To position COVID-19 in the taxonomy of shocks that have hit Latin America over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present using data and projections from the IMF (2023) ...
Third, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.. . In this paper, we compare the recessions triggered by COVID-19 to the various negative shocks that have hit Latin America over the past 100 years ...
In 2020, GDP per capita fell by nearly 8 percent at the regional level, and considerably more in various countries. Over the past 100 years, Latin America has endured several macroeconomic shocks, but none has been so deep and synchronized ...
The COVID-19 economic crisis was Latin America's largest annual contraction of GDP per capita in history. ...
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.. . In this paper, we compare the recessions triggered by COVID-19 to the various negative shocks that have hit Latin America over the...
top... position COVID-19 in the taxonomy of shocks that have hit Latin America over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present using data and projections from the IMF (2023).
topIn turn, these can be found by analyzing the longest possible time series for the largest possible number of countries (Urs a 2011).. . To position COVID-19 in the taxonomy of shocks that have hit Latin America over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present...
topIn the historic sample of countries listed in Table 1, only three other countries saw rare disasters associated to the pandemic: Philippines (-10.7 percent), Spain (-11.8 percent), and the UK (-11.4 percent), all between 2019-2020.
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.
top... increases the risk of "lost decades" for various countries and further distances Latin America from other regions.. . In this paper, we compare the recessions triggered by COVID-19 to the various negative shocks that have hit Latin America over the past 100 years.
top... over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present using data and projections from the IMF (2023).
topThe COVID-19 economic crisis was Latin America's largest annual contraction of GDP per capita in history.
topTo position COVID-19 in the taxonomy of shocks that have hit Latin America over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present using data and projections from the IMF (2023)
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.
topThe COVID-19 economic crisis was Latin America's largest annual contraction of GDP per capita in history.
topIn 2020, GDP per capita fell by nearly 8 percent at the regional level, and considerably more in various countries. Over the past 100 years, Latin America has endured several macroeconomic shocks, but none has been so deep and synchronized
topTo position COVID-19 in the taxonomy of shocks that have hit Latin America over the past 100 years, we exploit available historical data on GDP per capita since at least the early 20th century (Barro and Urs a 2008), extended to the present...
topIncluding uninterrupted periods that end in 2020, four countries in our sample experienced a macroeconomic disaster during this period (defined as cumulative declines in GDP per capita by 10 percent or more): Argentina, Mexico, Peru and Venezuela
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions
topThe concept emanated from the experience of economic stagnation in Japan in the 1990s, but the experience it describes has been observed in many other countries, including Latin America in the 1980s
topThe concept emanated from the experience of economic stagnation in Japan in the 1990s, but the experience it describes has been observed in many other countries, including Latin America in the 1980s
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries.
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
topWhile sometimes related to global events, like COVID-19, most of Latin America's disasters are of its own making. Latin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0...
topThe ranking also shows that Latin America's rare disasters have often happened independently of global events.
topLatin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's fall by 73.6 percent from 1943 through 1946.
topLatin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's fall by 73.6 percent from 1943 through 1946
topWhile sometimes related to global events, like COVID-19, most of Latin America's disasters are of its own making. Latin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's fall by 73.6 percent from 1943 through...
topA key concern regarding the COVID-19 shock is that it has likely plunged Latin America into another lost decade. The concept emanated from the experience of economic stagnation in Japan in the 1990s, but the experience it describes has been observed in many other countries, including Latin America in the 1980s
topA key concern regarding the COVID-19 shock is that it has likely plunged Latin America into another lost decade. The concept emanated from the experience of economic stagnation in Japan in the 1990s, but the experience it describes has been observed in many other countries, including Latin America in the 1980s
topIn contrast, COVID-19 led to sharp recessions in other regions, but it paled in comparison to their worst disaster experiences during the 20th century.
topIncluding uninterrupted periods that end in 2020, four countries in our sample experienced a macroeconomic disaster during this period (defined as cumulative declines in GDP per capita by 10 percent or more): Argentina, Mexico, Peru and Venezuela
top. The COVID-19 shock imposed additional strains on Latin America because of its simultaneity. Most crises of the 20th century hit the region's economies idiosyncratically
top. The COVID-19 shock imposed additional strains on Latin America because of its simultaneity. Most crises of the 20th century hit the region's economies idiosyncratically.
