Today’s Information is Ammunition for Tomorrow


By Luis M. Cubeddu and Camilo E. Tovar

(Version in Español)

Many Latin American economies are booming due to strong inflows of capital and stronger export earnings from high commodity prices. Though favorable today, this situation is also a double-edged sword.

Households, companies, and banks are spurred to take on financial risk. But, if risks become excessive or poorly managed, they sow the seeds of future problems. The region has experienced firsthand the boom and bust cycles that can ensue, and there is consensus that this needs to be avoided or minimized in the future. The IMF’s two latest Regional Economic Outlooks for the region—published in May and October 2010—focused on precisely this issue.

While the bottom line is the need for effective macroeconomic policy management and implementation, information is an essential ingredient. Continue reading

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