Latin America's new economic model: Micro responses and economic restructuring

This paper introduces a special issue on the microeconomics of Latin Americ a under the New Economic Model (NEM). The paper reviews the rationale and p olicies of the NEM, and analyzes the impact of the reforms at the macroecon omic, sectoral and microeconomic levels. At the firm level, the contributio ns to this issue demonstrate that a considerable adjustment process is taki ng place. As sectoral structural change indices demonstrate, however, this has not resulted in widespread shifts of resources between sectors, nor has it resulted in significant improvement in overall employment, productivity , and growth. The authors analyze the reasons for this disjuncture, and sug gest policy alternatives. (C) 2000 Elsevier Science Ltd. All rights reserve d.