CEPAL Review - Volume 2023, Issue 139, 2023

Latin America and the Caribbean is a region characterized by a repetitive pattern of volatility that thwarts its development process. This article conducts an empirical investigation into its volatility, comparing it with other regions. First, an asymmetrical band-pass filter is used to decompose GDP growth time series into cycles of different types for 136 countries, employing data from the Maddison Project Database for 1950–2018. Next, k-means clustering methods are used to classify volatility patterns into groups to understand their characteristics. In most countries in the region, overall volatility is explained by the relative dominance of long-run economic cycles linked to heavy dependence on commodity exports, with changes in specialization resulting from technology-driven changes in the inputs used by the countries they export to. Despite claims to the contrary in the literature, the region is not the world’s most volatile, but its countries have many particular, common characteristics.

The literature on productive structure and economic growth shows the relevance of industry in expanding gross domestic product (GDP) in developed and developing countries. Recent studies suggest that the modern services sector (professional services) contributes to innovation, increased productivity, and, consequently, economic growth. This paper presents a theoretical discussion on the importance of the modern services sector for Latin America in order to update the central thesis of the Latin American structuralist approach. The data suggest that even in the context of a productive transformation characterized by a fall in the share of manufacturing and the rise of the services sector, international division of labour is perpetuated, based on the centre-periphery relationship. The results show that structuralist thinking is adequate to explain the persistent underdevelopment of Latin American countries from a perspective focused on the service economy.

The aim of this article is to study trade integration in Central America from a value added perspective, using the first regional input-output table, a tool developed by the Economic Commission for Latin America and the Caribbean (ECLAC) in close cooperation with the central banks and statistical institutes of the region. The strategy of open regionalism employed by the countries of Central America has resulted in significant subregional trade integration with regard to gross exports; however, these exports include a significant share of intermediate inputs from outside the subregion. The vertical specialization indicators (exports and imports) estimated in this article show that exports within Central America create less domestic value added than total exports and incorporate considerable intermediate inputs from outside the subregion, creating little value added in the subregion itself.

This paper presents a set of indicators for the evaluation of energy security in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. A study of the energy problems of each country established indicators suitable for producing an energy security index (ESI). These indicators were submitted to experts for validation, with the help of energy sector specialists from the Central American countries. The Delphi method was used to process the results, and all the indicators were approved. SPSS software was used to conduct a principal component analysis with the aim of compacting the number of indicators, losing as little information as possible and obtaining an interpretable solution. The ESI for each country was calculated from the resulting variables. The ESI trend in each country was examined in the light of domestic and international events that may have had an impact on the behaviour of the indicators.

Did the coronavirus disease (COVID-19) pandemic embolden ideas favourable to inclusive social policy in Latin America? This article addresses that question by examining the emergency cash transfer programme that was implemented in Costa Rica in 2020. Drawing on legislative debates and interviews with senior officials and analysts, the study reveals the fleeting emergence of ideas in favour of expanding non-contributory social protection. The new programme was quickly reined in by a discourse that assimilated fiscal responsibility to cutting social spending rather than expanding revenues. Avoiding simplistic generalizations, the findings invite a contextualized analysis of the impact of the pandemic on specific policy-making processes, and a consideration of the role of ideas in social policy debates. If there is a risk to inclusive social policy, it is the dominant discourse of austerity.

Since 1998, Chile has been experiencing a significant slowdown in its economic growth. The Chilean economy’s recent poor performance is attributable to a halt in productive and export diversification around the beginning of the twenty-first century. State interventions have been horizontal, eschewing those to support specific industries. Intermediate interventions have focused on promoting activities (such as new exports and technologies) that form only a small part of the Chilean economy, leaving a wide margin for market forces to select companies and sectors. In terms of vertical policies, support for green hydrogen is proposed, as this is an emerging industry in which Chile has clear comparative advantages. The article also argues for exchange rate policies that mitigate sharp fluctuations in the real exchange rate and ensure a stable and competitive exchange rate for new exporters.

An econometric model is used to analyse pass-through from the exchange rate to inflation, considering the monetary policy instrument variable, the target variable, the level of economic activity, the level of credit and the exchange rate. This system is exogenously affected by commodity prices, the level of external sector activity and the uncertainty perceived by international investors. Using vector error correction models, we find greater pass-through to administered prices than to free prices and a marked asymmetry characterized by stronger exchange rate pass-through when the domestic currency appreciates (deflationary effect) than when it depreciates (inflationary effect). Moreover, we note that the asymmetry in pass-through to domestic prices is due to the behaviour of free prices, since asymmetry in administered prices is not very significant.

This article analyses the privatization processes that have been implemented in the health systems of Argentina, Brazil, Chile and Colombia. It describes and characterizes the participation of the public and private components of each of these systems, and analyses the politics of the public policies involved in these privatization processes. The results reveal the presence of multiple public-private relationships that adopted different forms over time. The article also analyses some of the responses provided and the challenges faced by the health systems during the coronavirus disease (COVID-19) pandemic, along with the role played by private entities in particular. This analysis aims to examine the trajectories of the studied policies and to identify their limitations as well as potentialities for reversing privatization processes.

This paper has three objectives: (i) to identify promising sectors worth encouraging with a view to fostering the development of the Brazilian states; (ii) to evaluate the impact of economic complexity on the volume of employment; and (iii) to simulate how many new jobs would be created if each state were to become competitive in the activities considered promising for it. The results obtained vindicate the approach of the Economic Commission for Latin America and the Caribbean (ECLAC), which emphasizes the contribution of changes in the production structure to the development process, and reaffirm how important complexity is in improving the economic performance of countries or regions, whether this is measured by income or employment.

The framework of condition convergence forms the theoretical basis for different dynamic panel data approaches, but depending on the specifications, the method and the time period, results can vary significantly. This article presents empirical results of applying different panel data approaches to study the impact of demographic factors on regional growth of the 27 states of Brazil over 2000–2014. The results suggest that estimation using the generalized method of moments (GMM) is likely to be more consistent and efficient than the other methods studied. The results also point to a significant and negative relation between the demographic variables and regional economic growth. It is hoped that this study will contribute to the literature, by offering a comparative model framework and an analysis of demographics and economic growth.