Presenter: Marika Santoro - Economist
Western Hemisphere Department
Latin America registered a significant reduction in inequality in the 2000s, especially relative to other regions in the world. During the same period, many Latin American countries experienced a commodity boom. We study the link between the two, examining the main channels by which commodity prices may affect inequality. We conduct empirical as well as a model-based analysis, finding that in many commodity exporters the boom can explain a significant portion (more than a third and up to two-thirds) of the inequality reduction, measured as a fall in the GINI coefficient. Symmetrically, the commodity bust that some countries have recently experienced might imply an adjustment characterized by increased inequality. We consider what policies can help mitigate the impact of the bust on the social progress made during the 2000s.
Moderator: John Bishop
Secretary’s Department
