Ideas to Action:

Independent research for global prosperity

Publications

 

December 14, 2017

Towards the Argentine Presidency in the G20: What Macro-Financial Challenges Does the Region Face and What Are the Implications for the Debate?

After the slowdown of the Chinese economy and the sharp decrease in commodity prices, the Latin American macroeconomic outlook has worsened substantially in relation to the boom that occurred between 2003 and 2012, despite favorable external conditions characterized by significantly high liquidity in international capital markets and a strong economic recovery in developed nations.

April 4, 2017

Latin America´s Policy Options for Times of Protectionism

A rise in protectionism and increased external uncertainty may compound already existing domestic weaknesses. Latin America cannot run the risk of being unprepared for the significant potential direct and indirect effects of such a menace to its exports, capital inflows and growth.

March 8, 2017

Expanding Global Liquidity Insurance through Precautionary Lending: What the IMF Can Do

In the wake of the global financial crisis, the IMF undertook a series of reforms to its lending facilities to manage volatility and help prevent future crises. The reforms included the adoption of two new lending instruments: the Flexible Credit Line (FCL), introduced in 2009, and the Precautionary and Liquidity Line (PLL), introduced in 2011. They are meant to serve as precautionary measures—effectively, as insurance—for member states with a proven track economic record. Yet, the IMF’s precautionary instruments remain underutilized.

February 28, 2017

Expanding Global Liquidity Insurance: Myths and Realities of the IMF’s Precautionary Credit Lines - Working Paper 449

This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). These myths are 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.

Latin American Currency, Photo Credit: Alex Prolmos
January 30, 2017

Latin America in a New Global Political and Economic Scenario: What Does It Mean for the Region?

Since mid-2016, a new wave of political developments in advanced countries has been shaking Latin America. This latest assessment of the Latin American Committee on Financial Issues (CLAAF) examines how the anti-globalist movement sweeping the West will affect macroeconomic trends in Latin America.