Abstract
The management of real macroeconomic balances has shown to be a significant factor in explaining the growth performance and behavior of productive investment in emerging economies (EEs). The environment provided by macroeconomic policies to producers, including the “rightness” of macro-prices and the consistency between aggregate demand and potential GDP, have emerged as significant variables explaining the poor recent performance of LACs. Together with fiscal responsibility and prudential financial regulation, those variables conform a comprehensive set of real macroeconomic balances. In the present stage of globalization of financial volatility, capital flows have played, in emerging economies, a crucial role for the sustainability of those balances and their interplay with growth (Ffrench-Davis, 2005; Ocampo, 2005). Here we examine the macroeconomic policies implemented by Chile and Colombia since 1990, the successes and failures achieved, focusing in growth performance and macroeconomic sustainability.
We appreciate the valuable comments and suggestions of Guillermo Le Fort, Carlos Quenan, Heriberto Tapia, and other participants at two ECLAC Seminars in Santiago and at a technical meeting of G-24 in Geneva.
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© 2006 Economic Commission for Latin America and the Caribbean
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Ffrench-Davis, R., Villar, L. (2006). Real Macroeconomic Stability and the Capital Account in Chile and Colombia. In: Ffrench-Davis, R. (eds) Seeking Growth Under Financial Volatility. Palgrave Macmillan, London. https://doi.org/10.1057/9780230523036_4
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DOI: https://doi.org/10.1057/9780230523036_4
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