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).
topRecurrent lost decade episodes since then, plus a significant number of disaster shocks, have left the Venezuelan economy in a state of collapse. In 1905, Venezuela had 55 percent of the average GDP per capita of the Latin America aggregate; but today it has 37 percent
topRecurrent lost decade episodes since then, plus a significant number of disaster shocks, have left the Venezuelan economy in a state of collapse. In 1905, Venezuela had 55 percent of the average GDP per capita of the Latin America aggregate; but today it has 37 percent
topLatin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's fall by 73.6 percent from 1943 through...
topAll in, we find that about 30 percent of Latin America's rare GDP disasters in our sample have happened in the midst of large global interest rate increases.
topPost-World War II era, which we define simply as beginning after 1950 (excluding prior tumultuous global events and the immediate aftermath of World War II). . . As mentioned before, Latin America's top macroeconomic disaster Venezuela's 2008-2020 experience, with a cumulative decline by 73 percent...
topIn turn, the probability of moving from a state of disaster to a state of normalcy turns out to be 28 percent for Latin America, which roughly coincides with the global figure.
topThe speed and magnitude of Venezuela's economic collapse is unprecedented. It matches the worst economic disaster of any country in our sample (not only Latin America) in more than 100 years
topThe speed and magnitude of Venezuela's economic collapse is unprecedented. It matches the worst economic disaster of any country in our sample (not only Latin America) in more than 100 years
topRecurrent lost decade episodes since then, plus a significant number of disaster shocks, have left the Venezuelan economy in a state of collapse. In 1905, Venezuela had 55 percent of the average GDP per capita of the Latin America aggregate; but today it has 37 percent
topPost-World War II era, which we define simply as beginning after 1950 (excluding prior tumultuous global events and the immediate aftermath of World War II). . . As mentioned before, Latin America's top macroeconomic disaster Venezuela's 2008-2020 experience, with a cumulative decline by 73 percent matches the world's largest disaster ever recorded
topPost-World War II era, which we define simply as beginning after 1950 (excluding prior tumultuous global events and the immediate aftermath of World War II)
topThere is a clear connection between macroeconomic rare disasters and lost decades in Latin America. All but one of the lost decade episodes involve at some point in their timespan a rare disaster.
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries.
topThis is the single largest year-over-year decline in Latin America's GDP per capita since at least the early 20th century and the largest yearly drop compared to the most important global regional aggregates.
topIn fact, Latin America's GDP per capita in 2019 was nearly 5 percent lower than it was in 2013. This contrasts with the rest of global aggregates, all of which saw robust expansions during the 2010s.
topThis is the single largest year-over-year decline in Latin America's GDP per capita since at least the early 20th century and the largest yearly drop compared to the most important global regional aggregates
topThe Great Depression is related to many disasters in the region, but not the two world wars (especially not World War II, which at a global level is related to some of the largest disasters on record).
topIn turn, the probability of moving from a state of disaster to a state of normalcy turns out to be 28 percent for Latin America, which roughly coincides with the global figure. In sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
topIn turn, the probability of moving from a state of disaster to a state of normalcy turns out to be 28 percent for Latin America, which roughly coincides with the global figure. In sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
topIn turn, the probability of moving from a state of disaster to a state of normalcy turns out to be 28 percent for Latin America, which roughly coincides with the global figure. In sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
topThe average yearly growth forecasted over that last period has been declining given various shocks started in 2022, and currently sits at 2.0 percent (compared with an average of 0.7 percent in the decade prior to COVID)
topThe lower table in Figure 2 shows key statistics by region. With an average growth of 1.7 percent, Latin America ranks second-to-last compared to other historical aggregates.
topDespite the region's familiarity with recurrent financial crises, these had mostly occurred in specific countries at differentiated times Chile in 1973, Brazil in 1990, Mexico in 1995, or Argentina in 2001.
top... it started at more advanced stages of development, as theories of growth convergence predict.10 In fact, Latin America has underperformed compared to richer nations (even the aggregate for "Western Europe" managed to grow faster than Latin America from 2011-2019).
