The Privilege of Normality: Latin American Fiscal Space, Countercyclical Policy and the 2008 Financial Crisis

摘要

"This paper focuses on a key question: has Latin America earned, in the words of José Juan Ruiz, “the privilege of normality?” Did Latin American countries develop the macroeconomic capacity necessary to escape the large-scale currency depreciations, major financial disruptions, and pro-cyclical “sudden stops” in financing during downturns that mar the region’s history? And if so, what circumstances contribute to or detract from states’ abilities to implement these countercyclical programs in the face of a crisis? Through a controlled comparison of several Latin American countries, I demonstrate the pathway Latin American countries have taken to accumulate or deplete the fiscal space needed for countercyclical policy. By examining the macroeconomic behavior of these countries prior to and following the 2008 financial crisis, I determine that effective management of international reserves and fiscal sustainability are crucial conditions for any country looking to mediate the severity of an economic downturn. Some, but not all, Latin American countries developed these crucial macroeconomic capacities. Many enacted these policies on tenuous political grounds. Perhaps the most important question is whether those who have earned normality will continue the policies they need to keep it."--from pages 127-128