This paper shows that budget deficits account for a relatively small fraction of debt growth and that stock-flow reconciliation, which is often considered a residual entity, is one of the key determinants of debt dynamics. After having explained the importance of the stock-flow reconciliation,...

Inflation can grease the wheels of the labor market by relaxing downward wage rigidity but it can also increase uncertainty and have a negative sand effect. This paper studies the grease effect of inflation by looking at whether the interaction between inflation and labor market regulations...

Recent empirical and theoretical literature on the impact of real exchange rate devaluations on economic performance questions the traditional expansionary effect generated within standard Mundell-Fleming models. Contractionary devaluations may arise when firms face maturity or currency...

This paper presents a new dataset on electoral systems and outlines its potential uses in further research exploring the connections between electoral systems and economic outcomes. The dataset provides indicators of the degree to which individual politicians can further their careers by...

This paper examines whether bank ownership (public versus private, domestic versus foreign) is correlated with bank lending behavior over the business cycle. The paper finds that state-owned banks may play a useful credit-smoothing role because their lending is less responsive to macroeconomic...

The objective of this paper is to use opinion polls to document Latin Americans' increasing discontent with reforms and to explore possible explanations for this trend. We test four possible explanations for the rejection of reforms. The first focuses on a change in political orientation. The...

Commonly used datasets on the level of public debt provide incomplete country and period coverage. This paper presents a new dataset that includes complete series of central government debt for 89 countries over the 1991-2005 period and for seven other countries for the 1993-2005 period. The...

This paper uses a difference-in-difference methodology similar to the one originally proposed by Rajan and Zingales (1998) to test whether defaulting hurts the more export-oriented industries. Strong support for this hypothesis was found, but contrary to the findings of previous studies, our...

The future of structural reforms in Latin America is under discussion. The purpose of this document is to synthesize the facts and opinions that underlie this debate. The first section shows that although the reform process has not ground to a halt, it has been incomplete and uneven, both across...

The Research Department of the IDB (RES) performs innovative, comparative research on the development issues of greatest concern to the region today. It generates a wide variety of products based on this research and disseminates them to three principal audiences: the Bank, policymakers and the...