nep-lam New Economics Papers
on Central and South America
Issue of 2014‒05‒17
thirteen papers chosen by
Maximo Rossi
University of the Republic

  1. Firm dollar debt and central bank dollar reserves: Empirical evidence from Latin America By Rajeswari Sengupta
  2. Wealth gradients in early childhood cognitive development in five Latin American countries By Norbert Schady; Jere Behrman; Maria Caridad Araujo; Raquel Bernal
  3. Elasticities of Residential Electricity Demand in Chile By Claudio A Agostini; Eduardo Saavedra
  4. Can the context mediate macro-policy outcomes? Contextual differences in the returns to Bolsa Familia in Brazil By von Jacobi, Nadia
  5. La Educación Superior en Colombia: Situación Actual y Análisis de Eficiencia By Ligia Alba Melo B.; Jorge Enrique Ramos F.; Pedro Oswaldo Hernández S.
  6. Stock return comovements and integration within the Latin American integrated market By Carlos Castro; Nini Johana Marin
  7. Brasil como horizonte: mayor ingreso y mayor crecimiento económico para Colombia By Ortíz Quevedo, Carlos Humberto; Salazar Juan David
  8. Uncertainty in the Money supply mechanism and interbank markets in Colombia By Camilo González; Luisa Silva; Carmiña Vargas; Andrés M. Velasco
  9. Job Vacancies in Colombia: 1976-2012 By Andrés Álvarez; Marc Hofstetter
  10. Desempleo: definiciones y algunas estadísticas para las trece principales áreas metropolitanas de Colombia (segundos trimestres de 2010, 2011 y 2012) By Jimenez Restrepo, Diana Marcela
  11. Banking Fragility in Colombia: An Empirical Analysis Based on Balance Sheets By Ignacio Lozano; Alexander Guarín
  12. Inflation Targeting in Colombia, 2002-2012 By Franz Hamann; Marc Hofstetter; Miguel Urrutia
  13. Equality of educational opportunities in Colombia: A metropolitan area comparison By Luis Fernando Gamboa; Erika Londoño

  1. By: Rajeswari Sengupta (Indira Gandhi Institute of Development Research; Institute of Economic Growth)
    Abstract: I explore an empirically robust but previously undocumented association between the foreign exchange reserves accumulated by central banks of emerging market economies and dollar-denominated debt held in the balance sheets of non financial sector firms. Borrowing in dollars can have damaging effects on corporate balance sheets in the event of exchange rate depreciation. However, firms may discount such risk because of the implicit insurance provided by the central banks ex-ante reserve accumulation: in the event of a currency depreciation, firms may expect the central bank to stabilize the exchange rate using its stock of reserves. Using a novel firm-level balance sheet database, I investigate this possibility for close to 1500 firms in six of the largest Latin American economies, Argentina, Brazil, Chile, Colombia, Mexico and Peru. Results suggest that over the sample period, 1995-2007, an increase in the level of reserves is statistically and economically associated with an increase in the dollar borrowing of non financial sector firms of these economies. This could hint at a possible paradox: a higher level of reserves need not necessarily signify an economy that is more resilient to shocks. While reserve accumulation enables governments to weather macroeconomic risks arising from sudden stops in international capital flows, it can also increase the vulnerability of the corporate sector to currency risks by distorting incentives. Thus central banks, while formulating their foreign exchange intervention policies, may need to take into consideration the impact of the resultant reserve stockpiling on the private sector.
    Keywords: Foreign exchange reserves, foreign currency denominated debt, exchange rate regimes, currency crisis
    JEL: F3 F4
    Date: 2014–04
  2. By: Norbert Schady; Jere Behrman; Maria Caridad Araujo; Raquel Bernal
    Abstract: Abstract Research from the United States shows that gaps in early cognitive and non-cognitive ability appear early in the life cycle. Little is known about this important question for developing countries. This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, we use the same measure of receptive language ability for all five countries. We find important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where we can follow children over time, there are few substantive changes in scores once children enter school. Our results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on our measure of cognitive development
    Keywords: early childhood, socioeconomic gaps, Latin-American
    JEL: J13 I38
    Date: 2014–04–24
  3. By: Claudio A Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez); Eduardo Saavedra
    Date: 2014–03
  4. By: von Jacobi, Nadia
    Abstract: Local institutional and structural (meso) factors can play a role in mediating the returns to a macro-social policy. I focus on the Brazilian cash-transfer-programme Bolsa Familia and check how contextual features influence the returns to transfers. Build
    Keywords: conditional cash transfer, meso, institutions, Amartya Sen, conversion factors, Brazil
