IMF Working Papers

The Macroeconomic Effects of Structural Reforms in Latin America and the Caribbean

By Antonio David, Takuji Komatsuzaki, Samuel Pienknagura

September 25, 2020

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Antonio David, Takuji Komatsuzaki, and Samuel Pienknagura. The Macroeconomic Effects of Structural Reforms in Latin America and the Caribbean, (USA: International Monetary Fund, 2020) accessed November 23, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper estimates the macroeconomic effects of structural reforms in Latin America and the Caribbean (LAC) using the dataset constructed by Alesina et al. (2020). We find that large changes in the reform index have positive effects on GDP and employment that reach 2 percent after 5 years. Furthermore, reforms boost investment, exports, imports, and reduce export concentration, in addition to favoring tradable sectors. Nonetheless, the results also indicate that the effects of reforms have not been uniform across different segments of the population. These findings bring to the forefront the need to consider accompanying policies to ensure that reforms promote inclusive growth. Moreover, evidence from country case studies using the synthetic control method point to heterogeneous effects of reforms on income per capita.

Subject: Commodity markets, Employment protection, Financial markets, International trade, Labor, Macrostructural analysis, Production, Structural reforms, Total factor productivity, Trade liberalization

Keywords: Caribbean, Central America, Commodity markets, Employment protection, Employment protection reforms index lead, Finance reform, Financial market reform, Global, Latin America, Liberalization, Macroeconomic Effects, Product market, Product market reform, Reform, Reform agenda, Reform convergence, Reform effort, Reform episode, Reform impetus, Reform index, Reform reversal, Reforms index lead, South America, Structural reform, Structural reforms, Total factor productivity, Total factor productivity, Trade liberalization, Trade reform index, WP

Publication Details

  • Pages:

    32

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2020/195

  • Stock No:

    WPIEA2020195

  • ISBN:

    9781513557632

  • ISSN:

    1018-5941

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