Taking Stock of Thirty Years of Research

The IDB's Research Department has turned 30, and as I celebrate this birthday, I look back with immense pride on the three decades of critical contributions our department has made to evidence-based policymaking in Latin America and the Caribbean and forwards to the tough challenges we face in a rapidly changing world.

Having first joined the department more than 20 years ago as a research assistant under then-Chief Economist Ricardo Hausmann, and then returning five years ago as general manager and chief economist, I've been fortunate to work with the extremely talented economists that fill our department's ranks. Their ability to marshal data, analysis, and research to help countries in the region build stronger, more resilient economies and advance on the path of sustainable development for the benefit of millions is nothing short of admirable.

But at 30, we are not going to rest on our laurels. Our department still has unlimited gas in the tank and a lot of work to do. We have the experience of decades of research on issues ranging from public spending, debt, and productivity to early childhood development, infrastructure, institutions, political economy, and inequality-disseminated in our flagship Development in the Americas (DIA) report series and many other reports and published papers. We've built the IDB's most robust and skilled Research Department ever in which each of our economists work for the common goal of improving lives in our region. We've expanded into new disciplines like trust and behavioral economics, tackled issues like gender and diversity and financial inclusion, and delved deep into the social and economic impacts of the COVID-19 pandemic. And across these areas, we've collaborated closely with other departments and divisions to share insights and expertise. But we also know that we face a dizzying array of new challenges from, among others, the advent of artificial intelligence, climate change, crime, migration, competition, and shifting trade patterns. Today we remain full of energy and ambition and have no intention of slowing down.

In keeping with our commitment to the region, we recently took stock of some of the critical regional and global issues we face in a two-day conference, featuring a remarkable group of seven keynote speakers and 30 panelists and moderators from the top ranks of academia, think tanks, international lending institutions, and related organizations. Reviewing issues like innovation, productivity, fiscal policy, climate change, and human development, among many others, this group of global experts traversed themes we've been working on for a long time. And more than 8,000 people tuned in online to listen to their talks and panel discussions.

Most importantly, our guests provided new insights for research as we work to support countries and help improve lives. Philippe Aghion, for example, spoke to us about the challenges of boosting productivity growth. Emphasizing firm dynamics, he explored the need for governments to balance creative destruction and innovation with regulations that prevent monopolies. Carlos Végh examined different kinds of fiscal rules and the institutional and political challenges involved in combatting the tendency of emerging market economies, like those in Latin America and the Caribbean, to spend too much in good times and cut spending too much in hard times (fiscal procyclicality). And Esteban Rossi-Hansberg plumbed the many uncertainties involving climate change, exploring the spatial frictions involved in moving economic activity-goods, people, technology, and capital-in response to global warming while stressing the need for structural models to evaluate the economic cost of climate change.

We've done a lot of work at the Research Department on capital flows and the dangers of sudden stops, those crises where foreign financing to borrower countries suddenly dries up. So the insights of Enrique Mendoza on what countries can do in terms of managing capital flows and reserves to increase macroeconomic stability, and the supporting role international financial institutions can play, gave us much to think about. So did the ideas of Andrés Velasco on building state capacity and ensuring that economic policies have political support. Paul Collier was incisive in explaining the fate of places left behind and the crucial role of strong local leadership in helping struggling places move ahead. Sule Alan's thoughts on human development were equally inspiring. Given the extensive work we've done on social cohesion, trust, and education in our region, her ideas on the use of schools to develop better social and emotional skills, behavioral norms, and social cohesion hit the mark.

Our previous chief economists Guillermo Calvo, Ricardo Hausmann, Santiago Levy, Eduardo Lora, and José Juan Ruiz shared their perspectives on our achievements and potential future directions. Their long-standing association with the Research Department allowed them to provide context and highlight trends that may inform our approach to evidence-based research in the coming years. We are truly grateful to all our speakers, panelists, and moderators for their contributions as we forge ahead in our mission to help generate prosperous, inclusive, and sustainable development in Latin America and the Caribbean. The IDB's new institutional strategy puts ever greater emphasis on research and knowledge, and, with the talent and dedication of our researchers and the continuing support of our partners and collaborators, we look forward eagerly, energetically, and passionately to the challenge.