What are the reasons for and the costs of Latin America's volatility? Because there is no consensus on these fundamental questions, there is no consensus on the appropriate policy response to macroeconomic volatility in Latin America, and other shock-prone countries. This paper provides new...

This paper complements previous studies by arguing that the low private savings ratio in Latin America can be associated with the limited confidence of households and businesses in domestic financial institutions. Previous studies have established a relationship between private savings and...