Four years ago, when what would become the worst crisis in 80 years was just a concern for the important but encapsulated US mortgage market, academics and practitioners were debating whether the emerging world, which showed no signs of weakening as the developed world sunk into recession, had entered a new age of real (business cycle) ‘decoupling’. Twelve months later, the synchronised collapse of the global economy put to rest these aspirations of economic autonomy.
Latin America, despite showing a more robust macroeconomic resilience during current stressful events, has still had its fair share of mood swings. In mid-2008, the challenge was how to contain inflationary pressure of an overheated economy. In 2009, the slowdown was equal or deeper than in other regions in the world. The growing ties with emerging Asia (particularly, China) were not enough to disable the systemic implosion.