New Economics Papers
on Central and South America
Issue of 2012‒07‒08
six papers chosen by

  1. Intra-Regional Spillovers in South America: Is Brazil Systemic after All? By Sebastian Sosa; Gustavo Adler
  2. Cost of Traffic Injuries in Latin America By Esteban Diez-Roux; Kavi Bahlla
  3. Grading Latin American Presidents: A View from the Stock Markets By Juan José Cruces and Javier García-Cicco
  4. Dynamics of Investment for Market-Oriented Farmers in Chile By Reyes, Alvaro; Lensink, Robert; Kuyvenhoven, Arie; Moll, Henk
  5. PIB y estructura productiva en Uruguay (1870-2011): Revisión de series históricas y discusión metodológica By Nicolás Bonino Gayoso; Carolina Román; Henry Willebald
  6. Natural Resource Conservation and Technical Efficiency from Small-scale Farmers in Central Chile By Jara-Rojas, Roberto; Bravo-Ureta, Boris; Moreira, Victor; Diaz, José

  1. By: Sebastian Sosa; Gustavo Adler
    Abstract: Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil’s influence on its neighboring economies, documenting trade linkages over the last two decades and quantifying spillover effects in a Vector Auto Regression setting. While trade linkages with Brazil are significant for the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay), they are very weak for others. Consistent with this evidence, econometric results show that, while the Southern Cone economies (especially Mercosur’s members) are vulnerable to output shocks from Brazil, the rest of South America is not. Spillovers can take two different forms: the transmission of Brazil-specific shocks and the amplification of global shocks—through their impact on Brazil’s output. Finally, we also find suggestive evidence that depreciations of Brazil’s currency may not have significant impact on output of its key trading partners.
    Date: 2012–06–05
  2. By: Esteban Diez-Roux; Kavi Bahlla
    Abstract: This presentation was given by Esteban Diez-Roux and Kavi Bahlla at the Ibero-American Road Safety Conference (CISEV) which took place in Bogota, Colombia in June, 2012. This presentation describes how the high rate of traffic accidents in Latin America places a burden on economies in the region. The authors present the methods and results of a study which assigns a monetary cost to these deaths and injuries as a percent of GDP. The presentation ends with conclusions and implications.
    Keywords: Health :: Health Care, Infrastructure & Transport :: Roads & Highways
    Date: 2012–06
  3. By: Juan José Cruces and Javier García-Cicco
    Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not result from local events, we introduce a global twin portfolio and a regional return. The twin portfolio for a country reports the return of a combination of world stocks that each month has the same industrial composition as that one country’s stock index. These benchmark external conditions are most volatile: they vary between a 295% appreciation (or tailwind under some interpretations) and a 30% reduction (or headwind) in asset prices over extreme four-year presidencies in our sample. We interpret the gap of national performance over these counterfactual returns as a proxy for the quality of domestic policies during a given presidency, as seen from the standpoint of equity investors. We apply this approach to seven Latin American countries from 1980 until 2011. From this perspective, Colombia, Peru and Chile stand out as the countries that have implemented the best long run policies over the sample. In addition, we provide a grading of relative presidential performance.
    Date: 2012
  4. By: Reyes, Alvaro; Lensink, Robert; Kuyvenhoven, Arie; Moll, Henk
    Abstract: Using panel data from a survey conducted in 2006 and 2008 of 177 market-oriented farmers in central Chile, we investigate investment under imperfect capital markets. Specifically we determine the impact of formal credit constraints on fixed investment. By controlling for endogeneity problems, we find credit constraints to have a significant negative impact on fixed investment. In addition, a time trend is significant, which we understand as evidence of the impact of the global financial crisis of 2007.
    Keywords: Investment, credit constraint, medium-scale farmers, Chile, Agricultural Finance, Financial Economics, International Development, Research Methods/ Statistical Methods,
    Date: 2012–08
  5. By: Nicolás Bonino Gayoso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Carolina Román (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: La construcción y sistematización de series históricas del PIB y sus componentes ha tomado un renovado vigor en los últimos años (CEPAL 2009,Smits et al. 2009,Timmer y De Vries 2007). El interés analítico en el desarrollo económico comparado de los países –asícomo los esfuerzos de contabilización macroeconómica de largo plazo – han alentado ese campo del conocimiento. En Uruguay, las series oficiales de Cuentas Nacionales comienzan en 1955 y, para el período anterior, se cuenta con varias estimaciones, con metodologías y coberturas diversas que brindan resultados diferentes. Factores como el reciente cambio de base dispuesto por el Banco Central del Uruguay, los diversos indicadores de bienestar que se basan en el desempeño de la economía y los repetidos requerimientos de dimensionar variables al tamaño de la economía, conducen a la necesidad de contar con una sistematización de las estimaciones disponibles. El propósito de este documento es generar una serie homogénea y consistente del PIB en Uruguay en el largo plazo (1870-2011) a partir de las series disponibles en pesos corrientes y constantes, para lo que se consideran mediciones a nivel global de la economía, per cápita y por actividades. Para ello, se hace una revisión completa de las series disponibles, se señalan sus limitaciones y se propone una metodología de empalme del PIB con distintas alternativas de cálculo en función de determinados supuestos de comportamiento sectorial. La validación de los resultados surge del contraste con series de otros países y de la consistencia con el relato histórico. Finalmente se presenta una panorámica de las series–elaboradas a partir de la hipótesis estándar–, sus tasas de crecimiento y su variabilidad, de acuerdo a lo que la literatura sobre crecimiento e historia económica de Uruguay ha identificado como sus “modelos” o “patrones” de desarrollo de largo plazo.
    Keywords: GDP, historical national accounts, Uruguay, productive structure
    JEL: N01 N16
    Date: 2012–05
  6. By: Jara-Rojas, Roberto; Bravo-Ureta, Boris; Moreira, Victor; Diaz, José
    Abstract: This study estimates a stochastic production frontier to measure technical efficiency (TE) using farm-level survey data for a random sample of small-scale farmers in Central Chile. Socioeconomic and productive information was collected in season 2005/06 through a survey of 319 farmers in the Province of Linares. An important issue in the paper is the effect of adoption of soil and water conservation practices on productivity. The results reveal a positive relationship between the adoption of soil and water conservation and farm-level TE. The results also indicate that improvements in TE, when associated with conservation practices, not only lead to higher output and thus improvements in net returns, but also contribute to environmental sustainability. Moreover, the analysis reveals a positive relationship between TE and human capital variables such as education and agricultural extension.
    Keywords: soil and water conservation, stochastic frontiers, technical efficiency, sustainability., Production Economics, Productivity Analysis, D24, Q2, Q12, Q16,
    Date: 2012

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.