Economic Survey of Latin America and the Caribbean 1988

image of Economic Survey of Latin America and the Caribbean 1988

In 1988, the economic crisis of Latin America and the Caribbean took a dramatic turn. For the first time since the 1981-1983 recession, the per capita product declined to a level equivalent to that of 1978; inflation almost quadrupled to an unprecedented average of 760%, and real incomes declined in most of the countries.



Methodological annex to section X

In estimating the public sector's absorption of private debt, the following hypothesis was used: the amount of debt absorbed (A) by the public sector during the period t + 1 is equivalent to: At+i = dt + i - dt - fnt+i, where "d" represents the long- term public external debt and "fn" represents net flows, defined as the difference between net loans and amortization (the magnitudes of all these variables were taken from the World Bank, World Debt Tables, Washington, D.C., 1988).


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