Growth,Distribution, and External Constraints: A Post-Kaleckian Model Applied to Brazil

ABSTRACT

The purpose of this research is to analyze whether the Brazilian economy behaved under a wage-led or profit-led regime between 1960 and 2011, considering a Post-Kaleckian model in a context of external constraints. The time span is limited by data availability (i.e., 2011). To answer the question of whether the Brazilian economy works under a wage-led or profit-led regime, we propose a simple Post-Kaleckian model. The model suggests that a profit-led regime is more probable for Brazil. Moreover, a wage-led regime occurs when a balance of payments constrained growth model is taken into consideration. Likewise, the real exchange rate has a positive impact on economic growth through the export channel. This result is a novelty in the recent literature about the relationship between real exchange rate and economic growth within a Post-Kaleckian model. The Brazilian economy was chosen as it is one of the biggest economies in Latin America.     

Individually rational rules for the division problem when the number of units to be allotted is endogenous

We study individually rational rules to be used to allot, among a group of agents, a perfectly divisible good that is freely available only in whole units. A rule is individually rational if, at each preference profile, each agent finds that her allotment is at least as good as any whole unit of the good. We study and characterize two individually rational and efficient families of rules, whenever agents' preferences are symmetric single-peaked on the set of possible allotments. Rules in the two families are in addition envy-free, but they differ on whether envy-freeness is considered on losses or on awards. Our main result states that (a) the family of constrained equal losses rules coincides with the class of all individually rational and efficient rules that satisfy justified envy-freeness on losses and (b) the family of constrained equal awards rules coincides with the class of all individually rational and efficient rules that satisfy envy-freeness on awards.     

Social collateral,dynamic incentives,and joint liability in a two‐step trust game: Lending to the unbankable

Asymmetric information and lack of collateral creates a suboptimal allocation of financial resources to those in most need. When uncollateralised borrowers approach financial institutions, the presence of moral hazard and adverse selection results in no lending. Conversely, group‐lending contracts—joint liability, dynamic lending, and social cost for defaulting—control for information asymmetries and create a co‐operative trust game between borrowers leading to an undominated optimal strategy to repay, and therefore, for the lender to Give. Group lending proves superior to typical individual borrowing and lending when no collateral is available. Social collateral and trust are fundamental pieces of the successful work of MicroFinance. Resulting contracts and correspondent payoffs are Pareto efficient.     

Technological leadership and sectorial employment growth: A spatial econometric analysis for U.S. counties

This paper studies the determinants of technological catch‐up considering spatial and sectoral aggregation of industries. We investigate how geographical and technological proximity to the technology leader impact regional employment growth. We model technological progress by means of a hierarchical process of catch‐up to the technology leader. We also incorporate measures for knowledge spillover effects to test the roles of competition, specialisation, and diversity at the industry level. Empirical results using data at the county level for different economic sectors (2‐dig NAICS) for the United States indicate that human capital plays a crucial role in promoting sectoral employment growth. The association between technological/geographical distance to the technology leader and employment growth varies across sectors.     

Inference for large financial systems

We treat the parameter estimation problem for mean‐field models of large interacting financial systems such as the banking system and a pool of assets held by an institution or backing a security. We develop an asymptotic inference approach that addresses the scale and complexity of such systems. Harnessing the weak convergence results developed for mean‐field financial systems in the literature, we construct an approximate likelihood for large systems. The approximate likelihood has a conditionally Gaussian structure, enabling us to design an efficient numerical method for its evaluation. We provide a representation of the corresponding approximate estimator in terms of a weighted least‐squares estimator, and use it to analyze the large‐system and large‐sample behavior of the estimator. Numerical results for a mean‐field model of systemic financial risk highlight the efficiency and accuracy of our estimator.     

Tipping the scale? The workings of monetary policy through trade

The monetary policy entails demand‐augmenting and diverting effects, and its impact on the trade balance—and on other countries—depends on the magnitude of these opposing effects. Using U.S. data and a sign‐restricted structural vector autoregressive identification, we investigate the importance of these effects. Overall, the results indicate that a monetary loosening (tightening) leads to a strengthening (weakening) of the overall trade balance, indicating that demand diversion dominates. The paper also explores changes in the effects following the global financial crisis, reflecting the impaired monetary transmission mechanism.     

Will elders provide for their grandchildren? Unconditional cash transfers and educational expenditures in Bolivia

We take advantage of repeated cross‐sectional household surveys and a sharp discontinuity created by the introduction of an unconditional cash transfer to elders in Bolivia, to evaluate its impact on educational expenditures on children within a household. We find positive and significant impacts of the program at the aggregate level. We also find that the program has stronger effects on indigenous populations as well as on female and rural populations. Our results are robust to a series of falsification tests, survey structure, model specification, and estimation methods.     

Food waste paradox: antecedents of food disposal in low income households

This article aims to identify antecedents of food waste among lower‐middle class families – a paradox, given the financial constraints this population faces. The importance of this research is evident in escalating environmental pressures for better use of our planet's scarce resources. Given that most of the world is low‐income, any behavioral change in this population is likely to have a considerable impact. Empirical data were collected from 14 lower‐middle income Brazilian households, based on observations, in‐depth interviews, photographs and a focus group (n = 6). Five major categories of food waste antecedents were identified: (1) excessive purchasing, (2) over‐preparation, (3) caring for a pet, (4) avoidance of leftovers and (5) inappropriate food conservation. Several subcategories were also found, including impulse buying, lack of planning and preference for large packages. Surprisingly, findings show that strategies used to save money – such as buying groceries in bulk, monthly shopping trips, preference for supermarkets and cooking from scratch – actually end up generating more food waste. This mitigates the savings made during the purchasing phase.     

Value-in-context in crowdfunding ecosystems: how context frames value co-creation

The aim of this paper is to analyse the phenomenon of crowdfunding and determine whether it can be considered a service ecosystem, where the context frames innovation through value co-creation. A qualitative, multiple case study approach is used to analyse three platforms and six initiatives in the Spanish arts sector. The findings reveal that crowdfunding can be considered an ecosystem where value-in-context frames seven types of value co-creation, offering a contribution both to ecosystem theory and to the field of co-creation.     

Interplay between ethanol and electric vehicles as low carbon mobility options for passengers in the municipality of São Paulo

The Brazilian cities as well as many of the large urban centers in the world continue to expand, increasing the demand for mobility and transport, while, at the same time, the same cities are investing in greenhouse gas (GHG) mitigation to avoid climate change. Brazil's urbanization rate increased from 26% in 1940 to almost 70% in 1980. During this period, the Brazilian population tripled and the urban population multiplied by seven. In 2010, the transport sector in São Paulo accounted for 71% of the total emissions released by the energy sector. Ethanol has been considered a fuel with less greenhouse gas emissions, when compared with fossil fuels. However, ethanol production would have to double to meet the expected demand. Electric vehicles (EVs) market is expanding around the world, and is also an option to reduce the transport emissions, if powered by clean electricity. To assess whether the adoption of EVs might bring more benefits than the current ethanol, we develop prospective scenarios supported by the Long-range Energy Alternatives Planning (LEAP) simulation tool, taking a bottom-up tank-to-wheel approach to consider the CO₂ emissions of car in São Paulo. The scenario considering a substitution of 25% of gasoline-powered cars by EV in 2030 showed a reduction in energy consumption and CO₂ emissions, around 15% and 26% respectively in that year in comparison with 2015. We discuss the interplay between ethanol and EV, also considering emission coefficients from life cycle analysis conducted in Brazil, and concluded EV will have higher positive impact on climate change mitigation than ethanol.