Input-output linkages and sector-specific distortions in the Latin American development problem

In this paper, I analyze the Latin American development problem using a model with input-output linkages, sectorial productivity gaps, and sector-specific distortions. I provide a characterization of the sectorial linkages and distortions in the region, and quantify the gains in aggregate output of closing productivity gaps and eliminating distortions. I provide policy design recommendations for the region by identifying the sectors where opportunities areas for policy improvement are present.