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.     

Modeling a Dynamic Portfolio for Pension Plans in Emerging Markets With Myopic and Nonmyopic Behavior

ABSTRACT

We introduce a dynamic formulation for the problem of portfolio selection of pension funds in the absence of a risk-free asset. In emerging markets, a risk-free asset might be unavailable, and the approaches commonly used may no longer be suitable. We use a parametric approach to combine dynamic programming and Monte Carlo simulation to gain additional flexibility. This approach is general in the sense that optimal asset allocation is tractable for all HARA utility functions in the absence of a risk-free asset. The traditional case composed of several risky assets and one risk-free asset is compared to a case in which the risk-free asset is unavailable.     

Attracting Convention and Exhibition Attendance to Complex MICE Venues: Emerging Data from Macao

This study presents an importance‐performance analysis of multi‐level attributes (event, facility and destination) evaluated by delegates attending an exhibition event in a ‘complex meetings, incentive, convention or exhibition (MICE) venue’ in greater China (mainland China, Hong Kong, Macao and Taiwan). The study's findings expound the relevance of various attributes in light of the emergence of complex MICE venues and destination resorts and, in particular, emphasizes the relative importance of destination – vis‐à‐vis facility – and core event‐related attributes towards determining exhibition attendance. Copyright © 2012 John Wiley & Sons, Ltd.     

Inequality Stagnation in Latin America in the Aftermath of the Global Financial Crisis

Between 2003 and 2010, Latin America experienced a solid record of economic growth, coupled with a notable reduction in income inequality. The regional Gini coefficient fell from 0.556 to 0.521 and declined in all 15 out of 17 countries in which frequent data are available. However, previous studies have warned about problems in the sustainability of the decline in income inequality and this study presents evidence of stagnation on this front between 2010 and 2013. The results are robust to various measures of income inequality, but differ across the region. While largely attributable to the recovery from the global financial crisis in Mexico and some countries in Central America, the results are also supported by the demonstrated slowdown in inequality reduction in other countries, including Brazil, Ecuador and Bolivia.     

What are we learning from the life satisfaction literature?

The recent availability of cross-sectional and longitudinal survey data on life satisfaction in a large number of countries gives us the opportunity to verify empirically (and not just to assume) what matters for individuals and what economists and policymakers should take into account when trying to promote personal and societal well-being. We now have ample evidence, generally robust to different cultural backgrounds, on the effects of some important happiness drivers (income, health, unemployment, marital status, etc.) which can be considered “quasi-stylized facts” of happiness. If economic policies, for many obvious reasons, cannot maximize self-declared life satisfaction as such, we are nonetheless learning a lot from these findings. In particular, results on the relevance of relational goods, on the inflation/unemployment trade-off in terms of welfare and, more in general, on the measurement of the shadow value of non-market goods obtained with life satisfaction estimates are conveying relevant information about individual preferences and what is behind utility functions. Such findings suggest that the anthropological reductionism characterizing most economic models can be misleading and that target indicators of economic policies have to be refocused if we want to minimize the distance between economic development and human progress.     

Congestion pricing,transit subsidies and dedicated bus lanes: Efficient and practical solutions to congestion

We analyze urban congestion management policies through numerical analysis of a simple model that: allows users to choose between car, bus or an outside option (biking); consider congestion interactions between cars and buses; and allow for optimization of frequency, vehicle size, spacing between stops and percentage of capacity to be dedicated to bus lanes. We compare resulting service levels, social welfare and consumer surplus for a number of different policies and find that: (i) dedicated bus lanes is a better stand-alone policy than transit subsidization or congestion pricing. The latter is marginally better than subsidization but has a negative impact in consumer surplus. (ii) Efficient transit subsidies are quite large since in many cases first-best transit price is negative; establishing dedicated bus lanes or implementing congestion pricing render subsidies unnecessary for high demand levels. (iii) Both subsidization and dedicated bus lanes would count with public support while congestion pricing would probably encounter opposition. (iv) Transit subsidies and/or congestion pricing do not induce large changes on optimal bus size, frequency, circulation speeds and spacing between stops in mixed-traffic conditions: dedicated bus lanes do. (v) In all cases analyzed, revenues from congestion pricing are enough to cover transit subsidies; the optimal percentage of capacity that should be devoted for bus traffic is around one third.