New Economics Papers
on Central and South America
Issue of 2012‒12‒06
eleven papers chosen by

  1. Un Fondo de Reservas Regional para América Latina By Titelman, Daniel; Vera, Cecilia; Carvallo, Pablo; Perez Caldentey, Esteban
  2. The Federal Reserve, Emerging Markets, and Capital Controls: A High Frequency Empirical Investigation By Sebastian Edwards
  3. Business Cycles, International Trade and Capital Flows: Evidence from Latin America By Guglielmo Maria Caporale; Alessandro Girardi
  4. Labor Market Institutions and Informality in Transition and Latin American Countries By H. Lehmann; A. Muravyev
  5. Does Aid for Education Attract Foreign Investors? An Empirical Analysis for Latin America By Julian Donaubauer; Dierk Herzer; Peter Nunnenkamp
  6. Implicit redistribution in the Chilean Social Insurance System By Eduardo Fajnzylber
  7. Cambio estructural y demanda de trabajo calificado en Colombia en el periodo 1950 – 2007 By Edgar Vicente MARCILLO YÉPEZ
  8. Economies of Scale and Merger Efficiencies: Empirical Evidence from the Chilean Pension Funds Market By Claudio A Agostini
  9. Technical Appendix to "Trade and Market Selection: Evidence from Manufacturing Plants in Colombia" By Marcela Eslava; John Haltiwanger; Adriana Kugler; Maurice Kugler
  10. El efecto del orden de nacimiento sobre el atraso escolar en el Perú. By Luis García Núñez
  11. Evaluación de Impacto del Programa de Becas Fondo de Cesantía Solidario 2007 By Eduardo Fajnzylber

