Eliana A. Cardoso

Below the line: Poverty in Latin America

Abstract Despite gains in basic welfare indicators, poverty remains prevalent in Latin America. This paper surveys existing data on poverty in the region and discusses the relationship between growth, inequality and poverty. Given the inequality of income distribution in Latin America and the slow growth of output, policies to overcome poverty must involve more efficient allocation of government resources, redistribution and foreign aid.

Deficit finance and monetary dynamics in Brazil and Mexico

Abstract The paper develops a model of seigniorage in an open economy, linking inflation, the government budget and the external balance. It introduces financial markets and interest rates in the traditional Cagan style model of inflationary dynamics and it evaluates the experiences of Brazil and Mexico. The model relates inflation in the 1980s to interest payments on the external public debt. The paper also argues that inflationary finance has been combined with very fast growth of domestic debt, setting the stage in Brazil for unsustainable domestic debt growth in the Sargent-Wallace style. The Collor Plan stopped this process, temporarily.