http://cepr.net/publications/op-eds-columns/latin-america-s-commodity-bust-not-exactly
David Rosnick
NACLA Report on the Americas, Volume 48, Issue 3, September 19, 2016
Between 1998 and 2011, the price of goods and services exported by countries in Latin America and the Caribbean (LAC) grew much more rapidly than the price of goods and services imported by these same countries. Because of this, in 2011, countries in the region could trade the same exports for some 50 percent more in imports. The economic impact of this change in terms-of-trade (TOT) was notable: real income of the LAC countries grew some 8.4 percent.
This period coincided with a resurgence of growth across much of the region. However, the data suggests that countries across LAC met demand for non-export goods by increasing imports. That is, much of the terms-of-trade windfall was either saved or spent on imports rather than increasing domestic demand for local products. Favorable trade shocks have contributed very little to growth in LAC countries — perhaps one-quarter of one percentage point additional annual growth over the period, according to research carried out by the Center for Economic and Policy Research.
Read the rest of the article here at NACLA Report on the Americas.
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