The fiscal debate in the United States has become a recurrent issue that keeps the world, and Latin America and Caribbean economies in particular, in suspense. The agreement reached a few days ago offers breathing room, by preventing the United States economy from being figuratively dragged over the edge by its fiscal imbalance. The bad news is that this solution does not permanently solve the pending problems. Our region has closely followed discussions on the “fiscal cliff,” because of the serious implications generated by the uncertain U.S. fiscal situation. Uncertainty poses significant risks to our economies. It introduces greater market volatility that complicates monetary, foreign-exchange and financial policy management. Uncertainty also destabilizes consumption, production and investment decisions, which have a negative effect on economic growth for the United States and the world.
