Latin America’s Access to International Capital Markets: Good Behavior or Global Liquidity?

Latin the States gained independence in early 19th century. From that meter on, it showed active connection in worldwide business endeavors through borrowings. The active participation of Latin the States in world(prenominal) capital markets started when independence wars emerge in the history of the region. The series of borrowings by Latin America to international capital markets was stopped when several Latin American countries defaulted in its payments.Hence, international markets disappe atomic number 18d to begin with the Latin American countries as a source financial aid. In the year 1970, Latin America participated again in having irritate to international capital markets. But, that participation became short-lived due to the fact that Mexico defaulted in its financial obligations with international capital markets. As a result, all Latin American countries lost access to international borrowings.There are deuce-ace main suspicions that trigger the peoples minds in s inging to the seek study. The basic question is anchored on whether or not the erratic international capital markets reach the boom-bust strain in Latin Americas participation in international borrowings. The second question is posed on whether or not the volatile nature of Latin Americas economies caused the boom-bust pattern in Latin Americas participation in international borrowings.And the third question pertains to whether or not international primary gross issuance is vital to Latin Americas stinting condition. In line with that, a collection of issuance data for twenty Latin American countries was stainless which resulted to the discovery of three groups of typical economies. The first group of typical economies pertains to those Latin American countries with active participation in international capital markets which include Argentina, Brazil, Chile, Columbia, Mexico, and Venezuela (Fostel & Kaminsky, 2007, p. ). The second group of typical economies is wizard with mor e limited access to intentional borrowings which is composed of Bolivia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Panama, Peru, and Uruguay (Fostel & Kaminsky, 2007, p. 1). The third group of typical economies is one without participation in international markets and with no international issuance bond and equity which is composed of Haiti, Nicaragua, and Paraguay (Fostel & Kaminsky, 2007, p. 1).The first group is the focus of the research study for the purpose of examining whether or not good behavior or global liquidity is the cause of the boom-bust pattern of Latin Americas participation in international capital markets business activities. Basically, the research paper revolves around the explanation on Latin Americas access to international markets. The doing of the trade account and the development of financing in soaring, average, and stumpy income countries are discussed with clarity.Besides, the skillful presentation about the evolution o f transfers involving official and private capital flows is apparent. The in-depth discussion about the three international capital markets like bonds, equity and syndicated loans of which some Latin American countries gained access provides readers the necessary companionship about the topic. The data presented by the researchers with respect to international gross issuance among the countries that belongs to the first typical economies is recyclable in understanding the development of the participation of Latin America in international capital markets.Hence, the research paper is successful in giving complete and reliable information regarding Latin Americas access to international borrowings. Finally, global liquidation may be considered vital to access in international capital markets for Latin American countries, but still good behaviors matters most. This fact was exemplified by the positive slaying of Argentina, Brazil, and Chile in terms of financial obligation payments d uring the 1990s (Fostel & Kaminsky, 2007, p. 1). The result of such superior performance is eventual macroeconomic stabilization.