Since the 1950’s Latin America and the Caribbean have lost relative income share on a consistent basis in relation to the World and the developed countries on average. This paper presents a regional comparative statistical and econometric analysis for 1950-2007 for seven regions in the world, showing that for Latin America and the Caribbean convergence results mainly from weak expansions. Contractions have, as expected, a negative effect on the performance of Latin America and the Caribbean in historical perspective. At the same time in comparison to other regions, Latin America and the Caribbean recover quickly. Contrarily during expansions Latin America and the Caribbean tend to perform below the World and developing World regional average. Latin America and the Caribbean countries are, from a regional comparative perspective, ‘good’ at withstanding the negative effects of contractions and ‘bad’ at taking advantage of expansions to achieve convergence with the developed world. The paper argues that instead of viewing expansions through the lens of ‘crisis management,’ expansions should be seen and understood as an opportunity to grow and expand and promote greater levels of well-being, employment and equity in the region.
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