1/7
This very interesting article by @greg_ip argues that “Latin America, which led developing nations in adopting a market-friendly model of economic development, may now be leading them away from it.”
wsj.com/articles/latin… via @WSJ
This very interesting article by @greg_ip argues that “Latin America, which led developing nations in adopting a market-friendly model of economic development, may now be leading them away from it.”
wsj.com/articles/latin… via @WSJ
2/7
This certainly seems to be happening, but I’d add that it was probably quite predictable. In 1996 I published an article that tracked nearly 2 centuries during which Latin American countries had embraced classic capitalist reforms far more strongly...
foreignaffairs.com/articles/south…
This certainly seems to be happening, but I’d add that it was probably quite predictable. In 1996 I published an article that tracked nearly 2 centuries during which Latin American countries had embraced classic capitalist reforms far more strongly...
foreignaffairs.com/articles/south…
3/7
than other countries – including the US – ever had, only to reject them a few decades later in favor of a much more interventionist model. This has happened several times in the 19th and 20th centuries and there is no reason to assume that it won’t happen in the 21st.
than other countries – including the US – ever had, only to reject them a few decades later in favor of a much more interventionist model. This has happened several times in the 19th and 20th centuries and there is no reason to assume that it won’t happen in the 21st.
4/7
So which set of policies has been more successful, free markets or heavy intervention? Neither, it seems. During periods of great global liquidity, when money is pouring into risky developing countries, whichever set of policies Latin America countries are following seems...
So which set of policies has been more successful, free markets or heavy intervention? Neither, it seems. During periods of great global liquidity, when money is pouring into risky developing countries, whichever set of policies Latin America countries are following seems...
5/7
to be the right set (for example, both the Washington Consensus years in the 1990s as well as the ISI years in the 1960s and early 1970s). During periods of major capital outflows, however, growth collapses, and the previous set of policies quickly loses its prestige.
to be the right set (for example, both the Washington Consensus years in the 1990s as well as the ISI years in the 1960s and early 1970s). During periods of major capital outflows, however, growth collapses, and the previous set of policies quickly loses its prestige.
6/7
I assume we are going through another such round. What this suggests to me that the main problem afflicting the region has perhaps less to do with which economic ideology dominates and more to do with its low savings rate – or the ease with which domestic savings...
I assume we are going through another such round. What this suggests to me that the main problem afflicting the region has perhaps less to do with which economic ideology dominates and more to do with its low savings rate – or the ease with which domestic savings...
7/7
can flee the country. Successful East Asian countries were much better at forcing up domestic savings rates and deploying these savings into domestic investment.
can flee the country. Successful East Asian countries were much better at forcing up domestic savings rates and deploying these savings into domestic investment.
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