topDespite the region's familiarity with recurrent financial crises, these had mostly occurred in specific countries at differentiated times Chile in 1973, Brazil in 1990, Mexico in 1995, or Argentina in 2001
top... yearly growth forecasted over that last period has been declining given various shocks started in 2022, and currently sits at 2.0 percent (compared with an average of 0.7 percent in the decade prior to COVID).
topIn the next paragraphs we put everything together and analyze what we consider to be the most salient episodes of the last century's economic performance in the region.
topIf anything then, the post-World War II period casts Latin America's economic performance in an even less favorable light compared to other regions.
topIn the next paragraphs we put everything together and analyze what we consider to be the most salient episodes of the last century's economic performance in the region.
topIn the next paragraphs we put everything together and analyze what we consider to be the most salient episodes of the last century's economic performance in the region
top. . . Section 3: Differing country-specific outcomes. The history of economic collapses in Latin America is unfortunately extensive; but there are important differences at the country level
topTragically, Venezuela's macroeconomic collapse matches the largest contraction registered by any country in modern history. In addition, Argentina, Brazil, Mexico, and Venezuela, together with the Latin America regional aggregate, are undergoing "lost decades" (prolonged periods of...
topLatin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's fall by 73.6 percent from 1943 through 1946
topAccordingly, the rest of the world has done significantly better at avoiding disasters in recent decades compared to Latin America. . . At the country level, the two contrasting experiences of Uruguay and Colombia are illustrative of intra-regional heterogeneity.
top... suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability to weather a variety of additional shocks emerging in 2022.
topLatin America will have suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability to weather a variety of additional shocks emerging in 2022
top... 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability to weather a variety of additional shocks emerging in 2022.
topLatin America will have suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability to weather a variety of additional shocks emerging in 2022
topLatin America will have suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability...
topFourth, in a state of global commotion, local policy mistakes are less noticeable, and may go uncorrected; for example, misguided approaches to dealing with the pandemic itself or the lack/excess of fiscal response
topFourth, in a state of global commotion, local policy mistakes are less noticeable, and may go uncorrected; for example, misguided approaches to dealing with the pandemic itself or the lack/excess of fiscal response
topFourth, in a state of global commotion, local policy mistakes are less noticeable, and may go uncorrected; for example, misguided approaches to dealing with the pandemic itself or the lack/excess of fiscal response
top... policy mistakes are less noticeable, and may go uncorrected; for example, misguided approaches to dealing with the pandemic itself or the lack/excess of fiscal response. Altogether, and even if to varying extents across Latin American countries, these issues made the COVID-19 crisis worse than it would have been in isolation
topAltogether, and even if to varying extents across Latin American countries, these issues made the COVID-19 crisis worse than it would have been in isolation.
topFourth, in a state of global commotion, local policy mistakes are less noticeable, and may go uncorrected; for example, misguided approaches to dealing with the pandemic itself or the lack/excess of fiscal response
topThe eight Latin American countries are Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, and Venezuela. Because COVID-19 is the materialization of a prototypical rare disaster a low probability event with severe macroeconomic consequences our analyses require taking the broadest possible perspective in time and space
topIn fact, by this metric, both Chile and Colombia would have also crossed the disaster threshold due to COVID-19 in 2020.
topMoreover, despite Latin America's familiarity with recurrent crises, these had mostly occurred in specific countries at differentiated times. Instead, COVID-19 imposed additional strains on the region because of its simultaneity, to an extent the region had not ever experienced before
topThe table presents the largest peak-to-trough GDP per capita declines found in our historical sample of countries, together with indicators characterizing these events along seven non-exclusive dimensions depending on whether the disaster can be...
topThe table presents the largest peak-to-trough GDP per capita declines found in our historical sample of countries, together with indicators characterizing these events along seven non-exclusive dimensions depending on whether the disaster can be associated with:.
top... long Revolutionary war period that officially ended until 1920, so the 1909-1915 disaster may be related to it. In any case, outside of these three countries, the region had been mostly spared the GDP growth impact from pandemics until COVID-19 happened.7.
topThe table presents the largest peak-to-trough GDP per capita declines found in our historical sample of countries, together with indicators characterizing these events along seven non-exclusive dimensions depending on whether the disaster can be associated with:
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
top... fall into a state of disaster, but their probability of recovery per year is the same as for other countries.. . Latin American rare disasters are also special in being less likely to be associated to wars than they have been for other regions.
