Monetary policy, productivity and economic growth in Latin America, 1995-2020.

Authors

DOI:

https://doi.org/10.32826/reyf.v3i8.392

Keywords:

Monetary Policy, Public Expenditure, Differences in Differences, FDI, Productivity

Abstract

The article evaluates the impacts of monetary policy and the institutional framework on multifactor productivity and its effect on economic growth for a representative sample of Latin America in the period 1995-2020. Empirically, the hypothesis is tested, through staggered static estimates in Generalized Least Squares and Differences in Differences from panel data, that productivity and economic activity are limited by insufficient productive public spending combined with monetary restrictions and inadequate institutional frameworks to favour investment in research and development (R&D) and the use of technological spillovers derived from trade and foreign direct investment (FDI). The results confirm the hypothesis.

Author Biography

José Luis Hernández Mota, Universidad Autónoma Metropolitana-Azcapotzalco

Doctor en Ciencias Económicas. Profesor-Investigador Titular C del Departamento de Economía de la División de Ciencias Sociales y Humanidades de la Universidad Autónoma Metropolitana, Unidad Azcapotzalco. Investigador Nacional Nivel 1 del SNI. Sus líneas de investigación son Finanzas Públicas, Política Macroeconómica y Crecimiento y Desarrollo Económico. Entre las publicaciones se encuentran: 16 artículos publicados en revistas científicas arbitradas, 4 capítulos de libro, así como 2 artículos de divulgación. En el Sector Público ha laborado para las Secretarías de Energía y Gobernación en materia de Programación y Presupuesto y en Telecomunicaciones de México en el área de Auditoria.

References

Amiti, M, Itskhoki, O. & Konings, J. (2019). International shocks, variable markups, and domestic prices. The Review of Economic Studies, 86(6), 2356–2402. https://doi.org/10.1093/restud/rdz005

Aschauer, D.A. (1989). Is public expenditure productive? Journal of Monetary Economics, 23(2), 177–200. https://doi.org/10.1016/0304-3932(89)90047-0

Baqaee, D.R., Farhi, E. & Sangani, K. (2021). The supply-side effects of monetary policy. NBER Working Paper No 28435. http://www.nber.org/papers/w28345

Barro, R. (1990). Government spending in a simple model of endogeneous growth. Journal of Political Economy, 98(5, Part 2), S103-S125. https: doi:10.1086/261726

Bulmer, V. (1998). La historia económca de América Latina desde la independencia. México: Fondo de Cultura Económica.

Cerezo, V., & Landa, H. (2023). El teorema Stolper-Samuelson, brecha salarial y liberalización comercial: análisis comparativo de México y Estados Unidos, 1990-2020. Investigación Económica, 323(82), 105-131. https:doi:10.22201/fe.01851667p.2023.323.84380

Christiano, L.J., Eichenbaum, M. & Evans, C.L. (2005). Nominal rigidities and the dynamic effects of a shock to monetary policy. Journal of Political Economy 113(1). 1–45. https://doi.org/10.1086/426038

Coe, D., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39, 859-887. https:doi:org/10.1016/0014-2921(94)00100-E

Colciago, A. & Silvestrini, R. (2020). Monetary Policy, productivity, and market concentration. DNB Working Paper No. 685. https://www.dnb.nl/media/1z4bqeai/working-paper-no-685_tcm47.pdf

Evans, C L (1992). Productivity shocks and real business cycles. Journal of Monetary Economics, 29(2), 191–208. https://doi.org/10.1016/0304-3932(92)90012-Q

Galí, J (2015), Monetary policy, inflation, and the business cycle: An introduction to the New Keynesian framework and its applications, Princeton: Princeton University Press.