  1. By: Titelman, Daniel; Vera, Cecilia; Carvallo, Pablo; Perez Caldentey, Esteban
    Abstract: This paper analyzes the feasibility, implications and challenges of expanding the current Latin American Reserve Fund (FLAR) to include five other countries: Argentina, Brasil, Chile, México and Paraguay. The paper argues that regional reserve funds should not be conceived as a unique line of defense to confront Balance of Payments difficulties. They are an integral part of a wider set of financial instruments and support mechanisms. They contribute to fill an important gap in the international financial architecture by providing additional lines of defense within a multi-layered system of financial cooperation.
    Keywords: Fondo de reservas; Amaerica Latina; FLAR;
    JEL: O1 O16
    Date: 2012–10–20
  2. By: Sebastian Edwards
    Abstract: In this paper I use weekly data from seven emerging nations – four in Latin America and three in Asia – to investigate the extent to which changes in Fed policy interest rates have been transmitted into domestic short term interest rates during the 2000s. The results suggest that there is indeed an interest rates “pass through” from the Fed to emerging markets. However, the extent of transmission of interest rate shocks is different – in terms of impact, steady state effect, and dynamics – in Latin America and Asia. The results also indicate that capital controls are not an effective tool for isolating emerging countries from global interest rate disturbances. Changes in the slope of the U.S. yield curve, including changes generated by a “twist” policy, affect domestic interest rates in emerging countries. I also provide a detailed case study for Chile.
    JEL: F30 F32
    Date: 2012–11
  3. By: Guglielmo Maria Caporale; Alessandro Girardi
    Abstract: This paper adopts a flexible framework to assess both short- and long-run business cycle linkages between six Latin American (LA) countries and the four largest economies in the world (namely the US, the Euro area, Japan and China) over the period 1980:I-2011:IV. The result indicate that within the LA region there are considerable differences between countries, success stories coexisting with extremely vulnerable economies. They also show that the LA region as a whole is largely dependent on external developments, especially in the years after the great recession of 2008 and 2009. The trade channel appears to be the most important source of business cycle co-movement, whilst capital flows are found to have a limited role, especially in the very short run.
    Keywords: International business cycle, Latin America, VAR models, trade and financial linkages
    JEL: C32 E32 F31 F41
    Date: 2012
  4. By: H. Lehmann; A. Muravyev
    Abstract: This paper analyzes, using country-level panel data from transition economies and Latin America, the impact of labor market institutions on informal economic activity. The measure of informal economic activity is taken from Schneider et al. (2010), the most comprehensive study to date. The data on institutions, which cover employment protection legislation (EPL), the tax wedge, the unemployment benefit level, unemployment benefit duration and union density, are assembled at the IZA (transition countries) and the World Bank (LAC countries). We find that a more regulated labor market (higher EPL) increases the size of the informal economy. There is also evidence that a larger tax wedge increases informality. The tax wedge elasticity of informal economy, when evaluated at the sample mean, is rather modest, around 0.1%. Our results are broadly in line with the literature, which identifies labor market regulation and the tax wedge as important drivers of informality.
    JEL: E24 J21 J42 O17 P20
    Date: 2012–11
  5. By: Julian Donaubauer; Dierk Herzer; Peter Nunnenkamp
    Abstract: We address the question of whether foreign aid helps attract foreign direct investment (FDI). This could be achieved if well targeted aid removed critical impediments to higher FDI inflows. In particular, test the hypothesis that aid for education is an effective means to increase FDI flows to host countries in Latin America where schooling and education appears to be inadequate from the viewpoint of foreign investors. We employ panel data techniques covering 21 Latin American countries over the period from 1984 to 2008. We find that aid for education has a statistically significant positive effect on FDI. This effect is robust to potential outliers, sample selection, alternative specifications and different estimation methods
    Keywords: foreign aid, foreign direct investment, aid effectiveness, human capital
    JEL: E24 F21 F35 O15 O19
    Date: 2012–11
  6. By: Eduardo Fajnzylber (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–03
  7. By: Edgar Vicente MARCILLO YÉPEZ
    Abstract: En este trabajo se analiza el impacto que tuvo el cambio estructural, entendido como el desarrollo de un sector industrial moderno, en el nivel de trabajo calificado y no calificado en Colombia en el periodo 1950 – 2007. Las estadísticas de crecimiento económico, participación del sector industrial y mercado laboral, trazan un vínculo estrecho entre transformación industrial y trabajo; la mayoría de estudios atribuyen la caída del nivel de trabajo a factores relacionados con los costos salariales, no salariales y la rigidez del mercado laboral. En este trabajo se plantea una visión alternativa, en la que se estudia el decrecimiento del trabajo de largo plazo asociado al proceso de desindustrialización y caída de la diversificación industrial a partir de 1980. Los datos no rechazan la hipótesis estructuralista y muestran que la estructura de la economía incide en la generación o demanda de trabajo en el largo plazo, particularmente en el trabajo calificado.
    Date: 2012–09–27
  8. By: Claudio A Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–10
  9. By: Marcela Eslava (Universidad de Los Andes); John Haltiwanger (University of Maryland); Adriana Kugler (Georgetown University); Maurice Kugler (United Nations Development Programme)
    Abstract: Technical appendix for the Review of Economic Dynamics article
    Date: 2012
  10. By: Luis García Núñez (Departamento de Economía - Pontificia Universidad Católica del Perú)
    Abstract: El objetivo de esta investigación es estudiar si el orden de nacimiento tiene algún efecto sobre el atraso escolar. En este documento, el atraso escolar se refiere a la matricula de un alumno a un grado por debajo del recomendado para su edad. La potencial asociación entre el orden de nacimiento y el logro educativo aun no es claro, debido a los argumentos contradictorios y la evidencia empírica en esta materia. Usando desviaciones con respecto a los promedios del hogar, se removió el efecto de variables no observables las cuales son comunes a todos los miembros del hogar. Adicionalmente, con el fin de identificar el efecto del orden de nacimiento, se controló por la edad y el número de hermanos puesto que estas variables están fuertemente correlacionadas con el orden de nacimiento. Los resultados muestran que, en Perú, los niños que nacen primero en un hogar tienen niveles más altos de retraso escolar en comparación con niños de la misma edad y/o con otros niños de hogares con el mismo número de hermanos. Los resultados sugieren que el espaciamiento entre hermanos también afecta al retraso escolar.
    Keywords: Atraso escolar, orden de nacimiento, espaciamiento entre hermanos.
    Date: 2012
  11. By: Eduardo Fajnzylber (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–03

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.