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries.
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries.. . Latin American rare disasters are also special in being less likely to be associated to wars than they have been for other regions
topThe eight Latin American countries are Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, and Venezuela. Because COVID-19 is the materialization of a prototypical rare disaster a low probability event with severe macroeconomic consequences our analyses require taking the broadest possible perspective in time and space
topThe eight Latin American countries are Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, and Venezuela. Because COVID-19 is the materialization of a prototypical rare disaster a low probability event with severe macroeconomic consequences our analyses require taking the broadest possible perspective in time and space
topIn a more localized fashion, Chile, Mexico, and Uruguay all saw GDP per capita disasters around the time of the Great Influenza Pandemic of 1918-20. None of the three countries were combatants in World War I, which is a likely confounding factor of crises found around that time in other countries (Barro, Urs a, and Weng 2022)
top... shows COVID-19 crises in the eight Latin American countries for which there are historical data, in the context of their previous "rare disasters." We follow the literature in defining these as peak-to-trough contractions in GDP per capita by 10 percent or more.
topThroughout the paper, we refer to GDP per capita data in real terms (based on constant international dollars). There are eight Latin American countries for which these series are available: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, and Venezuela
topFigure 4 shows COVID-19 crises in the eight Latin American countries for which there are historical data, in the context of their previous "rare disasters." We follow the literature in defining these as peak-to-trough contractions in GDP per capita by...
topAccordingly, COVID-19 coming immediately after the adjustment the region went through as a consequence of lower terms of trade effectively did plunge Latin America into what has already become the fourth lost decade episode in a century. . Figure 10 reproduces the exercise for the eight Latin American countries forming the historical aggregate
top... the adjustment the region went through as a consequence of lower terms of trade effectively did plunge Latin America into what has already become the fourth lost decade episode in a century. . Figure 10 reproduces the exercise for the eight Latin American countries forming the historical aggregate. All in, we find 26 episodes of lost decades, listed as follows (bold for episodes involving a rare disaster as discussed...
topThird, it compounds years of economic underperformance prior to the shock a factor that increases the risk of "lost decades" for various countries and further distances Latin America from other regions.. . In this paper, we compare the recessions triggered by COVID-19 to the various negative shocks that have hit Latin America over the past 100 years
topFigure 3 shows two ways to measure this from a statistical perspective. Panel A plots an indicator that accounts for the pervasiveness of negative growth rates and their depth in each year since we have full data for all countries
top... yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in years prior to 2020 mostly related to policy decisions and political developments.
topFigure 3 shows two ways to measure this from a statistical perspective. Panel A plots an indicator that accounts for the pervasiveness of negative growth rates and their depth in each year since we have full data for all countries.
topAcross countries, we find 30 episodes including ongoing ones in Argentina, Brazil, Mexico, and Venezuela. These episodes, and the weakening of growth trajectories in other countries, represent legitimate long-run risks for Latin America.
topOn the positive side, the shock can offer opportunities for a reset with the appropriate set of macroeconomic policies (Werner et al
topAnd in much better shape not entirely offsetting the drag from the previous four countries, but at least with positive average growth rates we find Chile, Uruguay, Peru, and Colombia.
topThe largest yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in years prior to 2020 mostly related to policy decisions and political developments
topAcross countries, we find 30 episodes including ongoing ones in Argentina, Brazil, Mexico, and Venezuela. These episodes, and the weakening of growth trajectories in other countries, represent legitimate long-run risks for Latin America.
top... endure a long Revolutionary war period that officially ended until 1920, so the 1909-1915 disaster may be related to it. In any case, outside of these three countries, the region had been mostly spared the GDP growth impact from pandemics until COVID-19 happened.7.
topThe largest yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in years prior to 2020...
