New Economics Papers
on Central and South America
Issue of 2013‒04‒13
twelve papers chosen by

  1. Commodity prices and the business cycle in Latin America: Living and dying by commodities? By Camacho, Maximo; Pérez-Quirós, Gabriel
  2. Productive Development Policies in Latin America: Past and Present By Manuel R. Agosin
  3. La Política de Seguridad Democrática 2002-2006: efectos socioeconómicos en las áreas rurales By Gerson Javier Pérez Valbuena
  4. Convergencia y trampas espaciales de pobreza en Colombia: Evidencia reciente By Luis Armando Galvis; Adolfo Meisel
  5. Trade, competition and quality-upgrading: A theory with evidence from Colombia By Daniel Yi Xu; Ana Cecilia Fieler; Marcela Eslava
  6. Potentiality of reverse mortgages to supplement pension: the case of Chile By Javier Alonso; Maria Lamuedra; David Tuesta
  7. Violent Behaviour: The effect of civil conflict on domestic violence in Colombia By Dominik Noe; Johannes Rieckmann
  8. Private vs Public Antitrust Enforcement: Evidence from Chile By Aldo González; Alejandro Micco
  9. Credit Default and Business Cycles: an investigation of this relationship in the Brazilian corporate credit market By Jaqueline Terra Moura Marins; Myrian Beatriz Eiras das Neves
  10. Potencialidad del desarrollo de hipotecas inversas como complemento pensionario. El caso de Chile By Javier Alonso; Maria Lamuedra; David Tuesta
  11. Proyecciones de tablas generacionales dinamicas y riesgo de longevidad en Chile By Javier Alonso; David Tuesta; Diego Torres; Begona Villamide
  12. Income Inequality and Poverty in Colombia - Part 2. The Redistributive Impact of Taxes and Transfers By Isabelle Joumard; Juliana Londoño Vélez

  1. By: Camacho, Maximo; Pérez-Quirós, Gabriel
    Abstract: We analyze the dynamic interactions between commodity prices and output growth of the seven greatest exporters Latin American countries: Argentina, Brazil, Colombia, Chile, Mexico, Peru and Venezuela. Using a novel definition of Markov-switching impulse response functions, we find that the responses of their respective output growths to commodity price shocks are time dependent, size dependent and sign dependent. Overall, the major evidence of asymmetries in output growth responses occurs when commodity price shocks lead to regime shifts. Accordingly, we consider that the design of optimal counter-cyclical stabilization policies in this region should take into account that the reactions of the economic activity vary considerably across business cycle regimes.
    Keywords: Emerging Markets; Non linearities
    JEL: E32 F43
    Date: 2013–02
  2. By: Manuel R. Agosin
    Abstract: This paper reviews industrial policy in Latin America from the Great Depression to our days. Its purpose is to derive some lessons for what Latin American and Caribbean countries (LAC) should do in this area. It has become clear over the last few years that LAC, if they are to accelerate their growth rates, need more than a good macroeconomic framework and the protection of property rights: they need to be more proactive in transforming their production structures, still too dependent on primary commodity exports or the assembly of final goods from imported components, sectors that are ill-suited to the productive development jumps that have been associated with high growth in the developing world over the past 60 years.
    Date: 2013–03
  3. By: Gerson Javier Pérez Valbuena
    Abstract: This paper exploits the structural change in the number of rural seizures to measure the impact of strengthening the security policy between 2002 and 2006 on the rural labor market in Colombia. The new policy produced dissimilar effects across gender, age-groups, and types of occupation. In general, there was a socioeconomic loss in terms of reductions in the adults‟ labor supply and income, while for youths and children there was a differentiated effect by gender in the labor participation. No significant connections were found with school enrollment. RESUMEN: Haciendo uso del cambio estructural en el número de incautaciones, este trabajo mide el impacto del fortalecimiento de la política de seguridad entre 2002 y 2006 sobre el mercado laboral rural en Colombia. La nueva política produjo efectos diferenciales según el género, la edad y los tipos de ocupación de los individuos. Se evidencia una pérdida socioeconómica en términos de reducciones simultáneas de la oferta laboral y los ingresos de los adultos, mientras que para los jóvenes y los niños se presentó un efecto diferenciado, por género, en la participación laboral. No se encontraron efectos significativos en la matrícula escolar.
    Date: 2013–01–07
  4. By: Luis Armando Galvis; Adolfo Meisel
    Abstract: This paper studies the evidence on regional convergence in the last two decades. The results point to a high degree of persistence in regional inequalities. This was confirmed through the analysis of spatial econometrics, which showed that there is a strong spatial dependence in the distribution of poverty in Colombia. The results show that it may take more than two centuries for Choco to catch-up with Bogota’s per capita income. RESUMEN: En este trabajo se analiza la evidencia sobre convergencia regional en las dos últimas décadas. Los resultados tienden a confirmar un alto grado de persistencia en las desigualdades regionales. Estos hallazgos fueron reforzados a través del análisis de econometría espacial, donde se corroboró que hay una marcada dependencia espacial en la distribución de la pobreza en Colombia. De acuerdo con los resultados, el grado de persistencia en la pobreza es tal que el Chocó tendría un rezago en el ingreso de más de dos siglos, en relación a Bogotá.
