Inflationary Rigidities and Orthodox Stabilization Policies: Lessons from Latin America

Orthodox stabilization programs in Latin American countrieshave been notoriously unsuccessful in combating inflation, despitethe imposition of stringent cuts in government deficits. Inmost cases inflation came down only slowly and temporarily,with concomitant declines in growth and employment. The Bolivianprogam, one of the only Latin American successes, is contrastedwith those of Argentina, Brazil, Chile, and Mexico. The problemsof dealing with chronic inflation are compared with those ofhyperinflationary countries, and the influence of price andwage rigidities, expectations, and credibility is explored.The study shows that fiscal restraint is a necessary but notsufficient condition for success, and that sound managementof nominal variables (the exchange rate and money supply) arealso necessary. The critical role of credibility is linked withprice and wage rigidities in the chronic inflation countries,whereas the unsustainability of hyperinflation is seen to increasethe credibility of and thus the potential for successful stabilizationprograms.     

发达经济体现代货币理论实践及分配效应

<正>现代货币理论主张中央银行可以通过货币政策支持扩张性财政政策,使政府拥有更灵活的财政政策空间而无须受到制度性财政约束的阻碍党的十八大以来,党中央把握发展阶段新变化,把逐步实现全体人民共同富裕摆在更加重要的位置上。放眼全球,近年来以日本、美国为代表的主要发达经济体采取宽松货币政策与扩张性财政政策相配合的"双扩张"政策组合,的确起到了抑制经济快速下行的效果,但是也产生了显著的分配效应,     

Macroeconomic Effects of Credit Deepening in Latin America

We augment a standard dynamic general equilibrium model with financial frictions, in order to quantify the macroeconomic effects of the credit deepening process observed in Latin America in the 2000s—most notably in Brazil. In the model, a stylized banking sector intermediates credit from patient households to impatient households and entrepreneurs. Motivated by the Brazilian experience, we allow the credit constraint faced by households to depend on labor income. Our model is designed to isolate the effects of credit deepening through demand-side channels, and abstracts from potential effects of credit supply on total factor productivity. In the calibrated model, credit deepening generates only modest above-trend growth in consumption, investment, and GDP. Since Brazil has experienced one of the most intense credit deepening processes in Latin America, we argue the quantitative effects that hinge on the channels captured by the model are unlikely to be sizable elsewhere in Latin America.     

Liquidity and firm investment: Evidence for Latin America

This paper explores the relationship between firms' investment and stock market liquidity. Using a panel of Latin American firms, I find evidence that a higher trading volume and a higher industry-adjusted trading volume are associated with higher firm investment (PPE, Total Assets, and Inventory). This relationship is higher in episodes where the firm decides to issue shares, and it is also greater for firms with tighter financial constraints and better investment opportunities. This evidence is consistent with a mispricing channel, where firms issue and invest the proceeds to take advantage of low cost of capital, or with a cost channel, where liquidity is associated with lower issuance costs. Also, it is less related with an informational channel, where a liquid market helps a manager to take more efficient decisions, since this channel does not necessarily predict an increase in investment, but only more efficient investment.     

Monetary Policy and Inflation Expectations in Latin America: Long-Run Effects and Volatility Spillovers

This paper uses multiple cointegration analysis to estimate simultaneously a monetary reaction function and the determinants of expected inflation for Brazil, Chile, Colombia, and Mexico. In addition, M-GARCH modeling is used to test for the presence of volatility spillovers between the monetary stance and inflation expectations. The analysis shows that there are long-term relationships between the interest rate, expected inflation, and the inflation target, and that greater volatility in the monetary stance increases the volatility of expected inflation in Brazil, Colombia, and Mexico.     

