Wars and Child Health: Evidence from the Eritrean-Ethiopian Conflict

Conflict between and within countries can have lasting health and economic consequences, but identifying such effects can be empirically challenging. This paper uses household survey data from Eritrea to estimate the effect of exposure to the 1998-2000 Eritrea-Ethiopia war on children's health. The identification strategy exploits exogenous variation in the conflict's geographic extent and timing and the exposure of different birth cohorts to the fighting. The unique survey data include details on each household's migration history, which allows us to measure a child's geographic location during the war and without which war exposure would be incorrectly classified. War-exposed children have lower height-for-age Z-scores, with similar effects for children born before or during the war. Both boys and girls who are born during the war experience negative impacts due to conflict. Effects are robust to including region-specific time trends, alternative conflict exposure measures, and mother fixed effects.     

The Political Economics of Tax Reform in Chile

This paper explores the political economy at the time of the 2012 tax reform, which paved the way for a radical tax increase in 2014. Both were an explicit response to demands to improve public education. As opposed to the 2014 reform, the 2012 tax adjustment was an unplanned decision made in the wake of a pact of long-term fiscal stability during the government's last year in office and was partially negotiated with student associations and pressure groups. We hypothesise that the existing institutions were not strong enough to meet emerging social demands through formal channels. We will show evidence for the hypothesis that the government's incorporation of students’ demands in its agenda was mainly a response to the role of the media, the fact that it is not difficult for students to organise themselves and express their demands, the support of students’ families and the ruling government's fear of missing out on a second term in office.     

GROWTH AND INCOME POVERTY IN LATIN AMERICA AND THE CARIBBEAN: EVIDENCE FROM HOUSEHOLD SURVEYS

This paper provides evidence on growth and income poverty in Latin America and the Caribbean (LAC). Results are obtained by processing microdata from household surveys of 18 LAC countries covering the 1990s and early 2000s. Over this period the LAC economies experienced heterogeneous patterns of growth and poverty changes. Most countries in the region had a rather meager performance in terms of poverty reduction. Episodes of positive, significant and unambiguously pro-poor income growth have been rare in Latin America.     

Biased procurement auctions

In a complex procurement a buyer may consider biasing the auction rules in order to account for differences in product characteristics offered by the sellers. This paper studies the gathering, disclosure and use of information about this bias. While we also describe the optimal procurement auction in our setting, the main focus of the paper is on the case where the buyer does not have commitment power. We find that without commitment full disclosure of the buyer’s preferences is optimal. Furthermore, lack of commitment distorts the buyer’s incentives to learn about its preferences: unlike the commitment case, without commitment the value of this information can be negative. Based on Chapter 3 of my Ph.D. dissertation at Stanford University. I gratefully acknowledge the support of a John M. Olin Dissertation Fellowship and a Melvin and Joan Lane Stanford Graduate Fellowship. Thanks to Pat Bajari, Tim Bresnahan, Vinicius Carrasco, George Deltas, Jonathan Levin, Paul Milgrom, Ilya Segal and an anonymous referee for valuable suggestions.     

On the monetary-macro dynamics of Colombia and Mexico

This paper investigates the dynamic interrelationship among money growth, inflation, and output growth for Colombia and Mexico on the basis of implementation of a vector autoregression methodology. The evidence for Colombia generally shows autonomous output growth and money growth behavior, and an important role for money shocks in accounting for variations in inflations. A different pattern of results emerged for Mexico: there are strong two-way feedbacks among money growth and inflation, and a less autonomous output growth behavior than in Colombia.     

A NOTE ON CHAMBERS'S “LONG MEMORY AND AGGREGATION IN MACROECONOMIC TIME SERIES”*

This note reviews some results on aggregating discrete‐time long memory processes, providing a formula for the spectrum of the aggregates that considers the aliasing effect.     

Adaptive-regressive expectations and the price level: A reformulation

In a recent paper, Frenkel (1975) presents an adaptive-regressive scheme of expectations as applied to the inflation rate. While the rationale for the scheme is the presence of expectations concerning the price level, Frenkel's construction does not specify such an expected price level, but only a short-run (instantaneous) and a long-run expected inflation rate. It is shown here that, even though such a specification yields reasonable results for certain important kind of policy changes, it is not robust enough so as to yield equally reasonable outcomes for other type of changes. This paper presents a specification of the expected price level (and, consequently, of all future expected inflation rates) which is not subject to those shortcomings and which seems to reflect in a better manner the basic economic idea behind the scheme.     

Relationships between macroeconomic time series in a fixed-exchange-rate economy: The case of Italy

This paper presents an empirical analysis that is useful for the task of characterizing the dynamic structure and causal orderings of the underlying macroeconomic model of a fixed-exchange-rate economy. Particular emphasis is given to the formulation and testing of versions of the ‘natural-rate’ hypothesis, the ‘small open economy’ hypothesis, and the ‘non-sterilization’ hypothesis. These issues are examined on the basis of quarterly time series for Italy (1956 1970)     

The Positive Effect of Industrial District on the Export Performance of Italian Firms

Economies of scale in the provision of export services and informal face-to-face exchanges of information about export markets may improve export performance of small firms located in Marshallian districts (locales). This paper presents an empirical test of this hypothesis and finds that geographical agglomeration of small-medium firms in a delimited area significantly affects their export intensity and their probability of becoming exporters. The significance of geographical agglomeration persists in spite of all controls which show how the dependent variable is also (positively) affected by export subsidies, formal export cooperation among firms, cooperation in (and quality of) innovation, size and age.     

The Dynamics of Fair Trade as a Mixed-form Market

This article analyses the Fair Trade sector as a “mixed-form market,” i.e., a market in which different types of players (in this case, nonprofit, co-operative and for-profit organizations) coexist and compete. The purposes of this article are (1) to understand the factors that have led Fair Trade to become a mixed-form market and (2) to propose some trails to understand the market dynamics that result from the interactions between the different types of players. We start by defining briefly Fair Trade, its different dimensions (including the “fair” quality of the products) and its organizational landscape, focusing on the distinction between the pioneer “Alternative Trading Organizations” and the second-mover companies. Then, we recall the theoretical emergence factors for each type of organization (nonprofit, co-operative and for-profit) and apply these emergence factors to the context of Fair Trade. This analysis allows us to capture the specificities of each type of operator with regard to Fair Trade and, thus, to have a better understanding of the dynamics in the sector. Such dynamics includes competition, but also conflict and partnership. Our analysis includes elements on ethical imitation, consumers’ behaviors, effects on welfare and the role of the government.