    Date: 2012–12–03
  5. By: Daniel Yi Xu (Duke University); Ana Cecilia Fieler (University of Pennsylvania); Marcela Eslava (Universidad de Los Andes)
    Abstract: We use a panel data on manufacturing plants in Colombia to estimate the model and evaluate its predictions regarding a counterfactual decrease in tariffs.
    Date: 2012
  6. By: Javier Alonso; Maria Lamuedra; David Tuesta
    Abstract: Reverse mortgages have been established as an alternative for generating liquid flows of income during retirement in some developed countries. Given that the risks associated with lower income during old age are usually covered by a wide range of sources of funding, this paper analyses the potentiality of reverse mortgages as alternative income during old age. This work focuses on the case of Chile, based on information extracted from national surveys that map out the behaviour of representative individuals divided into income quintiles. The changes from 2010 to 2050 are observed on the basis of reasonable assumptions. The pension replacement rates have been found to have increased by nearly 30 points as a result of incorporating life annuities derived from property assets. This result supports the concept of not just fixing policies aimed at improving formal pension schemes, but facilitating private financial mechanisms that generate other suitable forms of income during old age derived from other assets.
    Keywords: reverse mortgage, private pensions, pension funds, defined contribution
    JEL: G23 J32 G22 D14 G21
    Date: 2013–02
  7. By: Dominik Noe (Georg-August-University Göttingen); Johannes Rieckmann (Georg-August-University Göttingen)
    Abstract: In this paper we analyse the impact of civil conflict on domestic violence in Colombia and find that higher conflict intensity increases the likelihood of women to become a victim of domestic violence. The idea behind this is that the experience of conflict changes behaviour, attitude and culture. As an observable outcome of this change in behaviour we look at domestic violence. Taking advantage of the uneven spatial distribution of the conflict we assess its impact, using micro data from Colombia.
    Keywords: Domestic violence; conflict; Colombia; crime; spatial identification
    Date: 2013–03–18
  8. By: Aldo González; Alejandro Micco
    Abstract: This article measures the impact of the agency responsible for enforcing competition law, in the outcome of antitrust trials in Chile. Using statistics on lawsuits since the inception of the new Competition Tribunal in 2004, we find that the involvement of the public agency increases the probability of obtaining a guilty verdict in an antitrust lawsuit by 40 percentage points. Conditional to the issuance of a verdict, the participation of the prosecutor raises the likelihood of a conviction by 38 percentage points. The results are robust to possible selection bias by the public agency. The prosecutor is inclined to takes part in cases involving sensitive markets and in accusations of collusion. The State-related character of the accused entity, in addition to its size, does not affect the probability of intervention by the prosecutor in a lawsuit.
    Date: 2013–03
  9. By: Jaqueline Terra Moura Marins; Myrian Beatriz Eiras das Neves
    Abstract: The aim of this paper is to examine empirically whether the default of borrower companies in the Brazilian market rises in downturns. To this end, a probit model for the probability of default is developed based on credit microdata taken from the Credit Information System of the Central Bank of Brazil (SCR) and on macroeconomic variables. Our results provide evidence of a strong negative relationship between business cycle and credit default, going in accord to the literature dealing with corporate data. These effects are stronger than those found in our previous article for the case of default of individuals. This is an expected result, since the retail credit is more sprayed than the corporate credit. The macroeconomic variables that have the greatest effect on corporate defaults were GDP growth and inflation.
    Date: 2013–03
  10. By: Javier Alonso; Maria Lamuedra; David Tuesta
    Abstract: Las hipotecas inversas se han venido constituyendo en una alternativa para generar flujos de ingresos liquidos durante la etapa de jubilacion en algunos paises desarrollados. Teniendo en cuenta que los riesgos de menores recursos durante la etapa de vejez suelen ser enfrentados con un abanico amplio de fuentes de financiamiento, el presente trabajo analiza las potencialidades del desarrollo de las hipotecas inversas como alternativa de ingresos para la vejez. El trabajo se centra en el estudio de caso de Chile a partir de informacion de encuestas nacionales en las que se traza el comportamiento de individuos representativos segmentados por quintiles de ingresos. Bajo supuestos razonables se observa su evolucion entre el periodo 2010-2050. Se encuentra que las tasas de sustitucion de las pensiones se incrementan en casi 30 puntos como consecuencia de incorporar rentas vitalicias con base a los activos inmobiliarios. Este resultado refuerza el concepto de establecer no solamente politicas enfocadas en mejorar los esquemas formales de pensiones, sino tambien en facilitar mecanismos financieros privados que permitan generar otros flujos adecuados de ingresos para la vejez a partir de otros activos.
