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As Bagus and Howden (2010) highlighted, one of the paths to achieve a more fruitful understanding of the business cycle involves examining saving as a heterogeneous analytical category. The aim of this paper is to continue this line of inquiry using the capital-based framework developed by Garrison (2001). This paper contributes to the literature by studying the impact of heterogenous savings on economic growth and business cycles in a capital-based macroeconomics framework. With this aim the implications of disaggregated saving is analysed by means of the differential market signals that are generated by cash-build savings (Pătruți, 2017) and loanable funds accessible through the credit markets.

We analyse gender gaps in published works on economics in Uruguay. First of all, we describe the evolution of the professional context and female participation in the discipline. We then provide an empirical analysis of the research output based on two databases: one containing working papers and technical documents and the other including articles published in journals. The main results are: a) men produce more published articles than women but there is no gender gap in working papers; b) women and men are unevenly represented throughout different fields; c) collaboration with non-local authors is more likely among men than women; d) non-local co-authorship is strongly associated with the gender gap in journal articles production.

The past twenty years have seen increased importance attached to high growth firms (HGFs). Despite decades of research, our knowledge of HGFs remains limited. Scholars have asserted that a key differentiator of HGFs is their ability to create value for their customers, yet this relationship has gone untested. This paper makes an important contribution to the literature by empirically exploring this relationship. Drawing on comparative cohorts of HGFs and non-HGFs, this paper finds that HGFs were found to be much more likely than their non-HGF counterparts to be positively influencing customer perceived value, the creation of which is considered to be an important enabler of firm performance and growth. In addition to its empirical contribution to the high growth entrepreneurship literature, this paper raises issues for future research.

The objective of this paper is to evaluate the impact of fiscal instruments for Colombia on two of the country’s main issues: income inequality and informality, phenomena that have been exacerbated by the pandemic. For this purpose, we built a DSGE model whose main differentiating element is the level of liquidity of households. The model carried out various simulations of transfers to households, and we examined the effects of these on different macroeconomic variables. We conclude that for the economy to return to the same fiscal adjustment it had before a transfer, the government will somehow have to increase the productivity of the formal sector, as this increase will have a positive effect on growth, increase income taxes and employment, and decrease informality.

The neorealist approach to institutional change has the merits of emphasising the importance of the Dominant Social Bloc (DSB) in institutions, and of integrating economics, society, and politics in the formation and breakdown of the DSB. Since this approach was not designed for Colombia, it is necessary to integrate certain characteristics, such as economic dependence, armed conflict, and drug trafficking. This paper presents the first theoretical adaptation of the neorealist approach for a Latin American country. This extended theoretical framework evinces the role of crime and violence in providing political stability to an accumulation regime that satisfies the demands of a narrow DSB.

The Great Recession (2008-2013) worsened the labor market position of young Spaniards. despite governments launched labor market reforms in 2010 y 2012 to improve labor stability, permanent employment accounted for only 10 percent of total new contracts. This paper tries to disentangle which factors are hindering the promotion of open-ended contracts to stabilize Spanish young workers into permanent employment. These analysis use panel data from the MCVL (Muestra Continua de Vidas Laborales). The results indicate that, although having an open-ended contract increases the probability of being employed after two years, only 50 percent of these initial contracts survive. The structure of labor demand explains this instability.

This paper analyses the scope, origins, justification, and commitments of the extended fund arrangement (EFA) signed by the Ecuadorian government and the IMF in March 2019. This agreement, which represents a little more than a third of Argentina’ Stand-By Agreement, promotes Central Bank independence, austerity, as well as structural adjustment policies, but its basic’ diagnosis omits external sector problems. This paper presents the implications and contradictions of the agreement to promote structural changes in the real sector and how these foster policies that protect the interests of bondholders and bankers.

This paper investigates the impact of the unprecedented climate shocks of the 2010 in Colombia on the results of the Saber 11 standardized test for the 2010- 2012 period. By using two unique datasets, this paper contributes to the literature by providing a better estimate of the human capital costs of climate shocks. The findings indicate that the climate shocks occurred on 2010 decreased Saber 11 test scores. The impact was stronger for female students, students from rural areas and students from low-income families. A possible channel of transmission is identified: the destruction of schools.

