The recent surge in inflation has posed significant challenges to macroeconomic management in Latin America. This paper empirically analyzes the factors driving inflation dynamics in the region post-COVID, highlighting key differences from previous episodes and advanced economies. The analysis aims to address the following questions: First, what are the recent empirical trends in inflation dynamics in Latin America, and how do they compare with those in advanced economies? Second, what factors drove inflation in Latin America during the recent episode, and how do these drivers compare with those in advanced economies? Specifically, what roles did inflation expectations, exchange rate depreciation, demand pressures, and global supply disruptions play in the rise of inflation in Latin America? Third, what role has monetary policy played during the COVID period and beyond? To what extent does the inflation response to economic policy in Latin American economies differ from that observed in advanced economies?
Authors
- Acknowledgements and disclosures
- Wlasiuk is Head of the International Research and Modeling Unit at the Central Bank of Chile. The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. Other than the aforementioned, the authors are not currently an officer, director, or board member of any organization with a financial or political interest in this article.
- Pages
- 59
- Published in
- United States of America
Table of Contents
- Inflation_Latam_Medina_&_Wlasiuk_Sep2024 (1).pdf 1
- Introduction 2
- Inflation Patterns in Latin America 4
- Inflation in Latin America over the Past Decades 5
- Major Latin American countries during COVID 9
- Driving Factors of Inflation in Latin America 19
- Monetary Policy Reaction in Latin America 28
- Final Remarks 35
