The isthmus of Panama was an epic geological event that caused geographic isolation for thousands of species.The isthmus developed over millions of years, as a large tectonic shift caused sediment to build up and create this mass of land connecting North and South America (http://en.wikipedia.org/wiki/Isthmus_of_Panama).While this oceanic interruption caused geographic isolation for thousands of species, it also bridged the gap for many terrestrial animals to cross over into other continents.
Extensive fossil records indicate that the late Cenozoic period proved to be extremely productive for land mammals across the America's (Webb, 2006). The wide variation of species evolution at such a rapid rate was evidently a result of the GABI, which explains clearly the "dynamic evolutionary diversification" found in Latin America today for both plants and animals (Webb, 2006).
The GABI is responsible for geographic isolation for some animals, mostly ocean dwelling, such as the snapping shrimp. The snapping shrimp is a perfect representation of the vicariant speciation that occurred from the Isthmus (Hurt, Anker, and Knowlton, 2008). Several sister species of snapping shrimp have developed as a result of this divergence (Hurt et al., 2008).
However, many species were able to migrate north or south on land, and over millions of years, their evolution was successful.
Hurt, C., Anker,A., Knowlton, N. (2008). A multilocus test of simultaneous divergene across the isthmus of Panama using snapping shrimp in the genus alpheus. Evolution, 63(2), 514-530.
Webb, S.D. (2006). The Great American Biotic Interchange: patterns and process. Annals of the Missouri Botanical Garden, 93(2), 245-257.