In this paper I discuss and develop measures of upstreamness and downstreamness to describe the position of countries and sectors in global value chains. Both measures are defined as the distance between exports and either final demand (upstreamness) or primary factors (downstreamness). When added together, they create a single measure of chain length, and reveal the position of the chain in international trade. I show the usefulness of these measures for highlighting aspects of international participation in value chains that cannot be deduced from measures developed previously. In particular, the measures proposed here better describe the specialization of countries along value chains.

The aim of this paper is to assess the stability of the impacts of real exchange rate undervaluation and domestic technological capabilities on growth across development levels. Panel regressions with development-level interactions are used to test the stability of these variables’ impact on growth. The results show that real undervaluation is a driver of growth across all development levels, once technological capabilities are accounted for; however, it is more important for developing and developed countries than for emerging countries.

The aim of this paper is to verify whether Peru has suffered from Dutch disease. To do this, a VARX model with monthly data from 2003 to 2020 is used to analyze whether the mining boom prices of the 2000s and 2010s have had a negative impact on the real sector, especially on non-primary manufacturing. Results show that a real exchange rate shock explains 8.2% of the variation in non-primary manufacturing. Even though the effect is significant, it is relatively small, and this is due to the Peruvian Central Bank intervening to reduce exchange rate volatility

This paper studies the effects of fixed-term contracts on workers. Specifically, the paper analyzes their impact on wages and on satisfaction levels. Regulations governing fixed-term and indefinite contracts in Colombia and the main labor reforms related to these two types of contract are analyzed. Women, young and low-educated workers, who work in small firms, in the private sector and in construction or manufacturing are most likely to have fixed-term contracts. In terms of wages, we found a significant raw and adjusted wage gap against workers with fixed-term contracts. Finally, we found, as expected, evidence that fixed-term contracts reduce the level of worker satisfaction.

This paper studies the effect of economic instability, income inequality and openness in the transition to different growth regimes for 18 Latin American countries during the 1980-2014 period. The study is carried out determining three different levels: low, middle and high economic growth. The countries are categorised according to the method of k-median clustering. We use panel data estimation applying random effects model and ordered logit. The results indicate that instability and inequality negatively affect the economic performance of the region, while openness is not a significant factor in explaining economic growth.

There are controversies regarding the applicability of Modern Money Theory (MMT) to emerging countries. In this paper, we shed light on this debate by analyzing the monetary sovereignty and fiscal policy regime in Brazil from 1999 to 2019. An empirical assessment shows the government has a considerable ‘degree’ of monetary sovereignty. However, fiscal rules imposed many restrictions on the State’s capacity to spend, subordinating fiscal policy to austerity. As there are no major macroeconomic constraints to Brazilian monetary sovereignty, it is necessary to change fiscal rules to reorient fiscal policy towards full employment in line with MMT prescriptions.

En este artículo formulo una relación teórica de fundamento microeconómico entre un Banco privado monopólico y la tasa óptima de inflación. La relación propuesta es la base para establecer una condición suficiente para la independencia de la Banca Central. La parte central del artículo lo consti tuye un modelo que expone las condiciones que se requieren para igualar las tasas óptimas, social y privada, de la inflación. A pesar de la sencillez del argumento, se pueden deducir algunas proposiciones de "Economía Constitucional".In this paper I propose a microeconomic based theoretical relation between a private monopolist bank and the optimal intlation rateo The proposed relation is the basis to establish a sutficient condition for the central bank independence. The core of this paper is a model showing the conditions required to equalize the optimal social and private rates of inflation. Notwithstanding the very simple nature of the argument, we can deduce from it some propositions of "Constitutional Economics".

