New Economics Papers
on Central and South America
Issue of 2014‒05‒04
twelve papers chosen by

  1. From Volatility to Stabilization: Cyclicality of Fiscal Policy in Latin America over the Last Decades By Bruno Martorano
  2. Informal Interference in the Judiciary in New Democracies: A Comparison of Six African and Latin American Cases By Mariana Llanos; Cordula Tibi Weber; Charlotte Heyl; Alexander Stroh
  3. Overvaluation of the real exchange rate and the Dutch Disease: the Colombian case By Thomas Goda; Alejandro Torres
  4. Forecasting Chilean Inflation with International Factors By Pablo Pincheira; Andrés Gatty
  5. Co-movements between Latin American and U.S. stock markets: convergence after the financial crisis By Andrés Ramírez Hassan; Javier Pantoja Robayo
  6. Acceso a servicios financieros en Colombia By Carlos Gustavo Cano; Maria del Pilar Esguerra Umaña; Nidia García; Leonardo Rueda
  7. Peers Effects on a Fertility Decision: an Application for Medellín Colombia By Leonardo Morales
  8. Social Assistance and Informality: Examining the link in Colombia By Monica Ospina Londoño; Fabiola Saavedra-Caballero
  9. Escaneo de Políticas y Meta-Análisis: Juventud y Políticas de Empleo en América Latina (Policy scan and meta-analysis: Youth and Employment policies in Latin America) By Evelyn Vezza
  10. An exploration on interbank markets and the operational framework of monetary policy in Colombia By Camilo González; Luisa F. Silva; Carmiña O. Vargas; Andrés M. Velasco
  11. Bolsa Família, Escolha Ocupacional e Informalidade no Brasil By Ana Luiza Neves de Holanda Barbosa; Carlos Henrique L. Corseuil
  12. Evolução do Acesso de Jovens à Educação Superior no Brasil By Paulo Roberto Corbucci

  1. By: Bruno Martorano
    Abstract: Latin American countries experienced important changes over the last decade. The implementation of fiscal reforms, public debt reduction and the high level of accumulated reserves gave them more policy space than in the past. As a result, Latin American countries were able to implement countercyclical policies to face the negative economic and social consequences associated with the recent macroeconomic shock. Some countries performed better than others. In particular, Social Democratic and Centrist governments enjoyed more fiscal space; they had realized larger budget surpluses over the good years and were able to cope with the crisis without impairing their fiscal conditions.
    Keywords: fiscal policy, fiscal space, countercyclical policy, policy regime, Latin America
    JEL: E62 E63 O23
    Date: 2014
  2. By: Mariana Llanos (GIGA Institute of Latin American Studies); Cordula Tibi Weber (GIGA Institute of Latin American Studies); Charlotte Heyl (GIGA Institute of African Affairs); Alexander Stroh (GIGA Institute of African Affairs)
    Abstract: This paper assesses the extent to which elected power holders informally intervene in the judiciaries of new democracies, an acknowledged but under-researched topic in studies of judicial politics. The paper first develops an empirical strategy for the study of informal interference based on perceptions recorded in interviews, then applies the strategy to six third-wave democracies, three in Africa (Benin, Madagascar and Senegal) and three in Latin America (Argentina, Chile and Paraguay). It also examines how three conditioning factors affect the level of informal judicial interference: formal rules, previous democratic experience, and socioeconomic development. Our results show that countries with better performance in all these conditioning factors exhibit less informal interference than countries with poorer or mixed performance. The results stress the importance of systematically including informal politics in the study of judicial politics.
    Keywords: judicial politics, constitutional court, supreme court, Latin America, Franco-phone Africa, democratization, separation of powers, informal politics
    Date: 2014–04
  3. By: Thomas Goda; Alejandro Torres
    Abstract: In this study, we estimate the impact of the 2004-2012 energy and mining boom on the real effective exchange rate in Colombia and the sectoral composition of its economy. To this end, we introduce the new “extended Dutch Disease” concept, according to which a currency appreciation may not only occur due to traditional “spending” and “relocation” effects but also due to exports and massive inflows of external capital that finances the booming sector. The empirical results indicate that Colombia experienced an overvaluation of its real exchange rate, which in turn negatively affected the competitiveness of its manufacturing and agricultural sector.
