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on Central and South America |
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Issue of 2013‒02‒16
six papers chosen by |
| By: | Garcia-Fuentes, Pablo A.; Kennedy, P. Lynn; Ferreira, Gustavo F.C. |
| Abstract: | This paper investigates the effect of remittances in attracting U.S. foreign direct investment flows to Latin America and the Caribbean (LAC). It uses an unbalanced panel data set for fifteen countries covering the period 1983-2010. The results suggest a positive and significant impact of remittances on U.S. FDI flows to LAC, but it depends upon the level of per capita GDP in the host country. Thus, a threshold of per capita GDP is needed for a country to benefit from the positive effect of remittances on U.S. FDI flows. Also, host country demand positively affects U.S. FDI flows to LAC, which supports the market size hypothesis. |
| Keywords: | Foreign direct investment, Remittances, Market size, United States, Latin America and the Caribbean, International Development, F21, F23, F24, O54, |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea13:142985&r=lam |
| By: | Esteban Pérez Caldentey; Daniel Titelman; Pablo Carvallo |
| Abstract: | Using two standard cycle methodologies (classical and deviation cycle) and a comprehensive sample of 83 countries worldwide, including all developing regions, we show that the Latin American and Caribbean cycle exhibits two distinctive features. First, and most important, its expansion performance is shorter and, for the most part, less intense than that of the rest of the regions considered; in particular, that of East Asia and the Pacific. East Asia's and the Pacific's expansions last five years longer than those of Latin American and the Caribbean, and its output gain is 50 percent greater. Second, the Latin American and Caribbean region tends to exhibit contractions that are not significantly different from those other regions in terms of duration and amplitude. Both these features imply that the complete Latin American and Caribbean cycle has, overall, the shortest duration and smallest amplitude in relation to other regions. The specificities of the Latin American and Caribbean cycle are not confined to the short run. These are also reflected in variables such as productivity and investment, which are linked to long-run growth. East Asia's and the Pacific's cumulative gain in labor productivity during the expansionary phase is twice that of Latin American and the Caribbean. Moreover, the evidence also shows that the effects of the contraction in public investment surpass those of the expansion, leading to a declining trend over the entire cycle. In this sense, we suggest that policy analysis needs to increase its focus on the expansionary phase of the cycle. Improving our knowledge of the differences in the expansionary dynamics of countries and regions can further our understanding of the differences in their rates of growth and levels of development. We also suggest that, while the management of the cycle affects the short-run fluctuations of economic activity and therefore volatility, it is not trend neutral. Hence, the effects of aggregate demand management policies may be more persistent over time, and less transitory, than currently thought. |
| Keywords: | Latin American Business Cycle; Classical Cycle; Deviation Cycle; Expansions; Trend and Cycle; Productivity; Investment |
| JEL: | E32 F44 O11 O54 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_749&r=lam |
| By: | Mendali, Rebati; Ames, Glenn C.W.; Gunter, Lewell F. |
| Abstract: | We measure Malmquist index of total factor productivity (TFP) changes in the agricultural sector of Brazil and Argentina during 1971-2002. The TFP change index is further decomposed into efficiency change and technical change. We then compare the cumulative TFP growth and its components in both countries. Results show that agricultural TFP change as well as efficiency and technical change accelerated in Brazilian agriculture, where as Argentinean agriculture experienced a negative trend in TFP growth over the sample period. Efficiency change in Argentina’s agriculture was found to be stagnant over time. The increasing productivity in Brazil is due to strong policy reform in 1980s. Argentina’s imbalanced economy, including biased reforms explains the negative TFP growth and technical regress during this period. |
| Keywords: | Total Factor Productivity, Data Envelopment Analysis, Agriculture in Brazil and Argentina, Policy Reform, Agricultural and Food Policy, International Development, Productivity Analysis, C61, O47, O57, Q16, Q18, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea13:143036&r=lam |
| By: | Carlos Medina; Jorge Andrés Tamayo; Christian Posso |
| Abstract: | We use a unique data set at the individual level to estimate an empirical model explaining the probability of young individuals to become criminals as a function of the presence of adult criminals in their neighborhoods, an a complete set of control variables, including census sector fixed effects. We use the census of criminals captured in Medellín between 2000 and 2010 to construct our peer’s variables, and find a strong and robust positive effect of the presence of adult criminal neighbors on the probability of becoming criminal. The result is robust across different specifications of the presence of criminals, and with respect to the probability of committing different types of crimes, even controlling for contextual and group effects. Both modeling peer effects as the sum of friends’ efforts and modeling them as deviations from the means, affect the likelihood to become criminal, although with differential importance by type of crime. |
| Keywords: | Crime, Social Interactions. Classification JEL: C31, K40, K42 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:755&r=lam |
| By: | Hernando Vargas Herrera; Andrés González; Diego Rodríguez |
| Abstract: | Banco de la República’s FX intervention policy is described, with a focus on its objectives and main features. Then, based on a survey of the effectiveness of sterilized intervention in Colombia, it is argued that this tool is not useful to cope with the challenges posed by medium term external factors such as quantitative easing in advanced economies, reduced risk premiums in emerging economies or high international commodity prices. The duration of the impact of sterilized intervention on the exchange rate (if any) is much shorter than the effects of those factors. Finally, it is argued that if sterilized FX intervention is effective due to the operation of the portfolio balance channel, it may also have an expansionary effect on credit supply and aggregate demand. In this case, the macroeconomic outcomes of intervention depend on the monetary policy response. This issue is studied with a small open economy DSGE. In general, FX intervention implies a volatility of credit and consumption that is higher than under a more efficient allocation and under alternative monetary regimes without intervention. Furthermore, the more inclined the central bank is to meet an inflation target, the stronger its response to the expansionary effects of the intervention and, consequently, the lower the impact of the intervention on the exchange rate. |
| Keywords: | Monetary Policy, Foreign Exchange Intervention. Classification JEL: F31; F32; F33; E37 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:757&r=lam |
| By: | Carvalho, Leandro (RAND); Soares, Rodrigo R. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)) |
| Abstract: | We use data from a unique survey of members of drug-trafficking gangs in favelas (slums) of Rio de Janeiro, Brazil, to characterize drug-trafficking jobs and study the selection into gangs, analyzing what distinguishes gang-members from other youth living in favelas. We also estimate wage regressions for gang-members and examine their career path: age at entry, progression within the gangs' hierarchy, and short- to medium-term outcomes. Individuals from lower socioeconomic background and with no religious affiliation have higher probability of joining a gang, while those with problems at school and early use of drugs join the gang at younger ages. Wages within the gang do not depend on education, but are increasing with experience and involvement in gang-related violence. The two-year mortality rate in the sample of gang-members reaches 20%, with the probability of death increasing with initial involvement in gang violence and with personality traits associated with unruliness. |
| Keywords: | crime, youth, gangs, drugs, trafficking, Brazil |
| JEL: | J4 K42 O15 O17 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7189&r=lam |