El artículo hace un breve análisis de los flujos de capital hacia América Latina durante el último lustro, atraídos por economías menos intervenidas por el Estado, más abiertas al comercio internacional, más estables y equilibradas en sus variables macroeconómicas fundamentales. Seguidamente se examina la economía colombiana en los aspectos de crecimiento, inflación, agregados externos, monetarios y fiscales para concluir la apreciación del peso causada por la repatriación de capitales y las expectativas sobre una nueva bonanza petrolera hacen más difícil el desarrollo de la producción de bienes transables en el país.This paper analyses briefly capital inflows in Latin America duringthe last five years which were attracted by less state intervention,more openness to international trade and more stable economies in their macro variables.Next, the paper examines the Colombian economy in themes such asgrowth, inflation, external and fiscal balances, to conclude that the appreciation of the peso, caused by the capital inflow and the expectations of a new oil boom, makes it more difficult to developthe development of tradable within the country.

Currie, Lauchlin, " The Theory of Growth", Cuadernos de Economía, Vol. XIII, numbers 18-19, Bogota, 1993, pp. 377-390. This paper is an attempt to develop an hypothesis on what Lucas has called the "mechanics" of growth. It is largely an endogenous theory, modelled on Allyn Young's famous paper, but also attempts to incorporate the impact of exogenous phenomena on growth. It treats business investment as following rather than as a leading sector. If valici, the hypothesis has important implications for both theory and policy.Currie, Lauchlin, "La teoría del crecimiento", Cuadernos de Economía, Vol. XIII, números 18-19, Bogotá, 1993, pp. 377-390. Con este artículo se pretende desarrollar una hipótesis con base en la cual Lucas se refirió al "mecanismo" del crecimiento. Esta es una vasta teoría endógena del crecimiento, cuyos esbozos originales se encuentran en los famosos trabajos de Allyn Young, pero que a la vez se propone incorporar el impacto de los fenómenos exógenos sobre el crecimiento. La teoría trata de la inversión comercial como un resultado más que como un sector líder. De ser válida esta hipótesis, sus implicaciones serán importantes tanto para la teoría como para la política económica.

The economic discipline is characterised by hierarchical dualisms. This paper examines formal/informal and productive/reproductive binary categories by means of a dialogue between the social reproduction theory and the popular economy. A starting point is the wealth of feminist contributions that highlight both reproduction and work as the heart of socioeconomic phenomena. Based on formalization processes in Latin America, the article explores how public policy interventions focus on the productive sphere. However, upon closer examination, these policies seem to neglect reproductive activities, as well as the demands of popular sectors. We argue that the contributions of feminism are necessary to broaden the economic field.

One of the main challenges for the Colombian post-conflict is to develop sustainable proposals for peasant families that were affected by the armed conflict. With the purpose of analyzing this challenge, after the introduction, the second part of the paper presents the land possession dynamics in Colombia, criticizes the Green Revolution approach and discusses theoretical concerns about agroecology. The third section highlights the importance of combined microfinance in comparison to financialized microfinance, for financing rural projects and agroecology. Furthermore, this part argues that the combination of agroecology and combined microfinance is a powerful tool to make scenarios sustainable for small producers. Finally, the fourth section concludes.

This paper analyses the regional economic differences in the impact of lockdown measures to prevent the spread of COVID-19 ordered by Colombia’s national gov­ernment. Using an input-output model, we estimate regional economic losses by extracting a group of formal and informal workers from different sectors of the economy. Results show regional differences in the impact of lockdown measures on their labour markets, local economies, and productive sectors. We also find that peripheral regions consolidate a higher number of informal workers in isolation than the interior regions. Regarding the economic impact, regional losses range between 5,4% of the GDP (Amazonia) and 6,3% (the Coffee Area and Antioquia).

This paper analyses the dynamics related to the representation of African Americans and Hispanics in every level of economics within U.S. post-secondary institutions from 1995 to 2019. I show that there is underrepresentation of Hispanics and African Americans in economics and evaluate some of the possible reasons for the persistence of socioeconomic barriers, including discrimination and attitudes of self-isolation, which block minorities from advancing in academia and professional areas. I discuss some of the advances in economics that address the discrimination problem and some models that try to explain its existence. I present ways in which each member of the economics community could help to alleviate the underrepresentation of minorities in the field and relate some of the posible effects of this problem to non-U.S. institutions that teach economics. Finally, I discuss why addressing underrepresentation and discrimination in economics is important.