    Date: 2014
  5. By: Ligia Alba Melo B.; Jorge Enrique Ramos F.; Pedro Oswaldo Hernández S.
    Abstract: La investigación tiene como objetivo revisar de manera general la situación de la educación superior en Colombia y evaluar los niveles de eficiencia de los diferentes programas e instituciones del país. Para el análisis de eficiencia se utilizan técnicas de frontera estocástica y los resultados de las pruebas Saber Pro. La estimación evalúa el impacto tanto de variables asociadas al personal docente y a la infraestructura de las instituciones, como de algunos factores de entorno que no están directamente bajo el control de las instituciones. Los resultados indican que existe una respuesta positiva y significativa entre el logro académico y las variables de infraestructura y las asociadas al personal docente. Los resultados igualmente resaltan la importancia de los factores de entorno para explicar el desempeño de las instituciones de educación superior, sugiriendo que aunque muchas instituciones educativas tienen un margen para mejorar sus niveles de eficiencia, podrían estar restringidas por la influencia de los factores socioeconómicos de los estudiantes.
    Keywords: Educación Superior, Análisis de eficiencia, Frontera estocástica.
    JEL: I21 I23 D24
    Date: 2014–02–05
  6. By: Carlos Castro; Nini Johana Marin
    Abstract: Abstract: Financial integration has been pursued aggressively across the globe in the last fifty years; however, there is no conclusive evidence on the diversification gains (or losses) of such efforts. These gains (or losses) are related to the degree of comovements and synchronization among increasingly integrated global markets. We quantify the degree of comovements within the integrated Latin American market (MILA). We use dynamic correlation models to quantify comovements across securities as well as a direct integration measure. Our results show an increase in comovements when we look at the country indexes, however, the increase in the trend of correlation is previous to the institutional efforts to establish an integrated market in the region. On the other hand, when we look at sector indexes and an integration measure, we find a decreased in comovements among a representative sample of securities form the integrated market.
    Keywords: Comovements, correlation, market integration
    Date: 2014–04–01
  7. By: Ortíz Quevedo, Carlos Humberto; Salazar Juan David
    Abstract: La comparación de la estructura productiva de Colombia con la de Brasil, la economía más desarrollada de Latinoamérica, revela los posibles desarrollos sectoriales de Colombia que tendrían mayor impacto sobre la integración económica intersectorial y, por consiguiente, la generación de ingreso y la tasa de crecimiento económico de largo plazo
    Keywords: Impacto económico; Crecimiento económico; Productividad; Brasil; Colombia
    JEL: D57 L16 O11 P52
    Date: 2014–02–08
  8. By: Camilo González; Luisa Silva; Carmiña Vargas; Andrés M. Velasco
    Abstract: We set a dynamic stochastic model for the interbank daily market forfunds in Colombia. The framework features exogenous reserve requirements and requirement period, competitive trading among heterogeneouscommercial banks, daily open market operations held by the Central Bank(auctions and window facilities), and idiosyncratic demand shocks anduncertainty in the daily auction. Analytical derivations of their decisionmaking process show that banks involvement in the interbank market andopen market operations depend on their individualrequirement constraintand daily liquid assets. Our results do not show a linkage between theuncertainty in the money supply mechanism and activity in the interbankmarket. Equilibrium interest rate for the interbank market is derived,and is shown that it is distorted by uncertainty at the daily auction heldby the monetary authority. Using data for Colombia, we test the mainresults of the model and corroborate the Martingale hypothesis for theinterbank interest rate.
