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on Central and South America |
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Issue of 2018‒07‒16
five papers chosen by |
| By: | Alberto Fuertes (Banco de España); Ricardo Gimeno (Banco de España); José Manuel Marqués (Banco de España) |
| Abstract: | In this paper we estimate inflation expectations for several Latin American countries using an affine model that takes as factors the observed inflation and the parameters generated from zero-coupon yield curves of nominal bonds. By implementing this approach, we avoid the use of inflation-linked securities, which are scarce in many of these markets, and obtain market measures of inflation expectations free of any risk premium, eliminating potential biases included in other measures such as breakeven rates. Our method provides several advantages, as we can compute inflation expectations at any horizon and forward rates such as the expected inflation over the five year period that begins five years from today. We find that inflation expectations in the long-run are fairly anchored in Chile and Mexico, while those in Brazil and Colombia are more volatile and less anchored. We also find that expected inflation increases at longer horizons in Brazil and Chile, while it is decreasing in Colombia and Mexico. |
| Keywords: | inflation expectations, affine model, real interest rate, risk premium |
| JEL: | G12 E43 E44 C54 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1819&r=lam |
| By: | Álvaro Riascos; Juan David Martín; Natalia Serna |
| Abstract: | During 2014, the Comisión de Regulación de Comunicaciones in Colombia enacted a Resolution by which permanence clauses or fixed-length terms in mobile telecommunications contracts were prohibited for network operators offering bundled mobile terminals and voice plans. Prohibition was enacted under the argument permanence clauses create switching costs, reduce competition, and generate information asymmetries. In this study we measure the impact of the Resolution on consumer, firm, and social welfare by estimating the structural demand for mobile terminals and conducting two counterfactual scenarios. We show switching costs by means of permanence clauses reduce consumer utility and increase the variance of the utility distribution. We also show the Colombian market for mobile terminals has been better off without permanence clauses, with both consumers and firms experiencing gains from the prohibition. However, variation in firm surplus is explained mostly by the variation in profits of incumbent network operators than by the variation in profits of firms selling terminals at cash price. Our study contributes to the literature of bundled sales and switching costs and is crucial from the perspective of regulation and industrial policy in the telecommunications sector. |
| Keywords: | switching costs; permanence clauses; structural demand; telecommunications; fixed-length contracts |
| JEL: | L50 L13 L11 |
| Date: | 2017–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:col:000508:016418&r=lam |
| By: | Carla Canelas (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Rachel Gisselquist (UNU-WIDER - United Nations University-Word Institut for Development Economic Research) |
| Abstract: | With the second largest indigenous population by percentage in Latin America, Guatemala is an important case for understanding horizontal inequality and indigenous politics. This paper presents new analysis of survey data, allowing for consideration both of indigenous and ladino populations, as well as of ethno-linguistic diversity within the indigenous population. Overall, our analysis illustrates both the depth and persistence of horizontal inequalities in educational and labour market outcomes, and a broad trend towards greater equality. Earnings gaps have been reduced by, among other factors, improved educational outcomes. Ethnic groups also show distinct patterns of wages and wage gaps, and there is evidence of a ‘sticky floor' effect at the lower ends of the income spectrum affecting some groups more than others. Our findings suggest that the focus on the indigenous/non-indigenous divide found in much of the economic literature on Latin America obscures meaningful diversity within the indigenous population. We posit that further consideration of such within-group diversity has implications for broader theories of ethnic politics, and in particular for understanding the comparative weakness of indigenous political mobilisation in Guatemala at the national level. |
| Abstract: | Avec la deuxième population indigène en pourcentage en Amérique Latine, le Guatemala est un cas important pour comprendre les inégalités horizontales et les politiques autochtones. Cet article présente une analyse nouvelle des données d'enquête, en tenant compte de la population indigène et ladino, ainsi que de la diversité ethnolinguistique au sein de la population indigène. Dans l'ensemble, notre analyse illustre à la fois la profondeur et la persistance des inégalités horizontales dans les résultats de l'éducation et du marché du travail et une large tendance à une plus grande égalité. Les écarts de revenue ont été réduits, entre autres facteurs, par des résultats scolaires améliorés. Les différents groupes ethniques montrent également des profils distincts de salaires et d'écarts de salaire, et il existe des signes d'un effet de « sol collant » aux extrémités inférieures du spectre du revenu affectant certains groupes plus que d'autres. Nos résultats suggèrent que l'accent mis sur la fracture indigène / non indigène trouvée dans une grande partie de la littérature économique en Amérique Latine obscurcit une diversité significative au sein de la population indigène. Nous postulons que l'examen approfondi d'une telle diversité dans le groupe ait des implications pour des théories plus larges de la politique ethnique et, en particulier, pour comprendre la faiblesse comparative de la mobilisation politique indigène au Guatemala au niveau national. |
| Keywords: | inequality,ethnicity,schooling,earnings,inégalité,ethnicité,scolarité,gains,Guatemala |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01658795&r=lam |
| By: | Mendez, Carlos |
| Abstract: | Bolivia has experienced large socioeconomic transformations in the last decades. Among them, almost half of the population currently lives in the main metropolitan regions of the country. Motivated by the potential for growth and development convergence in these regions, this article documents the evolution of human development disparities and convergence patterns over the 1992-2013 period. Using a distribution dynamics framework, this article evaluates both the transitional dynamics and the long-run equilibrium of the cross-regional distribution of human development. Results from the transitional dynamics analysis suggest that the formation of multiple clusters of convergence is a salient feature of inequality reduction in human development. On the other hand, results from the long-run equilibrium analysis suggest that the process of regional convergence is characterized by the transformation of a trimodal distribution into a left-skewed unimodal distribution. The article concludes emphasizing that the cross-regional distribution of human development in Bolivia is quite sticky at its left tail, and as a result, the least developed regions are still relatively far from achieving complete convergence in the long run. |
| Keywords: | convergence, distribution dynamics, human development, Bolivia |
| JEL: | O1 O15 O47 O54 |
| Date: | 2018–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87571&r=lam |
| By: | Arslan Razmi (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | I develop the implications for real exchange rate cycles of different policy preferences, focusing in particular on broadly stylized features of major Latin American and East Asian economies. Recent political science literature has emphasized the role of factors such as the influence of the manufacturing sector and the nature of labor markets. I formalize some of these insights in a developing country framework with policy makers who inter-temporally optimize and voters/audiences that are incompletely informed. Given the choice between assigning greater weight to immediate worker purchasing power versus generating manufacturing employment and income over time, I show that countries where policy makers choose the former are more likely to experience cycles with overvaluation, current account deficits, and abrupt (postponed) devaluations. |
| Keywords: | Political business cycles, real exchange rate, capital accumulation, balance of payments |
| JEL: | O25 D72 F41 O14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2018-14&r=lam |