Balance of payments structure and dynamics in Latin American countries since 1990.

Abstract

The paper presents an overview of the balance of payments of a group of Latin American countries during the period 1990/2021. Balance of payment accounts and items are grouped and rearranged according to their role as a source or expense of foreign currency. On this basis, the first goal is to show the structure of foreign currency income and expenditure, in the long term, that is, for the three decades covered in the study. The data allows to discriminate the role of capital inflows and outflows, and income payments to foreign capital. The second goal is to investigate the evolution of foreign currency availability over time. Particular attention is paid to balance of payment crisis episodes. The methodology used allows an empirically based discussion of some of the main theoretical hypotheses about the balance of payments behavior in Latin America. Two main results are obtained. The first is that the inflow and outflow of foreign currency involved in capital movements has a greater incidence than trade imbalances as an origin of balance of payment crises. The second is that these capital movements do not represent a positive net contribution of foreign currency for the recipient economies in the long term.