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Latin America, With Few Bullets to Spare

March 18, 2020

BUENOS AIRES – At a moment when advanced economies are debating whether to fund ambitious fiscal packages with zero-interest rate Treasury debt or central bank (“helicopter”) money, we in Latin America feel like the heroes in John Ford´s classic 1930s Western film Stagecoach:

Surrounded by enemies, and with precious few fiscal bullets to spare.

Indeed, emerging economies have suffered the double shock of a flight-to-quality increase in financial costs and a commodity price decline that narrows the room for fiscal policy to respond. Stimulus is absolutely necessary,...

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