nep-lam New Economics Papers
on Central and South America
Issue of 2008‒05‒31
six papers chosen by
Maximo Rossi
University of the Republic

  1. Spatial Aspects of Trade Liberalization in Colombia:A General Equilibrium Approach By Eduardo Haddad; Jaime Bonet Moron; Geoffrey Hewings; Fernando Perobelli
  2. From individual attitudes towards migrants to migration policy outcomes: Theory and evidence By Facchini, Giovanni; Mayda, Anna Maria
  3. Can we do policy recommendations from a framed field experiment? The case of coca cultivation in Colombia By Ibanez, Marcela; Martinsson, Peter
  4. Fiscal policy and reelection in Brazilian municipalities By Sakurai, Sergio Naruhiko & Menezes, Naercio Aquino
  5. Testing the Taylor Model Predictability for Exchange Rates in Latin America By Moura, Marcelo
  6. Price-Setting Policy Determinants: Micro-Evidence from Brazil By Moura, Marcelo; Rossi, José

  1. By: Eduardo Haddad; Jaime Bonet Moron; Geoffrey Hewings; Fernando Perobelli
    Abstract: This paper offers some preliminary steps in the marriage of some of the theoretical foundations of the new economic geography with spatial computable general equilibrium models. Modeling the spatial economy of Colombia using the traditional assumptions of CGE models makes little sense when one territorial unit, Bogotá, accounts for over one fourth of GDP and where transportation costs are high and accessibility low, compared to European or North American standards. Hence, handling market imperfections becomes imperative as does the need to address internal spatial issues from the perspective of Colombia’s increasing involvement with external markets. The paper builds on the CEER Model, a spatial CGE model of the Colombian economy; non-constant returns and non-iceberg transportation costs are introduced and some simulation exercises are carried out. The results confirm the asymmetric impacts that trade liberalization has on a spatial economy in which one region, Bogotá, is able to more fully exploit scale economies vis-à-vis the rest of Colombia. The analysis also reveals the importance of different hypotheses on factor mobility and the role of price effects to better understand the consequences of trade opening in a developing economy.
    Date: 2008–05–21
  2. By: Facchini, Giovanni; Mayda, Anna Maria
    Abstract: In democratic societies individual attitudes of voters represent the foundations of policy making. We start by analyzing patterns in public opinion on migration and find that, across countries of different income levels, only a small minority of voters favour more open migration policies. Next we investigate the determinants of voters' preferences towards immigration from a theoretical and empirical point of view. Our analysis supports the role played by economic channels (labour market, welfare state, efficiency gains) using both the 1995 and 2003 rounds of the ISSP survey. The second part of the paper examines how attitudes translate into a migration policy outcome. We consider two alternative political-economy frameworks: the median voter and the interest groups model. On the one hand, the restrictive policies in place across destination countries and the very low fractions of voters favouring immigration are consistent with the median voter framework. At the same time, given the extent of individual-level opposition to immigration that appears in the data, it is somewhat puzzling, in a median-voter perspective, that migration flows take place at all. Interest-groups dynamics have the potential to explain this puzzle. We find evidence from regression analysis supporting both political-economy frameworks.
    Keywords: Immigration; Immigration Policy; Interest Groups; Median Voter; Political Economy
    JEL: F22 J61
    Date: 2008–05
  3. By: Ibanez, Marcela (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Laboratory experiments are potentially effective tools for studying behavior in settings where little or no information would otherwise exist such as participation in illicit activities. However, using laboratory experiments to draw policy recommendations is highly debatable. We investigate the external validity of a framed field experiment that mimics coca cultivation and find evidence that behavior in the experiment is consistent with self-reported behavior. We use the experiment to discuss the effectiveness of carrot and stick policies on coca investments. The experiment indicates that subjects are more responsive to changes in the relative profit of cattle farming than to changes in the probability of coca eradication.
    Keywords: Coca cultivation; Colombia; Experiment; Public Bad
    JEL: C91 C93 D62 K42
    Date: 2008–05–27
  4. By: Sakurai, Sergio Naruhiko & Menezes, Naercio Aquino
    Date: 2008–10
  5. By: Moura, Marcelo
    Date: 2008–10
  6. By: Moura, Marcelo; Rossi, José
    Date: 2008–10

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