nep-lam New Economics Papers
on Central and South America
Issue of 2018‒08‒13
three papers chosen by

  1. How Sensitive is Regional Poverty Measurement in Latin America to the Value of the Poverty Line? By Andrés Castañeda; Santiago Garriga; Leonardo Gasparini; Leonardo Lucchetti; Daniel Valderrama
  2. Sustainability and Green Business in Latin America during Globalization Waves By Geoffrey Jones
  3. The Macroeconomic Effects of Fiscal Consolidation in Emerging Economies: Evidence from Latin America By Yan Carriere-Swallow; Antonio David; Daniel Leigh

  1. By: Andrés Castañeda (World Bank); Santiago Garriga (Paris School of Economics - École des hautes études en sciences sociales); Leonardo Gasparini (CEDLAS-FCE-UNLP and CONICET); Leonardo Lucchetti (World Bank); Daniel Valderrama (Georgetown University – Department of Economics)
    Abstract: This paper contributes to the methodological literature on the estimation of international poverty lines for Latin America based on the official poverty lines chosen by the Latin American governments and commonly used in the public debate. The paper exploits a comprehensive data set of 86 up-to-date official extreme and total urban poverty lines across 18 countries in Latin America, as well as the recently updated values of the national purchasing power parity conversion factors from the 2011 International Comparison Program, and a set of harmonized household surveys. By using 3 and 6 US dollars per person a day at 2011 PPP as the extreme and total poverty lines for Latin America, this paper illustrates the sensitiveness of poverty rates to changes of the values of the poverty lines as a result of the recent update of the PPP values, the period of reference, and the relative cost of living across the countries in the region. The poverty lines with the 2011 PPP values lead to an increase in total poverty rates in Latin America when compared to the 2005 PPP values, while they leave the extreme poverty rate unaffected. In general, country-specific poverty rankings remain fairly stable to the values of the poverty lines selected.
    JEL: I3 I32 D6 E31 F01
    Date: 2018–08
  2. By: Geoffrey Jones (Harvard Business School, General Management Unit)
    Abstract: This working paper examines the impact of modern business enterprise on the natural environment of Latin America during the globalization waves between the nineteenth century and the present day. It argues that although global capitalism created much wealth for the region, this was at the cost of massive ecological destruction in Latin America. During the first global economy considerable wealth was created from the exploitation of natural resources for the land-owning elite in Latin America, at the cost of large-scale ecological destruction. During the Great Reversal in the mid-twentieth century, public policies aimed at "catching up" resulted in the co-proliferation of hydro-electric schemes and resulting co-creation of ecological damage by firms and governments. In the new global economy since 1980, renewed economic growth and consumerism resulted in mountains of waste in increasingly polluted mega-cities. Biodiversity and the natural environment have been challenged across the subcontinent. However there were interesting positives as these ecological horrors also created opportunities for a surprising cohort of green businesses across sectors ranging from beauty and health to eco-tourism. In the twenty first century both business and governments in the region needed to address sustainability issues far more seriously, before a point of no return was reached.
    Date: 2018–08
  3. By: Yan Carriere-Swallow; Antonio David; Daniel Leigh
    Abstract: We estimate the short-term effects of fiscal consolidation on economic activity in 14 countries in Latin America and the Caribbean. We examine contemporaneous policy documents to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Based on this narrative dataset, our estimates suggest that fiscal consolidation has contractionary effects on GDP, consistent with a multiplier of 0.9. We find these effects to be close to those in OECD countries based on a similarly constructed dataset (Devries and others, 2011). We also find similar estimation results for the two groups of economies for the effect of fiscal consolidation on the external current account balance, providing support for the twin deficits hypothesis.
    Date: 2018–06–13

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