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on Central and South America |
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Issue of 2014‒07‒13
ten papers chosen by |
| By: | Alexander Klemm |
| Abstract: | This paper provides an analysis of the cyclical stance of fiscal policy in Latin America. Its contributions include developing a new measure of the cyclicality of fiscal policy, careful analysis of the statistical significance of results, and accounting for the effect of commodity prices on fiscal balances. The new cyclicality measure takes into account both discretionary policy action and automatic stabilizers, but excludes additional revenues that are due to applying an unchanged average tax rate to nominal GDP in excess of potential. The paper finds that fiscal policy has been procyclical on average in Latin America, but counter or acyclical in advanced economies. Country-specific results are mostly insignificant, except in a few cases where policy is clearly procyclical. For some countries (Brazil, Chile, Colombia, El Salvador, and Mexico), there is evidence of a recent move toward more countercyclical policies. |
| Keywords: | Fiscal policy;Latin America;Business cycles;Cross country analysis;Fiscal policy, business cycle, Latin America. |
| Date: | 2014–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/59&r=lam |
| By: | Cerutti, Paula; Fruttero, Anna; Grosh, Margaret; Kostenbaum, Silvana; Oliveri, Maria Laura; Rodriguez-Alas, Claudia; Strokova, Victoria |
| Abstract: | How much do countries spend on social protection? Do social protection programs cover all poor people? And, how well are they targeted? It is notoriously hard to find comprehensive cross-country data on social protection programs which can help answer such questions and allow to benchmark social protection systems. The World Bank’s Latin American and Caribbean (LAC) Social Protection Database attempts to fill these knowledge gaps by collecting and systematizing data on social protection programs from both administrative sources and household surveys. The data assembled provides a powerful tool to study trends and analyze program performance as well as benchmark countries’ social protection systems. We found both expected and unexpected trends in spending on social protection and coverage of social protection programs across countries. Between 2000 and 2010 expenditureon social assistance nearly tripled. At a program level, conditional cash transfer programs ceased to dominate social assistance spending, with the exception of Mexico, and have come second to social pension spending in Brazil, Uruguay and Chile. Labor market programs remain small and fragmented, but show much more counter-cyclical patterns. |
| Keywords: | Poverty Impact Evaluation,Labor Markets,Insurance Law,Insurance&Risk Mitigation,Rural Poverty Reduction |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:88769&r=lam |
| By: | Shaun K. Roache |
| Abstract: | Inflation persistence is sometimes defined as the tendency for price shocks to push the inflation rate away from its steady state—including an inflation target—for a prolonged period. Persistence is important because it affects the output costs of lowering inflation back to the target, often described as the “sacrifice ratioâ€. In this paper I use inflation expectations to provide a comparison of inflation persistence in Brazil with a sample of inflation targeting (IT) countries. This approach suggests that inflation persistence increased in Brazil through early 2013, in contrast to many of its IT peers, mainly due to “upward†persistence. The 2013 rate hiking cycle may have contributed to some recent decline in persistence. |
| Keywords: | Inflation;Brazil;Inflation targeting;Monetary policy;Cross country analysis;Economic models; |
| Date: | 2014–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/55&r=lam |
| By: | Gindling, T. H. (University of Maryland, Baltimore County); Mossaad, Nadwa (University of Maryland, Baltimore County); Trejos, Juan Diego (University of Costa Rica) |
| Abstract: | In August 2010 the Costa Rican government implemented a comprehensive program to increase compliance with legal minimum wages, the Campaign for Minimum Wages. To evaluate the impact of the Campaign, we use a regression discontinuity approach, which compares what happened to workers who before the campaign had been earning below the minimum wage to those who before the Campaign had been earning above the minimum wage. We analyze a panel data set with information on workers from before the Campaign began (July 2010) and after the Campaign had been in operation for some time (July 2011). We find evidence that the Campaign led to an increase in compliance with minimum wage laws in Costa Rica; the mean earnings of those earning less than the minimum wage in 2010 increased by approximately 10% more than the earnings of those who had been earning more than the minimum wage. The Campaign led to the largest increases in the wages of women, younger workers and less-educated workers. We find no evidence that the Campaign had a negative impact on the employment of full-time workers whose wages were increased. We find some weak evidence that the Campaign had a negative impact on the employment of part-time private sector employees. Although increased inspections were mainly targeting minimum wage violations, we also observe an increase in compliance with a broader set of labor standards and a positive spillover effect relative to other violations of labor laws. |
| Keywords: | Latin America, labor code enforcement, minimum wages, employment, wages |
| JEL: | J3 J33 J38 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8253&r=lam |
| By: | Roberto Perrelli; Shaun K. Roache |
