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Economies worldwide strive to maintain economic stability, social welfare, sustained growth, price controls, and full employment. However, they face various types of risk that affect their performance. Systematic risk corresponds to uncontrollable external factors, such as political events or natural phenomena, that impact an entire economy. On the other hand, unsystematic risk affects specific sectors and can be mitigated through portfolio diversification. Nevertheless, financial procyclicality emerges, a phenomenon that amplifies the fluctuations of the economic cycle. Countries with central banks have tools to counteract these effects; however, in dollarized economies like Panama, where there is no issuance of its own currency, intervention options are more limited. Therefore, a review of financial data and Gross Domestic Product (GDP) is conducted to analyze the behavior of financial procyclicality in the country. This study contributes to the understanding of workplace well-being in Latin American contexts, especially in Panama, where gaps remain in the regulation and adoption of flexible labor practices.
