No Time for Later: Rebuilding Macro Buffers in the Southern Cone amid a Revamped Global Financial Landscape

Global financial shocks under a revamped global financial landscape can produce unexpected, multi-faceted, and disruptive implications for emerging market economies. Using the VIX index as a proxy for global financial stress, we argue that Southern Cone macro conditions can undergo significant pressure under adverse global financial shocks. The region needs to start rebuilding macro buffers now -in addition to simultaneously correcting macro imbalances and enhancing policy frameworks- to cope with the emerging global financial environment. International organizations, including multilateral development banks, can play several key roles in supporting the rebuilding of macro buffers.