The 2007 Report on Economic and Social Progress in Latin America analyzes the nature and evolution of sovereign debt in Latin America and discusses the policies that can be followed by countries and international financial institutions (IFIs) to reduce the vulnerabilities associated with it....

This paper surveys the theoretical and empirical literature on the role of state-owned banks and also presents some new results and a robustness analysis. The paper shows that state-owned banks located in developing countries have fiscal costs because they are characterized by lower returns than...

Few would dispute that sovereign defaults entail significant economic costs, including, most notably, important output losses. However, most of the evidence supporting this conventional wisdom, based on annual observations, suffers from serious measurement and identification problems. To address...

An analysis of the performance of the global financial safety net during the 2008-2009 crisis, and an evaluation of its new components, indicates that, from an emerging markets perspective, the net remains full of holes despite recent stitches. This paper therefore proposes an effective and...

This paper shows that a large fraction of the variability of emerging market bond spreads is explained by the evolution of global factors such as risk appetite (as reflected in the spread of high yield corporate bonds in developed markets), global liquidity (measured by the international...

In this paper, we examine how the business and interest rate cycles in developed countries affect FDI to developing countries. After aggregating flows into three big source areas (the U.S., Europe and Japan), we find FDI flows to be countercyclical with respect to both output and interest rate...

In recent years, Latin American banking sectors have experienced an accelerated process of concentration and foreign penetration that has prompted diverse views regarding its implications for the competitive behavior of banks and for the financial stability of the system as a whole. Exploiting a...

The role of regional integration agreements (RIAs) as a determinant of the location of Foreign Direct Investment (FDI) has become an increasingly relevant issue for emerging economies. While the concerns regarding the impact of RIAs on FDI for countries in Latin America may be related to a...

In this paper, the authors discuss in detail a number of channels through which RIA could affect the location of FDI. In addition to clarifying the main effects at play, this conceptual discussion should help lay down a roadmap for the empirical exercises that follow. First, a brief stylized...

The role of regional integration agreements as a determinant of the location of FDI has become an increasingly relevant issue for emerging economies. In Latin America, the largest effects are likely to be associated with the Free Trade Area of the Americas (FTAA). In this regard, there are a...