Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299436 
Year of Publication: 
2023
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1487
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
This paper assesses the vulnerability of Latin American and Caribbean (LAC) economies to external crises. It shows that while the average LAC economy has made significant strides to reduce vulnerability to crises to its historical minimum, there is still considerable room for improvement, compared to both advanced and non-advanced economies. When compared to other non-advanced economies, the average LAC economy displays a higher level of vulnerability, mainly due to slower improvements in portfolio composition and less accumulation of international reserves since 2000. Advanced economies have lower exposure to external risk factors and a structural resilience advantage to prevent exposure from leading to crises. This analysis highlights the need for LAC economies to focus more on enhancing their risk-mitigating strategies concerning the composition of their external portfolios and reserves accumulation, which will provide a stronger buffer against external shocks and promote overall economic resilience.
Subjects: 
External crisis
Financial crisis
External balance sheet
International reserves
Macroeconomic imbalances
External debt
Foreign direct investment
External Assets and Liabilities
JEL: 
F30
F34
G01
G15
H63
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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