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This paper analyzes central banks' role in banking crises in Latin America. It finds that, except in a handful of cases, where bank resolution was timely executed, central bank money was used in large scale to contain and manage systemic and small crises alike. However, pouring money into the financial system tended to fuel macroeconomic unrest and increased the chances of currency crises, in particular in emerging market countries. While subject to some caveats, the conclusions of this paper are relevant and should be taken by developing countries as a warning against excessively expanding central banks' balance sheets to cope with financial crises, as several industrial countries have done it recently. [ABSTRACT FROM AUTHOR]

This paper surveys the recent literature on the methodologies that have been used to evaluate the distributive and poverty effects of trade liberalization in Latin America. Our survey classifies the large number of papers on the subject according to the welfare measure they use: inequality (on wages and household income) or poverty. Our survey shows that a sound methodological approach evaluating the welfare effects of trade liberalization should take into account: the degree of tariff to price transmission, all income sources (not only wages), employment effects, gender and regional heterogeneity of the impact of trade, and second-order as well as general equilibrium effects. Two methodologies represent the latest efforts in this direction: (1) Income generation models with an explicit relationship between changes in tariff and changes in household real income (Porto, 2007), which are capable of testing the different transmission channels linking trade policy and inequality and poverty; (2) The Macro-Micro approach (Bourguingon et al, 2008), which combines a CGE with a micro-simulation model, evaluates the welfare effects of trade policy, taking into account general equilibrium effects. These two approaches can be combined to get the short- and long-term welfare effects of trade policy, respectively. [ABSTRACT FROM AUTHOR]

Latin America has been dominated by growth expansions that, more often than not, have ended in crises and protracted periods of stagnation. This has led to poor growth performance during most of the past century. This paper reviews Latin American growth experiences and discusses some particular areas that help to explain why sustainable growth has been so elusive in the region. In particular, it discusses the role of openness and intraregional trade, the role of institutions, macroeconomic stability and inequality, all factors that are central to resume and maintain growth. The paper also discusses more general issues related to growth, such as the importance of protecting property rights and having an adequate structure of rewards to effort, which includes equal opportunities. Finally, a brief overview on current macroeconomic developments is presented. [ABSTRACT FROM AUTHOR]