Latin America's enormous endowment of natural resources impacts many countries of the region. Economic liberalization in several countries was followed by rapid growth of foreign investment and exports of natural resource-intensive products. Growth of labor-intensive manufacturing industries was...

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...