nep-lam New Economics Papers
on Central and South America
Issue of 2019‒11‒25
four papers chosen by

  1. Inflation Targets in Latin America By José De Gregorio
  2. Voting for Democracy: Chile's Plebiscito and the Electoral Participation of a Generation By Ethan Kaplan; Fernando Saltiel; Sergio S. Urzúa
  3. Saving Rates in Latin America: A Neoclassical Perspective By Andrés Fernández; Ayse Imrohoroglu; Cesar Tamayo
  4. Selection and educational attainment: Why some children are left behind? Evidence from a middle-income country. By Xavier Ramos Morilla; Luciana Méndez Errico

  1. By: José De Gregorio (Peterson Institute for International Economics)
    Abstract: Many emerging-market economies have adopted inflation targeting regimes since they were introduced by New Zealand in 1990. Latin America has not been the exception. Currently eight Latin American countries conduct monetary policy through inflation targeting regimes: Brazil, Chile, Colombia, Guatemala, Mexico, Paraguay, Peru, and Uruguay. This paper reviews the history of chronic inflation in Latin America and describes these countries’ experience with inflation targets and their performance during the global financial crisis.
    Keywords: Inflation, Inflation Targets, Latin America, Monetary Policy
    JEL: E52 E58
    Date: 2019–11
  2. By: Ethan Kaplan; Fernando Saltiel; Sergio S. Urzúa
    Abstract: This paper assesses if voting for democracy affects long-term electoral participation. We study the effects of participating in Chile's 1988 plebiscite, which determined whether democracy would be reinstated after a 15-year long military dictatorship. Taking advantage of individual-level voting data for upwards of 13 million Chileans, we implement an age-based RD design comparing long run registration and turnout rates across marginally eligible and ineligible individuals. We find that Plebiscite eligibility (participation) significantly increased electoral turnout three decades later, reaching 1.8 (3.3) percentage points in the 2017 Presidential election. These effects are robust to different specifications and distinctive to the 1988 referendum. We discuss potential mechanisms concluding that the scale of initial mobilization explains the estimated effects. We find that plebiscite eligibility induced a sizable share of less educated voters to register to vote compared to eligibles in other upstream elections. Since less educated voters tended to support Chile's governing left-wing coalition, we argue that the plebiscite contributed to the emergence of one party rule the twenty years following democratization.
    JEL: C21 D72 N46
    Date: 2019–11
  3. By: Andrés Fernández; Ayse Imrohoroglu; Cesar Tamayo
    Abstract: This paper examines the time path of saving rates between 1970 and 2010 in Chile, Colombia, and Mexico through the lens of the neoclassical growth model. The findings indicate that two factors, the growth rate of TFP and fiscal policy, are able to account for some of the major fluctuations in saving rates observed during this period. In particular, we find that the model accounts for the low saving rates in Chile compared to Colombia until the late 1980s and the reversal in the saving rates thereafter. Also, a combination of high TFP growth and tax reforms that substantially reduced capital taxation seems to be responsible for the impressive increase in Chile's saving rate in mid 1980s.
    Date: 2019–11
  4. By: Xavier Ramos Morilla (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Luciana Méndez Errico (Instituto de Economía, Universidad de la República & EQUALITAS)
    Abstract: We model schooling as a sequential process and examine why some children are left behind. We focus on the factors that explain selection at early stages of the education system. Our findings for Uruguay suggest that long-term factors, such as parental background or ethnicity matter across all education stages while the effect of short-term factors, such as family income, wear out as individuals progress in the education system, suggesting a severe selection process at early stages.
    Keywords: Schooling transition, selection, inequality, education, ethnicity, cognitive and noncognitive abilities, sequential dynamic model
    JEL: I20 I24 J13 J15 J24
    Date: 2019–01

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.