topIn sum, Latin American economies are somewhat more likely than the average country to fall into a state of disaster, but their probability of recovery per year is the same as for other countries
topFortunately, these countries represented around 87 percent of the "Latin America and the Caribbean" aggregate commonly used by the IMF in 2022 with the rest of countries entailing smaller economies in the continent and the Caribbean
topMost crises of the 20th century hit the region's economies idiosyncratically. Instead, the COVID-19 shock was not only severe but also happened at the same time across countries
topFortunately, these countries represented around 87 percent of the "Latin America and the Caribbean" aggregate commonly used by the IMF in 2022 with the rest of countries entailing smaller economies in the continent and the Caribbean.
topMost crises of the 20th century hit the region's economies idiosyncratically. Instead, the COVID-19 shock was not only severe but also happened at the same time across countries.
topFortunately, these countries represented around 87 percent of the "Latin America and the Caribbean" aggregate commonly used by the IMF in 2022 with the rest of countries entailing smaller economies in the continent and the Caribbean
topHowever, if growth in 2019 and 2020 had been equal to the average over the 2011-2018 period (what we call the pre-peak trend), then the "true" disaster is larger by 2.6pp for a total decline of 12.6 percent
top... macroeconomic decline since 2008 not only ranks as the country's worst in recorded history since the 19th century, but also nearly matches the world's largest GDP disaster. The collapse of Venezuela's economy by 73.0 percent from 2008 through 2020 closely approximates Germany's fall by 73.6 percent from 1943 through 1946, the worst GDP disaster recorded in modern history (Barro and Urs a 2008)
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4. . . Contractions in Chile and Colombia were noticeably larger than in Brazil and Uruguay
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4. . . Contractions in Chile and Colombia were noticeably larger than in Brazil and Uruguay.
topFirst, the pandemic pushed some of the region's largest economies Argentina, Mexico, Peru and Venezuela into painful macroeconomic rare disasters, with contractions in GDP per capita of at least 10 percent. Tragically, Venezuela's decline matches the world's largest macroeconomic GDP disaster in modern history
topThe extent of its macroeconomic decline since 2008 not only ranks as the country's worst in recorded history since the 19th century, but also nearly matches the world's largest GDP disaster. The collapse of Venezuela's economy by 73.0 percent from 2008 through 2020 closely approximates Germany's fall by 73.6 percent from 1943 through 1946, the worst GDP disaster recorded in modern history (Barro...
topBrazil has had three lost decade episodes, "wasted" nearly 50 years before World War I where GDP per capita remained flat and has been undergoing a lost decade episode since 2013 (exceptional in not being directly related to a disaster)
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4
top. . Contractions in Chile and Colombia were noticeably larger than in Brazil and Uruguay.
top... Venezuela's economy by 73.0 percent from 2008 through 2020 closely approximates Germany's fall by 73.6 percent from 1943 through 1946, the worst GDP disaster recorded in modern history (Barro and Urs a 2008).
topHowever, if growth in 2019 and 2020 had been equal to the average over the 2011-2018 period (what we call the pre-peak trend), then the "true" disaster is larger by 2.6pp for a total decline of 12.6 percent
topWe now compare the COVID-19 shock to the historical record. Figure 2 ranks historical GDP per capita growth since 1905 for different country groups, with bands depicting plus and minus one standard deviation
topIn any case, outside of these three countries, the region had been mostly spared the GDP growth impact from pandemics until COVID-19 happened.7. . The ranking also shows that Latin America's rare disasters have often happened independently of global events
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4. . . Contractions in Chile and Colombia were noticeably larger than in Brazil and Uruguay
topAs a result, Argentina lost its place as the richest amongst the eight nations, while Uruguay remained second place (see Figure 11 Panel A). In addition, Argentina today has nearly the same GDP per capita it had 15 years ago, but Uruguay's has risen by more than 40 percent over the same period
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4.