Joudis, A., Karavias, Y. & Sarafidis, V. (2021). A homogeneous approach to testing for Granger non-causality in heterogeneous panels. Empirical Economics, 60, 93-21. https://doi.org/10.1007/s00181-020-01970-9

King, R. & Rebelo, S. (1990). Public policy and economic growth: developing neoclassical implications. Journal of Political Economy, 98(5, part 2), S126–S150. https://doi.org/10.1086/261727

Kim, S., & Park, J. (2017). Foreing direct investment and international R&D spillovers in OECD countries revisited. Journal of Institutional and Theorical Economics, 173(3), 431-453. https:doi:10.1628/093245616X14664894246884 -

Liu, C., & Guo, Q. (2019). Technology spillover effect in China: the spatio temporal evolution and its drivers. Sustainability, 11(6), 1-14. https:doi:10.3390/su11061694

Loayza, N. (2016). La productividad como clave del crecimiento y el desarrollo en el Perú y en el mundo. Estudios Económicos, 31, 9-28. https://www.bcrp.gob.pe/docs/Publicaciones/Revista-Estudios-Economicos/31/ree-31-loayza.pdf

Lucas, R. (1988). On the mechanics of economic develovpment. Journal of Monetary Economics, XXII, 3-42. https:doi:10.1016/0304-3932(88)90168-7

Mankiw, G., Romer, D., & Weil, D. (1992). A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 407-437. https:doi:org/10.2307/2118477

Mayer, D. (2007). Subdesarrollo y globalización. Ensayos Revista de Economía, 26(1), 155-192. https://ensayos.uanl.mx/index.php/ensayos/article/view/113

Meier, M and T Reinelt (2020), Monetary policy, markup dispersion, and aggregate TFP. ECB Working Paper No 2427. https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2427~270138fffa.en.pdf?c039567689e08b686de1424240af5ee1

Monteiro, G. & Turnovsky, S.J. (2008). The composition of productive government expenditure. Indian Growth and Development Review, 1(1), 57–83. https://doi.org/10.1108/17538250810868134

Moran, P. & Queralto, A. (2018). Innovation, Productivity, and Monetary Policy. Journal of Monetary Economics. 93(1), 24-41. https://doi.org/10.1016/j.jmoneco.2017.10.006

OIT, (2022). Informe Regional Productividad. Transición digital, cambio tecnológico y poíticas de desarrollo productivo en AC: desafios y oportunidades. Lima: OIT, Oficina Regional para América Latina y el Caribe, 2022. 87 p. https://www.ilo.org/wcmsp5/groups/public/---americas/---ro-lima/documents/publication/wcms_847153.pdf

Perrotini, I. (2007). El nuevo paradigma económico. Economíaunam, 4(11), 64-82. https://www.redalyc.org/articulo.oa?id=363542892001

Pushak, T., Tiongson, E. & Varoudakis, A. (2007). Public finance, governance, and growth in transition economies: empirical evidence from 1992-2004. Policy Research Working Paper, No. WPS 4255. Washington, D.C.: World Bank Group. https://documents1.worldbank.org/curated/en/889191468162554821/pdf/wps4255.pdf

Reyes, G. (2000). Síntesis de la historia económica de América Latina, 1960-2000. Tendencias, 1(2), 1-34. https://revistas.udenar.edu.co/index.php/rtend/article/view/695

Romer, P. (1990). Endogenous Technological Change. Journal of Political Economy, 98(5, Part 2), S71-S102. https://doi.org/10.1086/261725

Roodman, D. (2009). How to do xtabond2: an introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86–136. https://journals.sagepub.com/doi/pdf/10.1177/1536867X0900900106

Van Pottelsberghe, B., & Lichtenberg, F. (2001). Does foreign direct investment transfer technology across borders? The review of economics and statistics, 83(3), 490-497. https://www.jstor.org/stable/3211549

Downloads

Published

2025-11-24

Issue

Vol. 3 No. 8 (2025): Revista de economía y finanzas (May - August 2025)

Section

Articles

License

Those authors who have publications with this journal accept the following terms:

  1. The authors will retain their copyright and guarantee the journal the right of first publication of their work, which will be simultaneously subject to the Creative Commons Recognition License that allows third parties to share the work whenever its author is indicated and its first publication is this magazine.
  2. Authors may adopt other non-exclusive licensing agreements for the distribution of the published work (eg, deposit it in an institutional telematic file or publish it in a monographic volume) whenever the initial publication is indicated in this magazine.
  3. Authors are allowed and advised to disseminate their work through the Internet (eg in institutional telematic files or on their website) before and during the submission process, which can produce interesting exchanges and increase the citations of the published work. (See The effect of open access ).