In this paper, we study the underrepresentation of women in economics in Brazil by analysing the evolution of their academic careers and their participation in two leading national economics conferences. To depict the path of women in the profession, we use novel data collected from annual surveys carried out by the Brazilian Women in Economics research group, data from the ANPEC exam, the unified admission exam for graduate programmes in economics and secondary data provided by the two main economics associations in Brazil. We find that it is more difficult for women to progress to tenure, and, therefore, there are “leaks in the academic career pipeline”. There are also persistent gender differences in the choice of research fields, as women mostly research on applied microeconomics.

Currently, the list of most violent cities in the world is dominated by Latin American cities. In 2015, Cali registered 65 homicides per 100,000 inhabitants. In Bogotá, the rate was 17 per 100,000 inhabitants. However, crime is not homogeneously distributed within the urban area, and literature indicates that the local response to crime affects the housing market. The objective of this paper is to estimate the relationship between housing prices and homicide rates in two Colombian cities: Cali and Bogotá. With the use of diverse sources of information and different econometric methodologies, we found that a 10% increase in homicide rates provokes a 2% decrease in housing prices in Cali and 1.8% in Bogotá.

This paper uses the National Health Survey to analyze the relationship between education and risky health behaviors, namely smoking, heavy drinking, obesity, and unsafe sexual behavior, by estimating the education gradient. We also provide evidence on the effect of education, socio-economic and knowledge variables on these health behaviors by gender and area of residence. The results indicate that there is a negative and significant effect of years of schooling on the probability of smoking, whereas the probability of heavy drinking and unsafe sexual behaviors increase with education, highlighting the importance of social and cultural factors.

This paper presents a new statistical toolkit by applying three techniques for data-driven causal inference from the machine learning community that are little-known among economists and innovation scholars: a conditional independencebased approach, additive noise models, and non-algorithmic inference by hand. We include three applications to CIS data to investigate public funding schemes for R&D investment, information sources for innovation, and innovation expenditures and firm growth. Preliminary results provide causal interpretations of some previously-observed correlations. Our statistical 'toolkit' could be a useful complement to existing techniques.

This paper analyses the role that R&D and innovation has on the likelihood of a firm becoming a High-Growth Firm (HGF). The microdata is from the Community Innovation Survey provided by Eurostat, it covers the period 2008–2010, and we classify the EU countries into three clusters: Core countries, Mediterranean countries, and New EU Members. Our results show that there are large differences between each cluster. Technological innovations promote the likelihood of Core countries becoming an HGF, non-technological innovations are a key determinant for Mediterranean countries, and in New EU members the drivers are more related to firm characteristics and international trade.

This paper aims to analyse asymmetric volatility dependence in the exchange rate between the British Pound, Japanese Yen, Euro, and Mexican Peso compared to the U.S. dollar during different periods of turmoil and calm sub-periods between (1994-2018). GARCH and TARCH models are employed to model conditional

This paper analyses a multi-sector market economy where preferences are non-homothetic and satiable. Capital and labour are the production factors. Food and manufactured goods are produced with a constant-returns-to-scale technology and an increasing-returns-to-scale technology, respectively. Results include: an original capital accumulation process is required for manufacturing industrialization to take place, a minimum market size is needed for the economy to operate, and capital property concentration diminishes aggregate demand. Full general equilibrium is possible for intermediate degrees of capital concentration, but the price system collapses under high degrees as an economy regulator, labour unemployment is unavoidable, and a minimum wage is justified to enhance economic activity.

