This paper examines the role of commodity prices and international interest rates in explaining Latin America´s recovery from two major economic crises: the debt crisis of the 1980s, which happened in an unfavorable scenario marked by low commodity prices coupled with a sharp rise in international interest rates, and the great recession of 2008, triggered in the midst of a commodity boom and under historically low interest rates. I argue that this variation is key to understanding the regional collapse observed in the former and the relative success obtained in the latter. As such, this analysis challenges the conventional wisdom that emerging market countries that adopted “good policies’’ – improved policy fundamentals and reduced vulnerabilities in the pre-crisis period – reaped the benefits of these reforms and experienced faster recovery since 2008.
