2024

Working Paper - Link (English) - 2024

United States-Latin America and the Caribbean Trade Developments provides an overview of selected developments in trade relations between the United States and Latin America and the Caribbean.

Book - Link (Spanish) - 2024

The relationship between infrastructure and economic growth has been intensely studied since the 1990s without a clear consensus on its long-term impact. Recent literature suggests a positive effect, although there is considerable variability due to differences in the type of infrastructure analyzed, their measurement, and the control variables. This book analyzes five Latin American countries to estimate the impact of infrastructure on economic growth in both physical and monetary terms. The results show a positive and significant impact of infrastructure investment on growth, taking into account possible endogeneities and econometric challenges. Additionally, the book addresses topics such as the definition of infrastructure, measurement issues, green infrastructure, its relationship with inequality, and the resilience of critical infrastructures.

Journal Article - Link (Spanish) - 2024

Over the past fifty years, the economic growth in Mexico has been slow and volatile, partly due to the fluctuating evolution of gross fixed capital formation, which is affected by economic performance, especially during recessive periods. This study, covering the period from 1980 to 2020, finds a positive and statistically significant, though small, relationship between public infrastructure investment (PII) and the growth of the private sector GDP. At the sectoral level, positive effects of PII are found in all sectors except for energy. The results indicate that PII alone cannot sustain economic growth but should be part of a comprehensive long-term strategy that includes partnerships with national and foreign private investments.

Journal Article - Link (English) - 2024

This article investigates export competition between China and Latin America and the Caribbean (LAC) in the United States market between 2002 and 2022. Using a sample of 33 exporters and 10-digit Harmonised Tariff Schedule (HS) data, a structural gravity model is estimated. A first-order Taylor-series expansion à la Baier and Bergstrand (Journal of International Economics, 2009a, 77, 77) is used to approximate the multilateral price terms pointed out by Anderson and Van Wincoop (American Economic Review, 2003, 93, Article 1). The results show that the impact of Chinese exports on United States imports from LAC is negative and statistically significant across several model specifications, levels of aggregation, and sectors. A percentage increase in imports from China decreased imports from LAC by 0.75%. The displacement effect is 0.32 for manufacturing products, 1.01 for resource-based products, 1.33 when estimated only for South America, 0.25 for the Caribbean, and not significant for Central America.

Book Chapter - Link (Spanish) - 2024

This chapter analyzes the impact of the U.S.-China trade tensions on the displacement of LAC's exports by China in the U.S. market. Using an augmented gravity model of trade, the degrees of displacement before and since the beginning of trade tensions are estimated and subsequently investigated for structural breaks. The model features both non-linear and linear fixed effects specifications to account for endogeneity, zero trade flows, and multilateral resistance terms (MRTs). The LAC region is represented by thirty-three countries. The analysis makes contributions to three strands of literature. Firstly, the assessment of the impacts of the trade dispute on export competition adds to the literature on economic spillover effects following geopolitical tensions. Secondly, the estimation of the displacement effect contributes to the work on export competition between LAC and China in the U.S. market. Thirdly, the estimation strategy and gravity model results add to the wider augmented gravity model literature on Chinese export competition.