    Keywords: Interbank Market; Overnight Rates; Reserve Demand
    JEL: E44 E52 G21
    Date: 2013–11–15
  9. By: Andrés Álvarez; Marc Hofstetter
    Abstract: Based on the counting of Help-wanted advertisements in print newspapers, we present national vacancy indexes and vacancy rates for Colombia. These series will allow tackling a myriad of questions related to the functioning of the labor markets in emerging economies, where such datasets were not available until now.
    Keywords: Vacancies, Help-wanted index, unemployment, Beveridge curve, labor market, Colombia
    JEL: E24 E32 J63 J64
    Date: 2013–12–13
  10. By: Jimenez Restrepo, Diana Marcela
    Abstract: El desempleo es un problema que nos preocupa a todos. Por el lado de la oferta agregada, alarma a quienes se ven impedidos en alcanzar los niveles de producción que desearían, mientras por el lado de la emanda agregada, inquieta a quienes no cuentan con los recursos para consumir los bienes de una canasta básica o de sobrevivencia. En tal sentido, tipificar el desempleo es importante porque permite identificar los segmentos de la población vulnerables a la desocupación y hacia quienes deben dirigirse las políticas o programas de fomento al empleo. Con información de la Gran Encuesta Integradas de Hogares para los segundos trimestres del 2010, 2011, 2012 y para las trece principales áreas metropolitanas de Colombia, se reafirma que mujeres y jóvenes entre los 25 años de edad, son los que tiene mayor representatividad en el desempleo.
    Keywords: Desempleo; Áreas metropolitanas; Colombia
    JEL: J0 J64
    Date: 2013–07–16
  11. By: Ignacio Lozano; Alexander Guarín
    Abstract: In this paper, we study the empirical relationship between credit funding sources and the financial vulnerability of the Colombian banking system. We propose a statistical model to measure and predict banking-fragility episodes associated with credit funding sources classified into retail deposits and wholesale funds. We compute the probability of financial fragility for both the aggregated banking system and the individual banks. Our approach performs a Bayesian averaging of estimated logit regression models with monthly balance sheet data between 1996 and 2013. The results show the increasing use of wholesale funding to support credit expansion is a potential source of financial fragility. Therefore, monitoring credit funding sources could provide an additional tool to warn against banking disruptions.
    Keywords: Credit cycle, financial stability, wholesale funds, balance sheet, logistic model regression, Bayesian model averaging.
    JEL: C11 C23 C52 C53 G01 G20 G21
    Date: 2014–03–12
  12. By: Franz Hamann; Marc Hofstetter; Miguel Urrutia
    Abstract: Abstract After decades using monetary aggregates as the main instrument of monetary policy and having different varieties of crawling peg exchange rate regimes, Colombia adopted a full-fledged inflation-targeting (IT) regime in 1999, with inflation as the nominal anchor, a floating exchange rate, and the short-term interest rate as the main instrument. We examine the experience of the Colombian Central Bank over the last decade, a period of consolidation and innovation of its IT strategy. We study the increasing number of instruments used by the CB, including systematic foreign exchange interventions, announcements, and, sporadically, macro-prudential policies, capital controls, and changes in reserve requirements, among others. The study also examines some political economy dimensions that help explain the behavior of the CB during this period. To guide the discussion, we estimate a small-scale open-economy-policy-model.
    Keywords: Inflation Targeting, Monetary Policy, Exchange Rate, Taylor Rule, Colombia.
    JEL: E02 E32 E42 E43 E52 E58 E61 F31 F33 F42
    Date: 2014–03–04
  13. By: Luis Fernando Gamboa; Erika Londoño
    Abstract: Abstract: This  document  aims  to  provide  evidence  about  the  existence  of  different patterns in equality of opportunities in academic achievement during the last  fifteen years in Colombia. The outcomes selected for measuring inequality are the scores obtained on SABER 11 in math as well as reading. It is found that  inequality has grown around 11% in the country, and that this trend is common for all the metropolitan areas included in the analysis. Most of the increase  found comes from factors related to the school market. The fraction of unfair inequality,  conditional  to  the  circumstances  included  in  the  definition  of  “types”, is higher than 20% of gross ine quality in 2012.
    Keywords: Inequality of Opportunities,  Education,  Colombia
    JEL: I24 O15 O54
    Date: 2014–03–03

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