    Keywords: Dutch Disease; real effective exchange rate; capital flows; de-industrialization; Latin America; Colombia
    JEL: F4 O13 O14 O54
    Date: 2013–11–12
  4. By: Pablo Pincheira; Andrés Gatty
    Abstract: In this paper we build forecasts for Chilean year-on-year inflation using simple time-series models augmented with different measures of international inflation. Broadly speaking, we construct two families of international inflation factors. The first family is built using year-on-year inflation of 18 Latin American (LA) countries (excluding Chile). The second family is built using year-on-year inflation of 30 OECD countries (excluding Chile). We show sound in-sample and pseudo out-ofsample evidence indicating that these international factors do help forecast Chilean inflation at several horizons. Incorporating the international factors reduce the Root Mean Squared Prediction Error of pure univariate SARIMA models statistically speaking. We also show that the predictive pass-through from international to local inflation has increased in the recent years. As a final exercise we construct another international inflation factor as an average of the inflation of fifteen countries from which Chile gets a high percentage of its imports. With the aid of this factor the models outperform our univariate benchmarks but also underperform the results obtained with the broader factors built with LA or OECD countries, suggesting that imported inflation is not the only channel explaining our findings.
    Date: 2014–02
  5. By: Andrés Ramírez Hassan; Javier Pantoja Robayo
    Abstract: Currently, the world is facing a continuous process of integration in different aspects and financial markets are no exception to this development. Despite the fact that global integration is gradual, one can find some specific events that might help to accelerate this trend. This paper shows that after the financial crisis of 2008, which mainly occurred in the United States, the Latin American stock markets exhibit a higher level of convergence, measured by the correlation between the annual returns of their stock market indices. Additionally, we find convergence in the coefficient of sensitivity between Latin American and U.S. stock markets, using dynamic linear models at the regional level. In particular, we uncover consistent movements in the levels of sensitivity between the daily annual returns of the Latin American indices and the S&P index after the financial crisis. This kind of convergence might be a positive sign to accelerate the integration process in Latin America stock markets, which has had a slow development since its beginning a few years ago.
    Keywords: Dynamic Linear Models; Latin American Stock Markets
    JEL: G01 G15
    Date: 2013–11–06
  6. By: Carlos Gustavo Cano; Maria del Pilar Esguerra Umaña; Nidia García; Leonardo Rueda
    Abstract: El acceso a los servicios financieros constituye un derecho fundamental contemporáneo y un instrumento insustituible en la asignación de los recursos que permitan la acumulación de capital. Así las cosas, desde el ángulo del crecimiento y la igualdad, el alcance social de dicha herramienta resulta crucial para el desarrollo económico en términos de equidad y sostenibilidad. Por tal motivo, la exclusión financiera equivale a una forma de exclusión social. Lo cual justifica que con la más alta prioridad el Estado garantice a través del marco regulatorio el acceso a los servicios financieros de los segmentos más vulnerables de la población. En este trabajo, se discute la importancia de la definición de inclusión financiera en contraposición al concepto tradicional de bancarización; y se analizan las variables que determinan la inclusión financiera desde el punto de vista de la demanda, a través de la agregación de los servicios financieros.
    Keywords: Inclusión financiera, Capacidades financieras, Regulación en Colombia.
    JEL: D14 D18 G28
    Date: 2013–07–31
  7. By: Leonardo Morales
    Abstract: This paper addresses the estimation of peer group effects on a fertility decision. The peer group is composed of neighbors with similar socio-demographic characteristics. In order to deal with the endogeneity problem associated to the estimation of neighborhood effects, an instrumental variables procedure is performed. To control for the reflection problem, usual in linear effects models, this paper uses an identification strategy that relies on the definition of peer groups at the individual level. This paper provides evidence that peer effects explain the age at which poor women in Medellín (Colombia) decide to have their firstborn. These social forces are hazardous factors that may increase the incidence of adolescent pregnancy.
