This paper documents important changes in real GDP growth of six large Latin American countries. The main results can be summarized as follows. First, there is evidence of a structural break in real GDP towards stronger mean growth and a substantial reduction in volatility. Second, the timing of the breaks suggests that the important changes in economic policies of the 1980s and 1990s have been effective in permanently improving economic growth in the region. Third, there is evidence of a positive and linear relationship between real GDP growth and the growth rate of commodity prices. As a result, the sustained increase in commodity prices observed in recent years explains an important share of growth in the region since 2003.

ACCESS PAPER