topThe ongoing erosion of microeconomic and institutional foundations in Mexico and erratic macro and microeconomic policies in Argentina are good examples, as they have reduced potential growth and increased vulnerabilities to shocks
topFor example, as discussed before, Mexico's recent macro disaster reflects a nearly 10 percent decline in GDP per capita from 2018 through 2020
topThe ongoing erosion of microeconomic and institutional foundations in Mexico and erratic macro and microeconomic policies in Argentina are good examples, as they have reduced potential growth and increased vulnerabilities to shocks
topThe ongoing erosion of microeconomic and institutional foundations in Mexico and erratic macro and microeconomic policies in Argentina are good examples, as they have reduced potential growth and increased vulnerabilities to shocks
topThe ongoing erosion of microeconomic and institutional foundations in Mexico and erratic macro and microeconomic policies in Argentina are good examples, as they have reduced potential growth and increased vulnerabilities to shocks
top... year-over-year decline in Latin America's GDP per capita since at least the early 20th century and the largest yearly drop compared to the most important global regional aggregates. All the large economies in the region saw sharp recessions, with the minimum decline in GDP per capita at 4 percent
topThis is the single largest year-over-year decline in Latin America's GDP per capita since at least the early 20th century and the largest yearly drop compared to the most important global regional aggregates. All the large economies in the region saw sharp recessions, with the minimum decline in GDP per capita at 4 percent
topThis contrasts with the rest of global aggregates, all of which saw robust expansions during the 2010s. For example, the Asian aggregate's GDP per capita increased by nearly 30 percent over the same period that Latin America's was shrinking
topWhile sometimes related to global events, like COVID-19, most of Latin America's disasters are of its own making. Latin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008 through 2020 bordering Germany's...
topWhile sometimes related to global events, like COVID-19, most of Latin America's disasters are of its own making. Latin America matches the top position in the ranking of global GDP per capita disasters with Venezuela's 73.0 percent collapse from 2008...
topThis is the single largest year-over-year decline in Latin America's GDP per capita since at least the early 20th century and the largest yearly drop compared to the most important global regional aggregates
topFirst, the pandemic pushed some of the region's largest economies Argentina, Mexico, Peru and Venezuela into painful macroeconomic rare disasters, with contractions in GDP per capita of at least 10 percent.
topThis stands in stark contrast with wealthier economies, captured in our historical aggregate called "OECD," not to mention Asian economies, who fared significantly better.4.
topThe collapse of Venezuela's economy by 73.0 percent from 2008 through 2020 closely approximates Germany's fall by 73.6 percent from 1943 through 1946, the worst GDP disaster recorded in modern history (Barro and Urs a 2008)
top... country's worst in recorded history since the 19th century, but also nearly matches the world's largest GDP disaster. The collapse of Venezuela's economy by 73.0 percent from 2008 through 2020 closely approximates Germany's fall by 73.6 percent from 1943 through 1946, the worst GDP disaster recorded in modern history (Barro and Urs a 2008)
topIn Uruguay's case, the relative efficiency of health policy responses, trust in government, and ease of border closures probably helped its macroeconomic decline avoid the disaster threshold
topIn Uruguay's case, the relative efficiency of health policy responses, trust in government, and ease of border closures probably helped its macroeconomic decline avoid the disaster threshold
topIn contrast to those four cases, Brazil, Chile, Colombia, and Uruguay did not reach the threshold of a rare disaster during the COVID-19 pandemic, at least not in terms of GDP per capita declines4.
topHowever, the probability of a Latin American country transitioning from a state of normalcy to disaster is 5.9 percent per year somewhat higher than the global average. While sometimes related to global events, like COVID-19, most of Latin America's disasters are of its own making
topLatin America had not seen contemporaneous recessions of this magnitude in decades. . COVID-19 is a special shock in at least three ways. First, it is a natural disaster with severe economic consequences a type of shock not seen by the region since the Great Influenza Pandemic of 1918-20
topIt matches the worst economic disaster of any country in our sample (not only Latin America) in more than 100 years. .
topLatin America had not seen contemporaneous recessions of this magnitude in decades. . COVID-19 is a special shock in at least three ways
topColombia is the only country in our sample that has never experienced a macroeconomic rare disaster (although it came close to it during COVID-19.). Latin America will have suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability...
topIn Uruguay's case, the relative efficiency of health policy responses, trust in government, and ease of border closures probably helped its macroeconomic decline avoid the disaster threshold.
topWhile Brazil, Chile, Colombia, and Uruguay did relatively better with COVID-19, they still suffered significant recessions, and their economic performance has lost steam compared to prior decades.