    Keywords: Fertility, Family Planning, Demographic Economics, Social Interaction Models
    JEL: J13 J13 C31
    Date: 2013–08–22
  8. By: Monica Ospina Londoño; Fabiola Saavedra-Caballero
    Abstract: This paper presents evidence on the labor market effects of social assistance programs in the short and medium run. We evaluate the impacts of a Conditional Cash Transfer program (Familias en Acción) on informality in Colombia. We exploit an exogenous shock linked to cash transfer benefits that the government provides to poor people to evaluate the effect of these benefits on informality. We argue that being a beneficiary of social programs may create perverse incentives that drive people towards informality through a substitution effect. Survey data of “Familias en Acción” program was used to identify whether the program had any effect on workers’ labor decisions concerning participation (or the lack thereof) in the informal labor market in Colombia after one and four years after its implementation. We apply matching algorithms and difference-in-differences estimations to evaluate the effect of the program. We find that a worker’s informality condition may be affected by receiving CCT income and by the structure of the colombian health system.
    Keywords: informality; conditional cash transfers; evaluation
    JEL: E26 C14 H43
    Date: 2013–08–20
  9. By: Evelyn Vezza (CEDLAS)
    Abstract: Las iniciativas de empleo juvenil han adquirido protagonismo en el espacio de políticas al mostrarse adversos y persistentes los resultados obtenidos por los jóvenes en el mercado de trabajo. Los principales objetivos del documento son identificar los patrones de las iniciativas recientes en la región e identificar qué lecciones pueden ser aprendidas de ellas. Para lograr estos propósitos, el documento actualiza y sistematiza 65 iniciativas desarrolladas en 18 países de América Latina desde 2008 a la actualidad, y realiza una revisión de los hallazgos emergentes de las evaluaciones de impacto de 12 iniciativas, publicados en este período de referencia. Las políticas e instituciones sobre regulaciones laborales para trabajadores jóvenes han sido impulsadas con mayor frecuencia para superar las barreras de la demanda laboral para jóvenes, más allá de que los programas de políticas activas de mercado de trabajo han sido la respuesta más recurrente en el conjunto de iniciativas analizadas. Las iniciativas orientadas a la oferta laboral son las que tienen una mayor participación en el total de intervenciones, y la mayoría de los países ha desarrollado alguna iniciativa para la promoción de la iniciativa empresarial entre los jóvenes. En muchos países, los programas actualmente en funcionamiento son el resultado de nuevas ediciones y revisiones de programas preexistentes. Aunque la evidencia rigurosa sobre el desempeño de los programas es aún escasa, reside un potencial de aprendizaje en los puntos comunes resaltados en las nuevas evaluaciones y revisiones de políticas en el mundo. La efectividad de los programas sobre los resultados del mercado de trabajo parecen encontrarse más correlacionada a la focalización y cómo la intervención fue implementada que al tipo de intervención. Las iniciativas integrales, que combinan diferentes intervenciones también muestran un mejor desempeño que los programas que desarrollan un único componente. Sin embargo, debido a que la principal lección aprendida en la experiencia internacional es que los efectos de las intervenciones dependen mayormente de variables específicas a cada país, se necesitan mayores esfuerzos de investigación para evaluar las intervenciones en sus específicos contextos de país. (Youth employment initiatives have become protagonists in the policy space, as the adverse outcomes faced by youth in the labour market remain persistent. The main aims of this document are to identify the recent patterns associated to these youth initiatives in the region and to identify lessons that can be learnt from them. In order to achieve these purposes, it updates and systematizes 65 initiatives that have been implemented in 18 Latin American countries from 2008 up to date, and reviews the findings of 12 initiatives with impact evaluations that have been published during this period. Despite the active labour market programmes have appeared as the more recurrent response in the set of initiatives to handle the youth employment problems, labour market regulations have been more frequent to address labour demand barriers for youth recently. Supply-oriented initiatives account for the highest share of interventions, and most countries have developed initiatives to fostering youth entrepreneurship. The programmes in place in many countries are the result of combining earlier with newer initiatives. Although rigorous evidence is still scarce, some learning potential lies on the common features between the impact evaluations that took place during 2008-13 in the region and the worldwide reviews. The programmes effectiveness on labour market outcomes seem to be more correlated to targeting and how the intervention is delivered than to the type of intervention. Comprehensive initiatives that combine different interventions also work better than programmes that rely on a single component. However, the main lesson learned in international experience is that interventions effects depend mostly on country-specific variables and therefore further research efforts are needed in assessing the interventions in their own specific country contexts.)
