A Monetary and Fiscal History of Latin America, 1960–2017 Paperback – January 11, 2022

A brilliant work, presenting useful data in a clear format that is very useful for creating sound fiscal policy for our own nation. It's especially refreshing seeing a project that spans so much time in parallel with a large number of countries.

This is an outstanding source to get a grasp on the main macroeconomic variables for the largest economies in Latin America. The book is a collaborative effort, with a team of economists writing the chapter on their respective countries. Each chapter is followed by one or two short comments by other economists, which may point limitations of the work, disagreement with the conclusions or simply indicate where would be desirable to increase the amount of detail of the analysis. Every chapter is structured around Sargent’s budget constraint view of the government, and then provides a detailed view of the sources and uses of government budget in the last sixty years.Having studied the topic while majoring in economics and remaining interested in it thereafter, I have a considerable degree of familiarity with the main conclusions for my country, but I must admit that, even considering this, the analysis of Brazil added a lot of new material for me, both in the text as well as in the rich bibliography provided. As such, despite some obvious variation in the degree of quality among the countries’ chapters, I believe this book is an incredible introduction to macroeconomic history for the countries contained therein. I learned tremendously about the other countries (which shamefully we don’t even get a glimpse during our education) and was very surprised (but maybe shouldn’t?) that virtually all countries listed here suffered from the same problems, despite different intensities and with local “flavors”.Regarding the conclusions presented, it seems rather unequivocal that Latin America was deeply affected by the inability of governments to run a balanced budget: while not a sufficient condition for catching up with the United States in terms of wealth, it can certainly be listed as a necessary one for economic development. Instead of tackling expenditure or raising more revenues, countries often resorted to debt monetization and off budget expenditures through state companies and banks. It’s surprising to see how off-balance fiscal results were very meaningful to all countries listed, suggesting an inability (or unwillingness) to face budget constraints in the political arena. One can also see the perverse effects of unorthodox stabilization plans, again and again deployed across the region.Finally, it hardly seems to be a coincidence that the richest countries in the region, the one’s that pulled forward the most during the period, are all rather “early” in creating economic institutions. In addition to the common language, Chile, Colombia, and Mexico all have independent central banks for at least 30 years, have created laws to curb government spending and/or adjust it to cyclical components for 20 years and have moved to less government intervention and off budget spending. A general aspect that could have been more detailed here is how government microeconomic policies may have contributed to resource misallocation and lower productivity, which may have enhanced the imbalances discussed in the book.Some aspects praise here: the application of a single framework of analysis to all countries and to an extensive period offers very rich insights regarding the common levers that governments deployed against internal conditions and external. The broad usage of graphs and tables also helped in understanding, something that frequently books dealing with economic history forget to use more widely. Finally, the extensive notes, bibliography and databases provided at the end of each chapter help immensely readers that wants to delve deeper into the topics.

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