Back to the Future: Latin America’s current development strategy Esteban Pérez Caldentey and Matías Vernengo

Empirical evidence suggests that the good economic performance of Latin America in the last 6 years (including 2007-8) is increasingly and strongly correlated either with a positive terms-of-trade shock, mostly in South America, or with the increase in the flow of remittances, particularly in Central and North America.  In other words, Latin America now exports commodities and people.  The paper shows the possible limitations of this development strategy.

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