    Date: 2014–03
  10. By: Camilo González; Luisa F. Silva; Carmiña O. Vargas; Andrés M. Velasco
    Abstract: We set a dynamic stochastic model for the interbank daily market for funds in Colombia. The framework features exogenous reserve requirements and requirement period, competitive trading among heterogeneous commercial banks, daily open market operations held by the Central Bank (auctions and window facilities), and idiosyncratic demand shocks and uncertainty in the daily auction. The model highlights the institutional framework and the money supply mechanisms for the interbank market. We construct a data base for the Colombian case that incorporates the principal variables of the model and give us some insights about the behavior of them in a typical requirement period. We corroborate the Martingale hypothesis for the interbank interest rate.
    Keywords: Interbank Market; Overnight Rates; Reserve Demand.
    JEL: E44 E52 G21
    Date: 2013–09–18
  11. By: Ana Luiza Neves de Holanda Barbosa; Carlos Henrique L. Corseuil
    Abstract: O objetivo deste texto é investigar o impacto do Programa Bolsa Família (PBF) na composição do mercado de trabalho no Brasil. Em particular, analisar em que medida essa transferência de renda distorce a escolha ocupacional dos beneficiários no sentido de torná-los mais propensos a optar por uma ocupação informal. Para tanto, utilizou-se o arcabouço de regressão descontínua (fuzzy RDD), ao explorar-se uma descontinuidade presente na regra de elegibilidade do programa, que vem a ser um limite para a idade das crianças. A análise é feita com base nos microdados da Pesquisa Nacional por Amostra de Domicílios (PNAD) de 2006, do Instituto Brasileiro de Geografia e Estatística (IBGE). Os resultados encontrados sugerem que o programa não tem impactos sobre a escolha ocupacional dos beneficiários entre os postos formais e informais. This study analyzes the impact of conditional cash transfer program Bolsa Familia in the occupational composition Brazilian labor market. The methodology relies on a discontinuity in the program elegibility rule regarding children’s age to attain the identification of a LATE parameter. The analysis is carried out with 2006 microdata from National Household Sample Survey (PNAD/IBGE). Our results suggest the cash transfer program does not affect the occupational choice of Brazilian adults among formal and informal jobs.
    Date: 2014–04
  12. By: Paulo Roberto Corbucci
    Abstract: Este texto se propõe a analisar a evolução do acesso à educação superior na coorte de 18 a 24 anos, a qual é considerada adequada à frequência a este nível de ensino. Inicialmente, questiona-se a utilização desta faixa etária como referência para se mensurar o grau de acesso a este nível de ensino no Brasil. Em seguida, são analisados alguns fatores que estabelecem estreita relação com as taxas de frequência à educação superior. No intuito de comparar a situação do Brasil no contexto internacional, é realizada breve comparação com a evolução do acesso à educação superior no México. Por fim, são apresentadas algumas conclusões acerca das variáveis associadas às desigualdades de acesso retratadas ao longo do texto, assim como é apontado um dos principais limitantes para o alcance da meta de taxa de frequência líquida de 33% que consta no projeto de lei do Plano Nacional de Educação, em tramitação no Congresso Nacional. This study aims to analyze the evolution of access to higher education in the cohort 18- 24 years, which is considered the most adequate for this level of education. Initially, we question the use of this age group as a reference to measure the degree of access to this level of education in Brazil. Then, we analyze some factors that establish close relationship with attendance rates to higher education. In order to compare the situation of Brazil in the international context, a brief comparison is made with the evolution of access to higher education in Mexico. Finally, we present some conclusions about the variables associated with inequalities in access portrayed throughout the text, as well as pointing to one of the main limiting factors for the achievement of the target of net attendance rate of 33% set out in the bill of the National Plan of Education that is under discussion in National Congress.
    Date: 2014–04

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.