topIf anything then, the post-World War II period casts Latin America's economic performance in an even less favorable light compared to other regions.. . COVID-19 was the worst yearly growth experience on record for Latin America
topThe COVID-19 pandemic drove the world economy to its worst recession in almost a century. Latin America was the region of the world most affected, both in terms of public health and economic outcomes
topIf anything then, the post-World War II period casts Latin America's economic performance in an even less favorable light compared to other regions.
topWhile Brazil, Chile, Colombia, and Uruguay did relatively better with COVID-19, they still suffered significant recessions, and their economic performance has lost steam compared to prior decades
topIf anything then, the post-World War II period casts Latin America's economic performance in an even less favorable light compared to other regions.
topThe COVID-19 pandemic drove the world economy to its worst recession in almost a century. Latin America was the region of the world most affected, both in terms of public health and economic outcomes.
topAlthough the region has endured several macroeconomic shocks before, mostly related to financial dislocations, none has been so deep and synchronized. Our analysis of the COVID-19 experience for the region and eight economies with available historical data reveals the extent of the damage
topAs discussed in the introduction, policy choices during the pandemic are important to explain the heterogeneous impact of COVID-19 on the economies of the region. The case of Venezuela is particularly lamentable
topThe extent of its macroeconomic decline since 2008 not only ranks as the country's worst in recorded history since the 19th century, but also nearly matches the world's largest GDP disaster.
topAlthough the region has endured several macroeconomic shocks before, mostly related to financial dislocations, none has been so deep and synchronized. Our analysis of the COVID-19 experience for the region and eight economies with available historical data reveals the extent of the damage
topThe extent of its macroeconomic decline since 2008 not only ranks as the country's worst in recorded history since the 19th century, but also nearly matches the world's largest GDP disaster.
topIn addition, Argentina, Brazil, Mexico, and Venezuela, together with the Latin America regional aggregate, are undergoing "lost decades" (prolonged periods of stagnation) which are unlikely to end soon
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).
top... identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).. . In the case of COVID-19, four contractions in 2020 combined with previous years of negative growth to properly classify as macroeconomic rare disasters
top... Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).. . In the case of COVID-19, four contractions in 2020 combined with previous years of negative growth to properly classify as macroeconomic rare disasters.
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).. . In the case of COVID-19, four contractions in 2020 combined with previous years of negative growth to properly classify as macroeconomic rare disasters
top... Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).. . In the case of COVID-19, four contractions in 2020 combined with previous years of negative growth to properly classify as macroeconomic rare disasters.
topIn the first case, it relates to unfavorable policy choices by the L pez Administration before and during the COVID-19 shock, while the second involved a turbulent transition from dictatorship to democracy
topIn the first case, it relates to unfavorable policy choices by the L pez Administration before and during the COVID-19 shock, while the second involved a turbulent transition from dictatorship to democracy.
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).. . In the case of COVID-19, four contractions in 2020 combined with previous years of negative growth to properly classify as macroeconomic rare disasters
top... largest yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in years prior to 2020 mostly related to policy decisions and political developments
topAltogether, we identify 53 GDP per capita disasters in Latin America: Argentina (10), Brazil (5), Chile (6), Colombia (none), Mexico (4), Peru (5), Uruguay (13), and Venezuela (10).
topThe largest yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in years prior to 2020 mostly related to policy decisions and political developments
topThe largest yearly contractions due to COVID-19 happened in Venezuela, Peru, Argentina, Colombia, and Mexico, which are also the countries with the largest cumulative contractions if we consider sequential negative growth rates in...
topHowever, the probability of a Latin American country transitioning from a state of normalcy to disaster is 5.9 percent per year somewhat higher than the global average
top... sample that has never experienced a macroeconomic rare disaster (although it came close to it during COVID-19.). Latin America will have suffered another lost decade in the 2013-2025 period due to the negative terms of trade shock, the COVID-19 shock, the unraveling of macroeconomic disequilibria in some countries, and the inability to weather a variety of additional shocks emerging in 2022
topSection 1: Introduction. The COVID-19 pandemic drove the world economy to its worst recession in almost a century. Latin America was the region of the world most affected, both in terms of public health and economic outcomes