After a growth slowdown that lasted six years, the Latin America and the Caribbean (LAC) region has finally turned the corner and resumed growth at a modest rate of 1.1 percent in 2017 and 1.8 percent expected in 2018. This reflects a more favorable external environment, particularly a recovery...

A large literature has argued that different types of capital flows have different consequences for macroeconomic stability. By distinguishing between foreign direct investment and portfolio and other investments, this paper studies the effects of the composition of capital inflows on output...

A large literature has documented that fiscal policy is procyclical in emerging markets and developing economies and acyclical/countercyclical in advanced economies. This paper analyzes fiscal procyclicality in commodity-exporting countries. It first shows that the degree of fiscal...

An earlier paper titled "Non-linear effects of tax changes on output: The role of the initial level of taxation," estimated tax multipliers using (i) a novel dataset on value-added taxes for 51 countries (21 industrial and 30 developing) for the period 1970-2014, and (ii) the so-called narrative...

The Ds: Sharp economic downturns follow banking crises; with government revenues falling, fiscal deficits worsen; deficits lead to debt; as debts pile up rating downgrades follow. For the most fortunate countries it does not end in default

Sovereign credit ratings play an important part in determining countries' access to international capital markets and the terms of that access. In principle, there is no reason to expect that sovereign credit ratings should systematically predict currency crises. In practice, in emerging market...

Financial crises of every variety rocked emerging markets in the second half of the 1990s. Nearly every region experienced currency crashes, banking crises were both numerous and severe, and a few countries, facing extreme duress, defaulted on their sovereign debt. Not surprisingly, then, there...

The Ds:Sharp economic downturns follow banking crises; with government revenues falling, fiscal deficits worsen; deficits lead to debt; as debts pile up rating downgrades follow.For the most fortunate countries it does not end in default.

This paper shows that China has launched a new global system for cross-border rescue lending to countries in debt distress. It builds the first comprehensive dataset on China's overseas bailouts between 2000 and 2021 and provide new insights into China's growing role in the global financial...