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Latin American Growth in the 21st Century: The 'Commodities Boom' That Wasn't

Author

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  • David Rosnick
  • Mark Weisbrot

Abstract

Latin America's economic growth rebound in the 2000s is often attributed to a “commodities boom,” which implies that the region’s growth was stimulated by sizable increases in the price of commodity exports. This paper looks at whether the data support such a conclusion. It finds that there is no statistically significant relationship between the increase in the terms of trade (TOT) for Latin American countries and their GDP growth. There is, however, a positive relationship between the TOT increase and an improvement in the current account balance. It may be that this allowed countries to avoid balance of payments crises or constraints.

Suggested Citation

  • David Rosnick & Mark Weisbrot, 2014. "Latin American Growth in the 21st Century: The 'Commodities Boom' That Wasn't," CEPR Reports and Issue Briefs 2014-09, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2014-09
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    File URL: http://www.cepr.net/documents/terms-of-trade-2014-05.pdf
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    References listed on IDEAS

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    1. Mark Weisbrot & Stephan Lefebvre & Joseph Sammut, 2014. "Did NAFTA Help Mexico? An Assessment After 20 Years," CEPR Reports and Issue Briefs 2014-03, Center for Economic and Policy Research (CEPR).
    2. Juan A. Montecino, 2011. "Decreasing Inequality Under Latin America’s “Social Democratic” and “Populist” Governments: Is the Difference Real?," CEPR Reports and Issue Briefs 2011-22, Center for Economic and Policy Research (CEPR).
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    Cited by:

    1. Mark Weisbrot & Jake Johnston & Stephan Lefebvre, 2014. "The Brazilian Economy in Transition: Macroeconomic Policy, Labor and Inequality," CEPR Reports and Issue Briefs 2014-14, Center for Economic and Policy Research (CEPR).
    2. Vianna, Andre C. & Mollick, Andre V., 2021. "Threshold effects of terms of trade on Latin American growth," Economic Systems, Elsevier, vol. 45(4).
    3. Vianna, Andre C. & Mollick, Andre V., 2018. "Government size and openness: Evidence from the commodity boom in Latin America," Resources Policy, Elsevier, vol. 59(C), pages 318-328.

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    More about this item

    Keywords

    latin america; terms of trade; commodities boom;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E0 - Macroeconomics and Monetary Economics - - General
    • F - International Economics
    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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