nep-lam New Economics Papers
on Central and South America
Issue of 2014‒12‒08
eight papers chosen by

  1. The Road to Redemption: Policy Response to Crises in Latin America By Carlos A. Vegh; Guillermo Vuletin
  2. Macroeconomic policy in Brazil: inflation targeting, public debt structure and credit policies By Fernando López Vicente; José María Serena Garralda
  3. Employment policy implementation mechanisms in Brazil By Dedecca, Claudio Salvadori
  4. Latin American Agriculture in a World of Trade Agreements By Josling, Tim; Paggi, Mechel; Wainio, John; Yamazaki, Fumiko
  5. Health Status and Labor Force Participation: Evidence for Urban Low and Middle Income Individuals in Colombia By Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
  6. The doctrines and the making of an early patent system in the developing world: the Chilean case. 1840s-1910s By Bernardita Escobar
  7. Does the absence of demand side variability in stochastic partial equilibrium modeling bias outcomes? Facts and evidence from Brazil By Debnath, Deepayan; Thompson, Wyatt; Westhoff, Patrick; Gerlt, Scott
  8. The Political-Economy of Biofuel and Cheap Oil Policies in Brazil By Khanna, Madhu; Hector, Nunez; David, Zilberman

  1. By: Carlos A. Vegh; Guillermo Vuletin
    Abstract: This paper analyzes the fiscal and monetary policy responses to crises in Latin America over the last 40 years. We argue that, on average, Latin American countries have "graduated" in terms of their policy responses in the sense that they have been able to switch from procyclical to counteryclical policy responses. This average response, however, masks a great deal of heterogeneity with some countries (such as Chile, Brazil, and Mexico) leading the graduation process and others (like Argentina and Venezuela) still showing procyclical policy responses. We further show that countercyclical policy responses have been effective in reducing the duration and intensity of crises. Finally, we relate our analysis to the current crisis in the Eurozone and argue that, like in many instances in Latin America, procyclical fiscal policy has increased the duration and intensity of the crisis.
    JEL: E52 E62 F41
    Date: 2014–11
  2. By: Fernando López Vicente (Banco de España); José María Serena Garralda (Banco de España)
    Abstract: Macroeconomic policy in Latin America underwent significant changes in the late nineties. Brazil is an outstanding example: inflation targeting was introduced in 1999 and a new fiscal policy framework was set up in 2000 with the Fiscal Responsibility Law. However, two elements of the Brazilian economy constrained the apparently state-of-the-art macroeconomic policy framework: the composition of public debt and the structure of the banking system. This paper discusses why macroeconomic policies were restricted by those factors and how they have evolved differently. The structure of public debt, characterised by indexation, short-term maturities and short US dollar positions, imposed significant constraints on macroeconomic policies during the 2000s. Nevertheless, these vulnerabilities were gradually overcome and the composition of public debt has remained stable in the aftermath of the global financial crisis. At the same time, the structure of the banking system was characterised by credit segmentation and high interest spreads, and these characteristics are still present today. These features have become key elements in understanding current macroeconomic developments, credit dynamics and the economic policy stance.
    Keywords: public debt, central banking, credit policies, Brazil.
    JEL: H30 E58 E63
    Date: 2014–10
  3. By: Dedecca, Claudio Salvadori
    Abstract: The paper discusses the NEPs implementation mechanism in Brazil.
    Keywords: employment policy, promotion of employment, labour market, evaluation, Brazil, politique de l'emploi, promotion de l'emploi, marché du travail, évaluation, Brésil, política de empleo, fomento del empleo, mercado de trabajo, evaluación, Brasil
    Date: 2014
  4. By: Josling, Tim; Paggi, Mechel; Wainio, John; Yamazaki, Fumiko
    Abstract: Latin American and Caribbean (LAC) countries have been among the most active participants in the negotiation of regional and bilateral FTAs. The countries of the region are members of 73 of the 259 FTAs notified to the WTO as currently in force, with 29 of these agreements containing tariff concessions made to one or more Latin American partners: the remaining 44 are between an LAC member country and a third country. Among LAC countries already linked by an FTA, a large percentage of agricultural tariffs are already duty free. But the progress in this direction seems to have stalled, with continued tensions in MERCOSUR and political difficulties in the Andean Community. Negotiation of the proposed Free Trade Areas of the Americas (FTAA) has been shelved, and the MERCOSUR-EU negotiations are moving at an imperceptible speed. Meanwhile other countries are moving ahead rapidly by negotiating ambitious mega-agreements, particularly the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (T-TIP). The only LAC countries