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on Central and South America |
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Issue of 2011‒04‒02
seven papers chosen by |
| By: | Frederick van der Ploeg; Anthony J. Venables |
| Abstract: | A windfall of natural resource revenue (or foreign aid) faces government with choices of how to manage public debt, investment, and the distribution of funds for consumption, particularly if the windfall is both anticipated and temporary. Standard policy advice follows the permanent income hypothesis in suggesting a sustained increase in consumption supported by interest on accumulated foreign assets (a Sovereign Wealth Fund) once resource revenue are exhausted. However, this strategy is not optimal for capital-scarce developing economies. Incremental consumption should be skewed towards present generations, relative to those in the far future. Savings should be directed to accumulation of domestic private and public capital rather than foreign assets. Optimal policy depends on instruments available to government. We study cases where the government can make lump-sum transfers to consumers; where such transfers are impossible so optimal policy involves cutting distortionary taxation in order to raise investment and wages; and where Ricardian consumers can borrow against future revenues so government only has indirect control of consumption. |
| Keywords: | Natural resource, windfall public revenues, risk premium on foreign debt, public infrastructure, private investment, credit constraints, optimal fiscal policy, debt management, Sovereign Wealth Fund, asset holding subsidy, developing economies |
| JEL: | E60 F34 F35 F43 H21 H63 O11 Q33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:543&r=lam |
| By: | Clark, Andrew E. (Paris School of Economics); Senik, Claudia (Paris School of Economics) |
| Abstract: | This paper asks what low-income countries can expect from growth in terms of happiness. It interprets the set of available international evidence pertaining to the relationship between income growth and subjective well-being. Consistent with the Easterlin paradox, higher income is always associated with higher happiness scores, except in one case: whether growth in national income yields higher well-being is still hotly debated. The key question is whether the correlation coefficient is "too small to matter". The explanations for the small correlation between national income growth and subjective well-being over time appeal to the nature of growth itself (from negative side-effects, such as pollution), and to the psychological importance of relative concerns and adaptation. The available evidence contains two important lessons: income comparisons do seem to affect subjective well-being, even in very poor countries; however, adaptation may be more of a rich-country phenomenon. Our stand is that the idea that growth will increase happiness in low-income countries cannot be rejected on the basis of the available evidence. First, cross-country time-series analyses are based on aggregate measures, which are less reliable than those at the individual level. Second, development is a qualitative process involving take-off points and thresholds. Such regime changes are visible to the eye through the lens of subjective satisfaction measures. The case of Transition countries is particularly impressive in this respect: average life satisfaction scores closely mirrored changes in GDP for about the first ten years of the transition process, until the regime became more stable. The greater availability of subjective measures of well-being in low-income countries would greatly help in the measurement and monitoring of the different stages and dimensions of the development process. |
| Keywords: | income, subjective well-being, comparisons, adaptation, development |
| JEL: | D63 I3 O1 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5595&r=lam |
| By: | Agustin Roitman; Christian Daude |
| Abstract: | Emerging markets are more volatile and face different types of shocks, in size and nature, compared to their developed counterparts. Accurate identification of the stochastic properties of shocks is difficult. We show evidence suggesting that uncertainty about the underlying stochastic process is present in commodity prices. In addition, we build a dynamic stochastic general equilibrium model with informational frictions, which explicitly considers uncertainty about the nature of shocks. When formulating expectations, the economy assigns some probability to the shocks being temporary even if they are actually permanent. Parameter instability in the stochastic process implies that optimal saving levels (debt holdings) should be higher (lower) compared to a process with fixed parameters. Imperfect information about the nature of shocks matters when commodity GDP shares are high. Thus, economic policies based on misperception of the underlying regime can lead to substantial over/under saving with important associated costs. |
| Keywords: | Commodity prices , Economic models , Emerging markets , External shocks , Savings , Small states , |
| Date: | 2011–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/60&r=lam |
| By: | Ricardo Fenochietto; Carola Pessino |
| Abstract: | Este trabajo es parte de una serie de estudios realizados en el marco del proyecto: “La efectividad de las redes de protección social: El rol de los sistemas integrados de información social”. Los estudios de caso fueron realizados en el período 2007-08. Se agradecen los comentarios de Ignacio Irarrázaval y Viviane Azevedo. |
| JEL: | H83 I38 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4706&r=lam |
| By: | Rogelio Gomez Hermosillo |
| Abstract: | Este trabajo forma parte de una serie de estudios realizados en el marco del proyecto “La efectividad de las redes de protección social: el rol de los sistemas integrados de información social”. Los estudios de caso fueron realizados en el período 2007-2008. El enfoque privilegiado en la elaboración de este estudio es más práctico que teórico y más gerencial que académico. El autor agradece al Banco Interamericano de Desarrollo (BID) su invitación para elaborar este trabajo. Asimismo, agradece a Concepción Steta, Angélica Castañeda, María Farell, Ramiro Ornelas y Carlos Rodríguez por su apoyo y por el trabajo eficaz realizado en los años compartidos en Oportunidades. Una especial mención merecen los creadores del Programa Progresa (actualmente denominado Oportunidades) y, por ende, los hacedores de los fundamentos y los primeros pasos del sistema que aquí se estudia. El autor agradece en especial a Daniel Hernández y Mónica Orozco, así como a Santiago Levy, quien apoyó siempre el Programa y su mejora continua. Por último, el autor expresa su agradecimiento a Beatriz Straffon por su colaboración en la elaboración de este documento. |
| JEL: | H83 I38 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4708&r=lam |
| By: | Lucia Mina Rosero |
| Abstract: | Esta Nota Técnica forma parte de una serie de estudios realizados en el marco del proyecto “La efectividad de las redes de protección social: el rol de los sistemas integrados de información social”. Los estudios de caso fueron realizados en el período 2007-2008. La asistencia para esta investigación fue desarrollada por Francisco Espinosa. La autora agradece las sugerencias y los detallados comentarios suministrados por Roberto Ángulo, Olga Lucía Acosta y Jaime Ramírez para la elaboración de este documento. Igualmente agradece la información proporcionada por medio de varias entrevistas por Diana Cárdenas, quien se desempeñó como Coordinadora del Grupo de Calidad de Vida (Dirección de Desarrollo Social/Departamento Nacional de Planeación, DDS/DNP), así como los aportes de información realizados por los funcionarios de dicho grupo: Lina Castaño Mesa, Esteban Granados y Mauricio Linares. |
| JEL: | H83 I38 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4707&r=lam |
| By: | Francisco Covarrubias; Ignacio Irarrazaval |
| Abstract: | El presente trabajo se centra en el análisis del Sistema Integrado de Información Social (SIIS) que como el registro único de beneficiarios implementado en Chile. Se describe detalladamente su operación para mejorar la estrategia de protección social. Se concluye que los datos integrados al sistema son de gran utilidad para los organismos prestadores de beneficios sociales. Por ejemplo, estos datos permiten conocerse los datos de los potenciales usuarios, les permite hacer seguimiento de ellos, evaluar los resultados e impactos de los programas para el beneficio de la población necesitada. |
| JEL: | H83 I38 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4705&r=lam |