IMF Working Papers

Economic Growth in Latin America

Author/Editor:

Jose De Gregorio

Publication Date:

July 1, 1991

Summary:

This paper studies growth determinants in 12 Latin American countries during the period 1950-85. In a simple growth accounting framework, the share of labor in income is found to be lower in the sample group than in developed countries, while factor productivity growth accounts for a larger proportion of growth in the fastest growing countries in the sample. Using panel data, macroeconomic stability is found to play, in addition to investment (physical and human), a crucial role in growth. To a lesser extent, growth is negatively correlated with government consumption and political instability. The terms of trade appear to have no significant effect on growth.

Series:

Working Paper No. 1991/071

Subject:

Balance of payments Foreign direct investment Government consumption Inflation International trade National accounts Prices Production Productivity Terms of trade