced economies are providing
More informationRECENT EVOLUTION AND OUTLOOK OF THE MEXICAN ECONOMY BANCO DE MÉXICO OCTOBER 2003
OCTOBER 23 RECENT EVOLUTION AND OUTLOOK OF THE MEXICAN ECONOMY BANCO DE MÉXICO 2 RECENT DEVELOPMENTS OUTLOOK MEDIUM-TERM CHALLENGES 3 RECENT DEVELOPMENTS In tandem with the global economic cycle, the Mexican
More informationLAC Treads a Narrow Path to Growth: The Slowdown and its Macroeconomic Challenges
LAC Treads a Narrow Path to Growth: The Slowdown and its Macroeconomic Challenges Washington, DC April 14, 2015 Chief Economist Office Latin America and the Caribbean Region I. What happened? The deceleration
More informationRUSSIAN ECONOMIC OUTLOOK AND MONETARY POLICY. RUSSIA S ECONOMIC OUTLOOK AND MONETARY POLICY December 2018
4% RUSSIA S ECONOMIC OUTLOOK AND December 1 2 Consumer prices (1) At the end of 1, inflation is expected to be close to 4%, which corresponds to the Bank of Russia s target 2 Inflation indicators, % YoY
More informationJosé Darío Uribe E. Governor central bank of colombia October 13, 2011
Capital Flows, Policy Challenges and Policy Options José Darío Uribe E. Governor central bank of colombia October 13, 2011 Outline Review the fluctuations of macroeconomic aggregates along the cycles of
More informationGLOBAL MARKET OUTLOOK
GLOBAL MARKET OUTLOOK Max Darnell, Managing Partner, Chief Investment Officer All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. performance is no
More informationEarnings Conference Call Fourth Quarter & Full-year Results 2017
Earnings Conference Call Fourth Quarter & Full-year Results 2017 Sob 2020 Sob 2023 Sob 2024 Sob 2026 Sob 2028 Sob 2031 Sob 2032 2011 2012 2013 2014 2015 2016 2017 2018 2019 Zinc Copper Gold Macroeconomic
More informationLACEA/LAMES 2007 BRAZIL" 05/10/2007
LACEA/LAMES 2007 Policy Responses to Sudden Stops in BRAZIL" 05/10/2007 Márcio Garcia www.econ.puc-rio/mgarcia Introduction (1/2) Brazil suffered in 2002 a sudden stop. Capital flows fell by some USD 24
More informationJulio Velarde Governor Central Reserve Bank of Peru Kuala Lumpur, Malaysia October 2011
Monetary Policy Implementation: Lessons from the Crisis and Challenges for Coming Years Julio Velarde Governor Central Reserve Bank of Peru Kuala Lumpur, Malaysia October 2011 Content 1. Introductory remarks
More informationWorld Equity Market Performance Top 10 USD Adjusted Returns, 2006
World Equity Market Performance Top 1 USD Adjusted Returns, 26 Percent Change, Year Ago 2 18 16 14 12 1 8 6 4 2 Venezuela Cyprus Botswana Morocco Russia Peru Vietnam China Yugoslavia Croatia Source: Bloomberg
More informationResilience in Emerging Market and Developing Economies: Will It Last?
International Monetary Fund World Economic Outlook October 212 Resilience in Emerging Market and Developing Economies: Will It Last? Abdul Abiad, John Bluedorn, Jaime Guajardo, and Petia Topalova with
More informationAvinash Ramlogan and Wendy Ho Sing. Presented at CCMF Conference, 2014
Central Bank of Trinidad and Tobago Examining the Trinidad and Tobago Banking Sector s Exposure to the Local Housing Market Avinash Ramlogan and Wendy Ho Sing Presented at CCMF Conference, 2014 19th November,
More informationFinancial Crises and Asset Prices. Tyler Muir June 2017, MFM
Financial Crises and Asset Prices Tyler Muir June 2017, MFM Outline Financial crises, intermediation: What can we learn about asset pricing? Muir 2017, QJE Adrian Etula Muir 2014, JF Haddad Muir 2017 What
More informationSovereign Risks and Financial Spillovers
Sovereign Risks and Financial Spillovers International Monetary Fund October 21 Roadmap What is the Outlook for Global Financial Stability? Sovereign Risks and Financial Fragilities Sovereign and Banking
More informationThreats to Financial Stability in Emerging Markets: The New (Very Active) Role of Central Banks. LILIANA ROJAS-SUAREZ Chicago, November 2011
Threats to Financial Stability in Emerging Markets: The New (Very Active) Role of Central Banks LILIANA ROJAS-SUAREZ Chicago, November 2011 Currently, the Major Threats to Financial Stability in Emerging
More informationOutlook for the Mexican Economy Alejandro Díaz de León Carrillo, Governor, Banco de México. April, 2018
Alejandro Díaz de León Carrillo, Governor, Banco de México April, Outline 1 External Conditions Current Outlook.1. Monetary Policy and Inflation Determinants in Mexico Evolution of Economic Activity Recent
More informationEmerging Market Debt attractive yield with solid fundamentals
For professional use only Not for Public distribution Emerging Market Debt attractive yield with solid fundamentals November 2012 Kevin Daly, Senior Portfolio Manager EMD Aberdeen Asset Management Table
More informationTHE ANATOMY OF TERMS OF TRADE BOOMS IN LAC
March 217 THE ANATOMY OF TERMS OF TRADE BOOMS IN LAC Approved By Valerie Cerra Prepared By Daniel Rodriguez Delgado CONTENTS THE ANATOMY OF TERMS OF TRADE BOOMS IN LAC... 2 A. Introduction... 2 B. Data
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco April 2017 Roadmap Global Economy The global outlook remains favorable Global growth positive momentum continues, with a synchronized
More information