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on Central and South America |
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Issue of 2016‒11‒20
three papers chosen by |
| By: | Stephen McKnight (Centro de Estudios Económicos, El Colegio de México); Alexander Mihailov (Department of Economics, University of Reading); Antonio Pompa Rangel (antonio.pompa@banxico.org.mx) |
| Abstract: | This paper uses Bayesian estimation techniques to uncover the central bank preferences of the big five Latin American inflation targeting countries: Brazil, Chile, Colombia, Mexico, and Peru. The target weights of each central bank's loss function are estimated using a medium-scale small open economy New Keynesian model with incomplete international asset markets and imperfect exchange-rate pass-through. Our results suggest that all central banks in the region place a high priority on stabilizing inflation and interest rate smoothing. While stabilizing the real exchange rate is a concern for all countries except Brazil, only Mexico is found to assign considerable weight to reducing real exchange rate fluctuations. Overall, Brazil, Colombia, and Peru show evidence of implementing a strict inflation targeting policy, whereas Chile and Mexico follow a more flexible policy by placing a sizeable weight to output gap stabilization. Finally, the posterior distributions for the central bank preference parameters are found to be strikingly different under complete asset markets. This highlights the sensitivity of Bayesian estimation, particularly when uncovering central bank preferences, to alternative international asset market structures. |
| Keywords: | Bayesian estimation, central bank preferences, inflation targeting, Latin America, small open economies, incomplete asset markets, monetary policy |
| JEL: | C51 E52 F41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2016-12&r=lam |
| By: | Günther Fink (Department of Global Health and Population, Harvard T.H. School of Public Health); Evan Peet (RAND Corporation) |
| Abstract: | While a large literature has investigated the returns to education in high-income countries, evidence on returns in less developed countries is relatively scarce. We pool 61 nationally representative household surveys conducted between 1985 and 2012 in order to address this evidence gap and to estimate average national and regional returns to education. We find a return of 6.5% in the pooled data, with lower returns in rural areas, higher returns for females, higher returns in the years prior to 2000, and lower rates of return in Asian countries compared to Africa, Latin America, and Eastern Europe. With respect to schooling levels, we find lowest returns for primary education, and highest returns to tertiary education, consistent with recent evidence from developed countries. Overall, returns to education in developing countries seem to be similar or lower than those in high-income countries with remarkably large amounts of heterogeneity across countries, time, and regions.While a large literature has investigated the returns to education in high-income countries, evidence on returns in less developed countries is relatively scarce. We pool 61 nationally representative household surveys conducted between 1985 and 2012 in order to address this evidence gap and to estimate average national and regional returns to education. We find a return of 6.5% in the pooled data, with lower returns in rural areas, higher returns for females, higher returns in the years prior to 2000, and lower rates of return in Asian countries compared to Africa, Latin America, and Eastern Europe. With respect to schooling levels, we find lowest returns for primary education, and highest returns to tertiary education, consistent with recent evidence from developed countries. Overall, returns to education in developing countries seem to be similar or lower than those in high-income countries with remarkably large amounts of heterogeneity across countries, time, and regions. JEL Codes: |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:gdm:wpaper:12014&r=lam |
| By: | Zuniga, Pluvia (UNU-MERIT, and OECD) |
| Abstract: | Despite an exceptional economic performance achieved over the last decade, Peru still lags behind other middle-income Latin American economies in terms of per capita income and productivity. The Peruvian economy remains relatively undiversified, largely dependent on natural resources. The nationalinnovation system is under development, weakly integrated, and underfunded, with few incentives for its actors to engage in innovation activities and collaborate with others. This note summarises the current state of innovation in Peru and reviews the capacity of the innovation system to generate new competitive advantages in industry. It briefly discusses policies and policy gaps in research and innovation and benchmarks national innovation competences to other relevant economies, based on available indicators and surveys. Following a sequential approach, a strengthened policy agenda for innovation should tackle fundamental weaknesses of the innovation system and set the basis for its expansion and a better articulation. Examples of policy actions to improve research performance and business innovation are provided. The paper concludes with suggestions for reforming the innovation system and provides examples of policy actions. |
| Keywords: | innovation system, development, Peru, emerging countries, innovation policy |
| JEL: | O14 L52 L60 L26 O32 O57 |
| Date: | 2016–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016058&r=lam |