actively involved in the TPP talks are Mexico, Chile, and Peru. If either or both of these mega-agreements are concluded the impacts on the region could be significant. These impacts include trade diversion and preference erosion in major import markets, as competitors improve their market access. They could also involve the 3 de facto acceptance of regulatory decisions made by the mega-agreement partners. The Latin American strategies toward these potentially significant agreements and the impacts of the TPP and T-TIP on Latin American agriculture have so far gone largely unstudied. Several possible avenues exist for Latin American countries to counter the impact of a TPP and TTIP on agricultural exports. One possible avenue would be to strengthen existing bilateral trade agreements within the region and to rely on multilateral trade negotiations to improve market access in other regions. Another possible strategy would be to link existing multi-country agreements, such as MERCOSUR and the Pacific Alliance, to NAFTA, in effect reviving the idea for a Free Trade Area of the Americas (FTAA) under a different structure. Another possibility would be to complete and expand the scope of the MERCOSUR-EU FTA talks, to include other LAC countries. A fourth possible action would be for those countries that are not yet part of the negotiations to “sign on” to the TPP in so far as it is an “open access” agreement.
    Keywords: International Relations/Trade, Political Economy,
    Date: 2014–07
  5. By: Ana María Iregui-Bohórquez; Ligia Alba Melo-Becerra; María Teresa Ramírez-Giraldo
    Abstract: This paper uses the first wave of the Colombian Longitudinal Survey (ELCA) to analyze the relationship between individual health status and labor force participation. The empirical modeling strategy accounts for the presence of potential endogeneity between these two variables. The results show that there is a positive relationship between health and labor force participation in both directions, indicating that better health is likely to lead to a higher probability of participation in the labor market, and also that those who are in the labor market are more likely to report better health. Moreover, interesting differences arise when the database is further divided by gender and/or age groups. Our findings highlight the importance of public policy to guarantee good health conditions of the population which could also have a positive impact on labor productivity and consequently on long-run economic growth. Classification JEL: C35, C36, I10, J21
    Date: 2014–11
  6. By: Bernardita Escobar (Facultad de Economía y Empresa, Universidad Diego Portales)
    Abstract: This article analyses the creation of the first Chilean patent law (1840s-1920s), by examining the underlying doctrines and key actors (political and business people) in the making of one of the earliest patent systems in Latin America and the developing world. From three main doctrines supporting IP protection (natural rights, contractarian and utilitarian) the article identifies elements of the first, disregard for the second and some traits of the third doctrine in the law. Protection of „introductions‟, a non-contemporary IP subject matter, resulted from the mix of utilitarian and protectionist beliefs of policy makers, the influence of colonial regulation and a series of petitions for privileges made between 1830-40.
    Date: 2014–09
  7. By: Debnath, Deepayan; Thompson, Wyatt; Westhoff, Patrick; Gerlt, Scott
    Abstract: 2014 AAEA annual meeting poster presentation
    Keywords: stochastic partial equilibrium modeling, crop receipts, Brazil, Agribusiness, Research Methods/ Statistical Methods, Risk and Uncertainty, C63, Q10,
    Date: 2014–07–27
  8. By: Khanna, Madhu; Hector, Nunez; David, Zilberman
    Abstract: Brazil has pursued a mix of policy interventions in the fuel sector to achieve multiple objectives of economic and social development, promoting biofuels and reducing dependence on oil. We develop a welfare economic framework to analyze the rationale the fuel policy choices in Brazil and to analyze the trade-offs they have engendered in the fuel and sugar sectors. We also examine their distributional impacts on producers and consumers in the sugar, oil and biofuel sectors and on government revenues. Additionally, we undertake a normative analysis for the purpose of comparing the welfare and environmental impacts of existing policies with those justified by the goal of maximizing social welfare and addressing market failure. The ex-post analysis of the outcomes for different stakeholders in the fuel and sugar sectors provides insights on the likely political-economic factors guiding policy choices. We find that the status quo policies are likely to have been motivated by the objectives of exporting oil, raising government revenue and promoting rural development through the sugarcane sector and have had a significant adverse effect on fuel and sugar consumers and aggregate social welfare in Brazil.
    Keywords: Political Economy,
    Date: 2014

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