nep-lam New Economics Papers
on Central and South America
Issue of 2021‒02‒22
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Buscando virtudes en la lejanía: Recomendaciones de política para promover el crecimiento inclusivo y sostenible en Loreto, Peru By Ana Grisanti; Frank Muci; Jessie Lu; Jorge Tudela Pye; Miguel Angel Santos; Ricardo Hausmann; Yang Li; Fernando Miralles-Wilhelm
  2. Peripherical Financialization and Premature Deindustrialization: A Theory and the Case of Brazil (2003-2015) By José Luis Oreiro; Carmem Aparecida Feijó; Lionelo Franco Punzo; João Pedro Heringer Machado
  3. The Impact of Grade Retention on Juvenile Crime By Juan Diaz; Nicolas Grau; Tatiana Reyes; Jorge Rivera

  1. By: Ana Grisanti (Center for International Development at Harvard University); Frank Muci (Center for International Development at Harvard University); Jessie Lu; Jorge Tudela Pye; Miguel Angel Santos (Center for International Development at Harvard University); Ricardo Hausmann (Center for International Development at Harvard University); Yang Li; Fernando Miralles-Wilhelm (Center for International Development at Harvard University)
    Abstract: Loreto es un lugar de contrastes. Es el departamento más grande del Perú, pero se encuentra entre los de menor densidad poblacional. Su capital, Iquitos, está más cerca de los estados fronterizos de Brasil y Colombia que de las capitales de sus regiones vecinas en el Perú - San Martín y Ucayali. Sólo se puede llegar a Iquitos por vía aérea o fluvial, lo que la convierte en una de las mayores ciudades del mundo sin acceso por carretera. Desde la fundación del departamento, la economía de Loreto ha dependido de la explotación de recursos naturales, desde el boom del caucho a finales del siglo XIX y principios del XX hasta la extracción petrolera y explotación de recursos forestales que predomina en nuestros días. Este modelo ha traído consigo daños ambientales significativos y ha producido un patrón de crecimiento lento y volátil, que ha abierto una brecha cada vez más amplia entre la economía de la región y la del resto del país. Entre 1980 y 2018, Loreto creció a una tasa promedio compuesta anual cuatro veces menor a la del resto del Perú. Es decir, mientras el resto del Perú triplicó el tamaño de su economía, la de Loreto creció algo menos que un tercio. En la última década (2008-2018), la región también se ha venido distanciando de sus pares amazónicos en el país (Ucayali, San Martín y Madre de Dios), que han crecido a una tasa promedio anual cinco veces mayor. En este período, el ingreso promedio por habitante en Loreto ha pasado de ser tres cuartas partes del promedio nacional en 2008 a menos de la mitad para 2018. Además del rezago económico - o quizás como consecuencia de él -, Loreto también se ubica entre los departamentos con peores indicadores de desarrollo social, anemia y desnutrición infantil del Perú. En este contexto, el Laboratorio de Crecimiento de la Universidad de Harvard se asoció con la Fundación Gordon and Betty Moore para desarrollar una investigación que proporcionara insumos y recomendaciones de política para acelerar el desarrollo de la región y generar prosperidad de forma sostenible.
    Keywords: Loreto, Peru
    Date: 2020–12
    URL: http://d.repec.org/n?u=RePEc:cid:wpfacu:388&r=all
  2. By: José Luis Oreiro (None); Carmem Aparecida Feijó; Lionelo Franco Punzo; João Pedro Heringer Machado
    Abstract: The main objective of this paper is to discuss the concept of financialization in developing economies, arguing that the broad definition of financialization - understood as a growing role of motivations, markets and financial institutions in the operation of domestic and international economies – does not take into consideration important features of those economies, such as the hierarchy of currencies and the subordination to the principles of the so-called Washington Consensus. The latter imposed the adoption of a foreign savings-driven growth model, which mostly applied to Latin American countries. Hence, the financialization process in LDCs will be denominated peripherical financialization, since it is associated with dependence upon capital inflows from developed countries and with the reduction in the autonomy of their macroeconomic policies, even within flexible exchange rate regimes. Attraction of capital inflows to countries with a subordinate position in international financial markets, requires high interest rate differentials which have as side effect a trend to the overvaluation of real exchange rates. This creates a trap, high interest rates with an associated overvalued exchange rate. This trap reduces policy space, turning procyclical even fiscal policy. Moreover, the overvaluation of real exchange rate reduces price competitiveness of the manufacturing industry, becoming the main drive toward these countries’ premature deindustrialization. It will be shown that the macroeconomic performance of the Brazilian economy in the period 2003-2015 fits almost perfectly this model of peripherical financialization.
    Keywords: Financialization, Premature Deindustrialization, high interest rate-overvalued exchange rate trap
    JEL: O11 O14 O16
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2027&r=all
  3. By: Juan Diaz; Nicolas Grau; Tatiana Reyes; Jorge Rivera
    Abstract: This paper studies the causal effect of grade retention in primary school on juvenile crime in Chile. Implementing a fuzzy regression discontinuity design, we find that repeating an early grade in primary school decreases the probability of committing a crime as a juvenile by 14.5 percentage points. By estimating and simulating a dynamic model, we show that the RD result is mainly driven by two mechanisms related to the timing of grade retention. First, grade retention in early grades decreases the probability of grade retention in late primary school grades. Second, late grade retention in primary education has a positive and more relevant effect on crime than the direct effect in early grades. Our findings support the argument that, conditional on the decision to keep grade retention as an ongoing policy, the optimal implementation at the margin is to retain students in early grades in order to avoid retention in later ones.
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:udc:wpaper:wp513&r=all

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