Financing foreign trade and the lost decade of Latin America
Keywords:
Keywords, Trade finance, Debt crisis, Financial crisesAbstract
The "Great Recession" has renewed the interest of economists on the link between trade finance, foreign trade and economic growth. Researchers have found that the effects of the drop in export credit explains the sharp drop observed in the international trade after the crisis of 2008. In this framework, this article proposes to examine the "lost decade" of Latin America during the debt crisis as a historical comparative example. In the years that followed the Mexican default of 1982 and that of other Latin American countries, access to international credit in the region was severely limited, especially that destined to finance imports. However, the implementation of the debt renegotiation strategy allowed to keep some lines of credit open to trade with Latin America, which in many cases served to finance the importation of intermediate goods and capital needed for local production. The official export agencies and the adherence to the IMF adjustment programs were determining factors in accessing this type of external financing.Downloads
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