    Keywords: hipoteca inversa, pensiones privadas, fondos de pensiones, contribucion definida
    JEL: G23 J32 G22 D14 G21
    Date: 2013–02
  11. By: Javier Alonso; David Tuesta; Diego Torres; Begona Villamide
    Abstract: El incremento del riesgo de longevidad viene imponiendo retos importantes en las economias. Las industrias como la de seguros y pensiones, que se encuentran mas directamente relacionadas a la gestion de los riesgos de vejez, han venido experimentando desde hace varios anos efectos directos, lo que los ha llevado al desarrollo de tecnicas enfocadas a la construccion de tablas de mortalidad, que les permita proyectar las tendencias futuras de la esperanza de vida al nacer y con ello reducir el nivel de incertidumbre que, de manera natural, incorpora este mercado. Los paises desarrollados han liderado las mejoras tecnicas de estimacion de estas tablas, situacion que es llevada con bastante retraso en el caso de Latinoamerica. Sabiendose que estas no logran todavia desarrollar tablas ponderadas por aspectos socio-medicos, se presume como muy probable que a la fecha continuen acumulando rezagos importantes. Es en ese sentido que el presente estudio busca estimar, a partir de modelos de proyeccion del tipo ARMAX (p,q) y de la metodologia de Contrastes No Paramétricos, una proyeccion de tablas de mortalidad. Para ello el estudio toma el caso de Chile, que cuenta con mayor informacion para el desarrollo del modelo. Las estimaciones encuentran que las tablas de mortalidad oficiales en Chile podrian estar recogiendo rezagos importantes hacia el 2050, los que traerian importantes efectos negativos sobre la industria de pensiones y seguros, en el hipotetico caso de no actualizarse. En otro ejercicio realizado, haciendo uso de la tabla de mortalidad estimada en este trabajo, se encuentra que, para que las pensiones en Chile no pierdan su capacidad adquisitiva, seria necesario incrementar la tasa de aportacion en 8 puntos porcentuales en el caso de los hombres y en 4 puntos porcentuales en el caso de las mujeres. Considerando que el caso de Chile es el país en la region que tiene mejores desarrollos en lo que respecta a tablas de mortalidad, los efectos negativos en el resto de Latinoamerica podrian ser mas preocupantes.
    Keywords: Pensiones, seguros, Riesgo de longevidad, Tablas de mortalidad, Latinoamerica, Chile
    JEL: G23 J32 G22
    Date: 2013–03
  12. By: Isabelle Joumard; Juliana Londoño Vélez
    Abstract: Income inequality in Colombia has declined since the early 2000s but remains very high by international standards. While most of the inequality originates from the labour market, wealth – and thus capital income – is also highly concentrated and the tax and transfer system has little redistributive impact. The tax-to-GDP ratio remains low. Consumption taxes, which tend to be regressive, account for the bulk. The progressivity of income taxes had been undermined by generous tax reliefs, which benefit the well-off most and increase tax avoidance opportunities. The tax system should be reformed to enhance progressivity and raise more revenue which could be used to expand social policies. Cash transfers to households are small and dominated by non-redistributive schemes such as contributory pensions. Education coverage has increased steadily but quality and equity in access at the tertiary level remain important issues. Though significant progress has been made towards universal health coverage, the financing and organisation of the health care system could be improved to raise the quality of care and reduce adverse incentives to remain in the informal sector.<P>Inégalités de revenu et pauvreté en Colombie - Partie 2. L'impact redistributif des impôts et prestations sociales<BR>Les inégalités de revenu se sont atténuées depuis le début des années 2000 mais elles restent beaucoup plus fortes que dans la plupart des autres pays. Si le fonctionnement du marché du travail est le principal facteur à l'origine de ces inégalités, il convient de noter que la richesse – et donc les revenus du capital – est aussi très inégalement répartie alors que les impôts et prestations sociales n'ont qu'un faible impact redistributif. Le montant des prélèvements obligatoires en pourcentage du PIB reste faible. Les taxes sur la consommation, qui tendent à être régressives, ont un poids prépondérant. La progressivité des impôts sur le revenu est amoindrie par les dispositifs d'allègements qui bénéficient aux plus fortunés et favorisent l'évasion fiscale. Le système fiscal devrait être réformé afin de renforcer sa progressivité et d'augmenter les recettes qui pourraient être utilisées pour mettre en place des politiques sociales plus ambitieuses. Les prestations sociales sont peu élevées et dominées par des programmes non-redistributifs, en particulier les pensions contributives. Les taux de scolarisation ont augmenté mais la qualité de l'éducation et l'équité d'accès, en particulier pour l'université, restent des défis importants. De même pour la santé, si des progrès remarquables ont été faits concernant la couverture, rendue presque universelle, le financement et l'organisation du système de santé pourraient être réformés afin d'augmenter la qualité des soins et de réduire les incitations au travail informel.
    Keywords: health, education, pensions, property tax, Colombia, value added tax, personal income tax, inequality, conditional cash transfers, water and electricity subsidies, santé, éducation, pensions, impôt sur le revenu, Colombie, impôt sur la propriété, inégalités, prestations sociales conditionnelles, subventions pour l'eau et l'électricité, impôt sur la valeur ajoutée
    JEL: H23 H24 H31 H4 H51 H53 H55 I14 I24 I38
    Date: 2013–03–27

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.