nep-lam New Economics Papers
on Central and South America
Issue of 2017‒10‒08
seven papers chosen by
Maximo Rossi
Universidad de la República

  1. Varieties of Conditional Cash Transfers in Latin America By Yuriko Takahashi
  2. Empirical Findings on Inflation Expectations in Brazil: a survey By Wagner Piazza Gaglianone
  3. Wealth Disparities for Early Childhood Anthropometrics and Skills: Evidence from Chilean Longitudinal Data By Jere Behrman; Dante Contreras; Isidora Palma; Esteban Puentes
  4. Competition, Selection, and Productivity Growth in the Chilean Manufacturing Industry By Roberto Álvarez; Aldo González
  5. The relationship between healthcare expenditure and income in Latin-American countries: A panel time By Elisabet Rodriguez Llorian; Janelle Mann
  6. Does inequality foster or hinder the growth of entrepreneurship in the long-run? By Roxana Gutiérrez; Luciana Méndez
  7. Institutional shocks and economic outcomes : Allende's election, Pinochet's coup and the Santiago stock market By Daniele Girardi; Samuel Bowles

  1. By: Yuriko Takahashi (Faculty of Political Science and Economics, Waseda University)
    Abstract: Conditional cash transfer programs (CCTs) are a new strategy for reducing poverty that aims to break the cycle of poverty that carries across generations by promoting human capital formation with a direct transfer of cash and services. In the past decades, CCTs have been introduced as an integral component of social protection in many countries in Latin America. Program designs vary significantly across countries and the factors that explain these differences in terms of coverage, beneficiary selection methods, conditionality, and support for beneficiaries’ insertion into the labor market remain to be explored. Comparing the cases of Chile, Brazil, and Mexico, I demonstrate that democracy, partisanship, market openness, and economic growth rates are crucial determinants of CCT variation.
    Keywords: social protection, conditional cash transfers programs(CCTs), poverty, Latin America, Mexico, Brazil, Chile, Progresa-Oportunidades-Prospera, Bolsa Família, Ethical Family Income, Chile-Solidario
  2. By: Wagner Piazza Gaglianone
    Abstract: This paper provides a collection of empirical findings and stylized facts about inflation expectations in Brazil. A set of 23 papers selected ad hoc from the literature is employed in order to provide a concise overview of several aspects of these expectations, such as disagreement, forecast bias, role of information, epidemiology, driving-forces of the inflation expectations’ formation process, and credibility of the monetary policy, among others. These findings form a practical guide about inflation expectations in Brazil, which might be useful for policymakers and academics interested in designing forward-looking policy rules as well as developing macroeconomic models for the Brazilian economy
    Date: 2017–09
  3. By: Jere Behrman; Dante Contreras; Isidora Palma; Esteban Puentes
    Abstract: We study wealth disparities in the formation of anthropometrics, cognitive skills and socio-emotional skills. We use a sample of preschool and early school children in Chile. We extend the previous literature by using longitudinal data, which allow us to study the dynamics of child growth and skills formation. Also, we include information on mother's and father's schooling attainment and mother's cognitive ability. We find that there are no significant anthropometric differences favoring the better-off at birth (and indeed length differences at birth to the disadvantage of the better-off), but during the first 30 months of life wealth disparities in height-for-age z scores (HAZ) favoring the better-off emerge. Moreover, we find wealth disparities in cognitive skills favoring the better-off emerge early in life and continue after children turn 6 years of age. We find no concurrent wealth disparities for and socio-emotional skills. Thus, even though the wealth disparities in birth outcomes if anything favor the poor, significant disparities favoring the rich emerge in the early post-natal period. Mother's education and cognitive ability also are significantly associated with disparities in skill formation.
    Date: 2017–09
  4. By: Roberto Álvarez; Aldo González
    Abstract: Recent evidence for several countries shows a decline in TFP growth. However, there is not much evidence for developing countries and much less regarding the impact of competition in product markets. In this paper, we analyze the impact of competition on selection and productivity growth in Chile. Our results indicate that competition has a positive effect on TFP growth and the probability of exit for lagging firms. Our results are robust to alternative methodologies for calculating TFP and to the inclusion of other variables that may affect firms’ TFP growth.
    Date: 2017–09
  5. By: Elisabet Rodriguez Llorian (University of Manitoba); Janelle Mann (University of Manitoba)
    Abstract: This presentation examines the link between healthcare expenditure and GDP in Latin American and Caribbean countries using the Stata command xtwest to estimate the error-correction-based cointegration tests for panel data featured in The Stata Journal (Persyn and Westerlund, 2008). Extensions of unit root and cointegration tests to a panel data-approach allow investigation of the dynamics for developing countries, which tend to have shorter available time series. I employ several unit-root tests coded as xtunitroot to determine whether the panel is stationary and Westerlund (2007) coded as xtwest to analyze the relationship and dynamics between health expenditure (total, private, and public) and income. Cointegration tests for panel data have increased power properties over traditional tests because of increased degrees of freedom and the inclusion of heterogeneous cross-country information. Results suggest that all categories of health expenditure move to maintain a stable long-run equilibrium. This presentation is an interesting case study of the use of Stata commands within economics. All empirical analysis was conducted in Stata and will highlight several recent developments within time-series techniques applied to panel data that have yet to be coded within Stata to make said tools accessible to researchers.
    Date: 2017–09–20
  6. By: Roxana Gutiérrez (Queen Mary University of London. School of Business and Management); Luciana Méndez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This article assesses the extent to which historical levels of inequality affect the creation and survival of businesses over time. To this end, we use the Global Entrepreneurship Monitor (GEM) survey across 66 countries over 2005–2011. We complement this survey with data on income inequality dating back to early 1800s and current institutional environment, such as the number of procedures to start a new business, countries’ degree of financial inclusion, corruption and political stability. We find that although inequality increases the number of firms created out of need, inequality reduces entrepreneurial activity as in net terms businesses are less likely to be created and survive over time. These findings are robust to using different measures of inequality across different points in time and regions, even if excluding Latin America the most unequal region in the world. Our evidence then supports theories that argue early conditions, crucially inequality, influence development path.
    Keywords: Inequality; entrepreneurship; panel data; instrumental variables
    JEL: M2 O1 D3 C23
    Date: 2017–10
  7. By: Daniele Girardi (University of Massachusetts Amherst); Samuel Bowles (Santa Fe Institute)
    Abstract: To study the effect of political and institutional changes on the economy, we look at share prices in the Santiago exchange during the tumultuous political events that characterized Chile in the early 1970s. We use a transparent empirical strategy, deploying previously unused daily data and exploiting two largely unexpected shocks which involved substantial variation in policies and institutions, providing a rare natural experiment. Allende's election and subsequent socialist experiment decreased share values, while the military coup and dictatorship that replaced him boosted them, in both cases by magnitudes unprecedented in the literature.
    Keywords: institutional shocks, natural experiment, share prices, Chile, socialism, military coup, elections
    JEL: P00 P16 D02 E02 N2
    Date: 2017

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