| Abstract: | Emerging markets have experienced a sizeable decline in their neutral real interest rates until recently. In this paper we try to identify the main factors that contributed to it, with a focus on Brazil. We estimate an interval for Brazil’s time-varying neutral rate based on a range of structural and econometric models. We assess the implications of incorrectly estimating a time-varying neutral rate using a small structural model with a simple monetary policy instrument rule. We find that policy prescriptions are very different when facing uncertainty of neutral rate and of output gap. Our result contrasts sharply with Orphanides (2002), suggesting that the best response to neutral rate uncertainty is to ensure policy remains highly sensitive to inflation and output variations. |
| Keywords: | Interest rates;Brazil;Inflation targeting;Monetary policy;Economic models;Natural rate of interest; small monetary model; inflation targeting regime. |
| Date: | 2014–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/84&r=lam |
| By: | Raphael Bruce; Rudi Rocha |
| Abstract: | This paper examines one of the possible channels through which incumbent elites aligned with the Brazilian dictatorship were able to withhold their political power during the democratization in the 1980s. Based on national household survey data and results from legislative elections, we first find that recently franchised illiterate voters who lived in states that were dominated by the elite party during the dictatorship had a higher probability to register to vote than those who lived in other states.We then investigate whether this positive correlation represents a reaction from the incumbent elites in order to keep their political power through voter manipulation or a reaction from these voters in order to remove the power from the oligarchies. We find that, in states dominated by the elite party, illiterates had higher probability of being politically uninterested and uninformed. Our results suggest that a politically motivated reaction from this population is implausible. |
| Keywords: | Democratization; Elites; Rural Oligarchy |
| JEL: | D72 D78 I25 |
| Date: | 2014–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2014wpecon9&r=lam |
| By: | João Pedro Azevedo; Antonio David; Fabiano Rodrigues Bastos; Emilio Pineda |
| Abstract: | We combine state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, we find that a tighter stance is typically positively associated with a measure of “shared prosperityâ€. Hence, our results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings. |
| Keywords: | Income distribution;Brazil;Fiscal policy;Economic models;Time series;Fiscal Adjustment, Fiscal Policy, Income Inequality, Brazil |
| Date: | 2014–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/85&r=lam |
| By: | Estrada, Fernando; Patiño, Gonzalo; Pulido, Antonio |
| Abstract: | The urgent need for higher levels of productivity and competitiveness to meet the demands of the domestic and international market, poses serious challenges to productive and educational systems of the department of Santander, Colombia. It follows from the results obtained in the two sectors; so, the economic profile of the department shows that the first half of the nineties was marked by an increase of the order of 4.2% of GDP, which however was a reflection of the economic activity that took traditional economic sectors (leather, clothing, metallurgical, food timber, graphics); ie, there was the expected technical and technological change as a result of the opening of the country in advance, to enable the business sector santanderano properly inserted domestic and international capital markets. This trend continued during the second half of the decade, and only during the last three years (2000-2003), began to show results (stabilization of the financial system, decrease the deficit of the public sector and a more competitive exchange rate) , which raised hopes of entrepreneurs and regional institutions, although the pace of overall economic growth decreased at an average annual rate of around 2.3%. |
| Keywords: | Colombia, Economy, Development economic, Quality of life, Amartya Sen, PNUD, Santander |
| JEL: | A1 E2 E24 H4 H41 H75 O1 O24 R3 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57137&r=lam |
| By: | Luis Bértola (Programa de Historia Económica y Social, Facultad de Ciencias Sociales, Universidad de la República); Fernando Isabella (Instituto de Economía, Facultad de Ciencias Económicas y Administración, Universidad de la República); Carola Saavedra (Cámara de Industria del Uruguay) |
| Abstract: | The paper studies the main features of the economic cycle 1998-2012 in Uruguay. It states that, in spite of very positive and promising results, there still persists a set of structural problems that inhibits us to conclude that Uruguay had broken with the long-run trends of low economic dynamics. The paper also studies changes in the productive structure and the structure of exports, concluding that no significant structural changes took place., which is in line with the idea of the persistence of historical structural features. Finally, the papers tackles the applied productive policies and its relation with the discussed results, concluding that significant progress was made in the policy development and capability building, but that there still exist important weaknesses necessary to be over won in order to improve the prospects for development. |
| Keywords: | Crecimiento, cambio estructural, políticas productivas, exportaciones, déficit de cuenta corriente |
| JEL: | E32 F14 H32 N16 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ude:doctra:33&r=lam |
| By: | Azevedo, Joao Pedro; David, Antonio C.; Bastos, Fabiano Rodrigues; Pineda, Emilio |
| Abstract: | The paper combines state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, the authors find that a tighter stance is typically positively associated with a measure of"shared prosperity". Hence, the results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings. |
| Keywords: | Subnational Economic Development,Debt Markets,Inequality,Economic Theory&Research,Poverty Impact Evaluation |
| Date: | 2014–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6945&r=lam |