拉美城市化教训对我国的警示

目前,我国以农村向城市、农业向非农业流动为主导的城市化正步入快车道。根据国家人口发展战略研究成果,2014年我国城市化水平可能超过     

转轨经济国家的国际贸易政策:后凯恩斯经济学的观点

近年来,后凯恩斯经济学家在拓展后凯恩斯经济理论的过程中,也开始注重转轨经济理论的构建.后凯恩斯学者认为,转轨经济国家发展的目标是建立一个文明开化的社会,在国际贸易中应实施一套与"休克疗法"相对的国际贸易政策.     

政策频出,共抗衰退——主要经济体货币政策回顾与展望

正2012年二季度以来,全球经济增速显著放缓。发达经济体普遍在维持极度宽松利率环境的基础上,进一步加大了非常规货币政策的强度,以应对黯淡的经济增长形势。新兴市场经济体宏观调控环境趋于复杂,应对政策不一。然而,在全球缺乏新的经济增长点的情况下,多年来的危机应对已使得各国货币政策空间不断收窄。同时,长期宽松的货币政策也对各央行的退出策略提出了挑战。     

Macroeconomic policies and performance in Latin America

This paper provides new evidence on macroeconomic policies and results in Latin America and the Caribbean. Results are: (i) credibility allows adoption of counter-cyclical macroeconomic policies; (ii) accuracy in meeting inflation targets depends on central bank independence and country risk; (iii) intermediate exchange rate (ER) regimes have become less persistent; (iv) ER regimes matter for inflation and growth; (v) real ER trends are not explained by productivity growth and supply reforms do not resolve real ER misalignments; (vi) financial integration has increased significantly; (vii) foreign shocks are a major growth determinant; and (viii) composition of foreign capital inflows matters for growth.     

Circumstance and Choice: The Role of Initial Conditions and Policies in Transition Economies

This article takes an integrated approach to evaluating theinteraction of initial conditions, political change, reformsand economic performance in a unified framework covering 28transition economies in East Asia, Central and Eastern Europe,and the fsu. Initial conditions and economic policy jointlydetermine the large differences in economic performance amongtransition economies. Initial conditions dominate in explaininginflation, but economic liberalization is the most importantfactor determining differences in growth. Political reform emergesas the most important determinant of the speed and comprehensivenessof economic liberalization, raising the important question ofwhat determines political liberalization. Results suggest theimportance of the level of development in determining the decisionto expand political freedoms.     

The finance of innovation in Latin America

This study contributes to the extant literature on innovation by examining how private companies fund innovation activities and R&D in Latin America. Specifically, this study seeks to identify whether innovative companies exhibit financing patterns different from those of non-innovative ones. In addition, this study aims at gauging the association between innovation and firm features, such as age, bank financing, female participation in ownership, financial constraints, and foreign ownership, among others.Based on information for Argentina, Colombia, Chile, Mexico, and Peru for 2010, firm size, firm age, financial constraints, and funding sources appear as the main drivers of innovation in Latin American countries. The figures also show that over 60% of the sampled firms displayed a very low or non-existent innovation level. A pending strategic task in Latin America is to increase both the R&D expenditure/GDP ratio and patent activities, and to attract highly-qualified researchers to industry.     

Profitability of momentum strategies in Latin America

This article examines performance of momentum portfolios in Latin America. Conventional momentum produces zero risk-adjusted returns. Residual and model-based momentum strategies are also unable to deliver positive and significant risk-adjusted performance. A third or absolute strength momentum strategy based on historical returns obtains positive and significant alphas only when controlling for market, size, and value factors. Nonetheless, when we control for country effects or expand the set of risk factors, abnormal returns to absolute strength momentum are also insignificant. In all, after accounting for risk, stock investors in the region were not able to profit from return continuation.     

Dual Exchange Rates in Europe and Latin America

This article uncovers some important empirical regularitiessurrounding the operation of formal dual exchange rates in Europeand Latin America in the 1970s and 1980s. Although there areparallels between the European and Latin American experiences,there are also interesting differences in terms of the sizeand nature of the distortion created by two official exchangerates; the response of the distortion to foreign interest rates,real commercial exchange rates, and domestic budget deficits;and the motives for adopting this exchange rate regime. Empiricalwork on dual exchange rate regimes is made difficult by thetransitory nature of these regimes and by frequent changes ininstitutional practices.     

