"Why This Time Was Different? Latin American and the Global Financial Crisis" - Jose De Gregorio, Former Governor, Central Bank of Chile
José De Gregorio, professor of economics at the Universidad of Chile and former governor of the Central Bank of Chile, delivered a public talk at the Woodrow Wilson School on Wednesday, April 24, 2013. His talk was titled, “Why this Time was Different? Latin America and the Global Financial Crisis.” The discussion was cosponsored by the Woodrow Wilson School and the Julis-Rabinowitz Center for Public Policy and Finance (JRC).
De Gregorio showed that unlike past crisis (the debt crisis of the 1980s and the Asian crisis of the mid 1990s), where Latin America performed significantly worse than the advanced economies, this time, Latin America out-performed the developed world. De Gregorio argues that this positive outcome is the result of good monetary and fiscal policies, exchange rate flexibility, strong and well regulated financial system, high levels of foreign reserves and some good luck (favorable terms of trade -- high commodity prices). However, he sees no room for complacency as there are a number of risks on the horizon. The major risk is a decline in terms of trade, other risks are continued social exclusion and growing inequality that could lead to populism which would not be the right approach to Latin America's challenges.