0 hardbackThis book is printed on paper suitable for recycling and made from fully managed and sustained forest sources.A catalogue record for this book is avaitable from the British Library.
Library of Congress Cataloging-in-Publication DataSeeking growth under financial volatility / edited by Ricardo Ffrench-Davis. p. cm. Includes bibliographical references and index. ISBN 1 -4 0 3 9 -9 6 3 5 -0 (cloth) 1
Foreword by José Luis MachineaThis volum e deals with m acroeconom ic issues and their relation to economic growth. It belongs to a line of research developed by ECLAC during recent years on the globalization of financial volatility, macroeconomic m anagem ent, and growth. This line of research has been encouraged by the frustrating GDP growth of Latin American econom ies since the 1980s. Even disregard ing the so-called lost decade resulting from the debt crisis, in the subse quent period 1990-2004 growth averaged a disappoin tin g 2.6% per year. One policy area associated to that outcom e has been a short legged m acroeconom ic environm ent, detrim ental for both capital and labor performance. It has been dom inated by highly unstable aggregate dem and and m isaligned exchange rates, frequently far away from trend levels. These im ply an "unfriendly" environm ent for investm ent decisions, com m only with "wrong" prices for an efficient resource allo cation. Our purpose in this volum e is to analyze policy m easures that contribute to avoid costly m istakes and to recover econom ic growth. We build on the reform s already m ade, m aking reforms to the reforms when necessary. We seek to achieve a macroeconomics-for-growth, or real macroeconomics.This new book is the result of a research project coordinated by ECLAC, supported by the Ford Foundation, on M anagem ent o f Volatility, Financial Globalization and Growth in EEs, studying the gesta tion and bust of the Asian crises and the contagion experienced by Latin America. Additionally, the country cases of Korea and M alaysia in East Asia under the Asian crisis, and of South Africa in the post apartheid period were analyzed. These three countries exhibit features that make them especially relevant.Capital flows have been at the core of the financial crises, m acro instability and, in general, the poor growth perform ance of EEs in recent tim es. The dem and for "accoun tability" has grown recently, activated by the fact that, in the last seven-year period (1998)(1999)(2000)(2001)(2002)(2003)(2004), Foreword xi the Latin American econom ies (LACs) grew only 1.7% per year on average and per capita GDP stagn ated.1 The growth perform ance of South Africa is also dism al, though the causes are more com plex than in Latin America. The six m ain East Asian countries perform ed som e what better over that period, with a 3.3% average GDP increase, where the Republic of Korea and M alaysia stand out as two dynam ic outliers. This average is, however, well below the 7 or 8% rates of their previous historical performance. In both regions, real m acroeconomic instabili...