Child Labor and School Achievement in Latin America

Child labor’s effect on academic achievement is estimatedusing unique data on third and fourth graders in nine Latin-Americancountries. Cross-country variation in truancy regulations providesan exogenous shift in the ages of children normally in thesegrades, providing exogenous variation in the opportunity costof children’s time. Least squares estimates suggest thatchild labor lowers test scores, but those estimates are biasedtoward zero. Corrected estimates are still negative and statisticallysignificant. Children working 1 standard deviation above themean have average scores that are 16 percent lower on mathematicsexaminations and 11 percent lower on language examinations,consistent with the estimates of the adverse impact of childlabor on returns to schooling.     

Mergers and Acquisitions in Latin America: Industrial Productivity and Corporate Governance

This article examines the impact of industrial productivity in the country of origin on transnationals M&As, directed from OECD countries toward Latin America in the period 1996–2010. It also analyzes the relationship between external mechanisms of corporate governance and transnational M&As. Employing a gravitational model at the industry level, we find that industry productivity in the country of origin promotes transnational M&A activity, although capital productivity affects it negatively. We also find evidence that higher standards of corporate governance in both origin and destination countries increase the likelihood of transnational M&As taking place.     

Fiscal shocks and real exchange rate dynamics: Some evidence for Latin America

This paper analyses the effects of fiscal shocks in selected Latin American countries using a two-country model for output, labour input, government spending and relative prices. Dynamic simulation techniques are then applied, in particular to shed light on the possible effects of fiscal imbalances on the real exchange rate. Using quarterly data over the period 1980-2006, we find that in a majority of cases fiscal shocks are the main driving force of real exchange rate fluctuations.     

Waves and Determinants in Mergers and Acquisitions: The Case of Latin America

This article contributes to the current literature on mergers and acquisitions (M&As) by identifying the existence of waves and the determinants of M&A activity in the economies of Argentina, Brazil, Chile, Colombia, Mexico, and Peru. From a sample of 2,391 M&A announcements reported by Thomson One on these countries, applying the methodology proposed by Harford (2005), evidence of M&A waves is found for the periods 1995–2002 and 2003–2010, as reported for other regions in various international studies. After controlling for economic and business environment variables, as well as for profitability and book-to-market variables at the industry level, we find evidence that supports neoclassical theory as a main explanation for M&A activity but not for the misvaluation effect.     

Labor Markets and Adjustment in Open Asian Economies: The Republic of Korea and Malaysia

This article deals with the adjustment following external shocksin two open Asian economies: the Republic of Korea and Malaysia.There were important differences in the economic structure ofthe two countries as well as significant differences in theway external events produced "crises" that interrupted theirdynamic economic growth. Detailed analyses of economic cyclesin the two decades preceding 1987–88 show that the behaviorof factor markets, particularly the markets for labor and foreignexchange, helped Korea to adjust quickly to the shocks but inMalaysia actually caused the crisis to deepen. For economies heavily dependent on exports, the unit cost oflabor in dollars is of central importance as an index of thecompetitiveness of exports and hence of their ability to mounta sustained recovery after a difficult period. Accordingly,the heart of the analysis is the determination of the unit costof labor and the factors affecting its change throughout thecycles. Concentration on this critical variable helps to spotlightthe crucial differences in the factor markets of the two economies.     

What future for health futures in Latin America and the Caribbean?

The Pan American Health Organization (PAHO), Regional Office of the World Health Organization, is a United Nations agency specializing in providing technical cooperation in health to the countries of Latin America and the Caribbean. A futures approach has much to offer in this endeavour, and PAHO is making health futures tools available to its Member States through a variety of activities. The purpose of promoting futures thinking and the application of futures tools is to improve health-policy planning and public health action within the framework of the ‘Health for All’ vision and PAHO's current Strategic and Programmatic Orientations.