This paper studies the evolution of the gender wage gap in Colombia at different points of wage distributions. Using DiNardo, Fortin, and Lemieux’s (1996) decomposition, we find that the enormous increase in female workers’ educational achievement has helped to reduce the gender gap, mainly at the top of the wage distribution. However, this effect has been countered by the reduction in the proportion of female workers in the public sector and those with indefinite contracts. Moreover, using the Arellano et al. (2017) methodology, we estimate the adjusted gender wage gap whilst controlling for sample selection. In both analysed years, our main finding was a clear glass-ceiling pattern that was slightly reduced in 2010.

This paper aims to establish the theoretical and empirical link between structural change and financial fragility based on the theories of Thirllwall's Law and Minsky's financial instability. In order to do so, a descriptive and econometric panel analysis is carried out for 1846 Colombian companies during the period 1996-2015. A new indicator of financial fragility is created, and from this a relationship is established between the company's balance sheets, structural change, economic growth, the size of the firm, and the Minsky effect that measures the endogeneity of the debt cycle.

This paper analyses the continuities and discontinuities regarding the concept of structural change in Latin American structuralism and neo-structuralism and considers the global context in which these ideas and their variations are produced. In this sense, the transformations of capitalism from 1950 onwards are taken into account as are the diagnoses and strategies promoted by the ECLAC to ultimately achieve structural change through structuralism and neo-structuralism. How the role of the state is conceived in each of these contexts and the consequences derived from state intervention to promote the structural change are also analysed.

The Pact for Mexico signed in 2012 identified 108 policy actions to be implemented during the government of Enrique Peña Nieto. The signing of this agreement was the prelude to a new wave of market reforms. This article summarizes a previous document in which we analysed each reform implemented in several areas: labour, education, fiscal, financial, economic competition, telecommunications, and energy. This paper affirms and insists on the need to launch a new development agenda that promotes sustained growth, with the main focus being to reduce inequality and promote social mobility.

This paper aims to explain the causes of the 2018/2019 Argentinian crisis by means of a growth cycle model a la Goodwin, where the aggregate demand is wage-led, the wage-share is predatory of the external sector, and the financial norm stands as an exogenous apex-predator of both real wages and the current account. Its main results allow us to understand the stylized facts of the Argentinian economy: a higher financial norm increases inequality and required current account surpluses, reduces stability, and increases volatility and recessions length.

This paper was born with the purpose of encouraging academic debate within the economic discipline that has been dominated by a purely orthodox or mainstream approach. One of the most innovative books in the expository-pedagogical part and its content is represented by the Anti-Blanchard macroeconomics by Emiliano Brancaccio. Beyond the analysis of the two contrasting models, the Anti-Blanchard model is used to study the situation in several Latin American countries. In particular, the structural change happened in those countries since the stronger wave of increasing neoliberal policies seem to fit particularly well in the explanation of the Anti-Blanchard model.

Standardized test scores play a central role in determining college admission decisions in both developed and emerging countries. For that reason, many courses are offered by schools and other educational institutions to prepare students for the exams. However, it is still unclear whether additional preparation has a positive and significant effect. The objective of this paper is to use the results of the Colombian high-school exit examination to gain a better understanding of the relationship between preparation and test results. Our results show that, on average, preparatory activities are associated with an increase of approximately 0.06 standard deviations in scores.

Seasonal components have been found in the price of most commodities, where prices are largely determined by the anticipation of seasonal demand and/or supply. This paper presents a methodology to determine seasonal forward prices in the electricity generation markets. A Cournot competition to characterize this market is assumed. Forward prices are calculated in accordance with the demand elasticity of the forwards and spot price through a differential or “gap” that represents the risk premium for the current forwards, plus some non-observable heterogeneities. The distribution of the given quantities in seasonal contracts is carried out through the classic portfolio theory. This methodology is applied to the Colombian case, and shows that it will be more profitable for generators to sell the proposed seasonal hydric forwards.

The wage curve and involuntary unemployment can usually be explained by the efficiency wage theory. However, the explanations are contradictory. In efficiency wage theory, unemployment is caused by high wage; however, for the wage curve, the low wage is due to high unemployment. In this paper, we present an efficiency wage model with equilibrium restricted by demand. Our model shows that the explications of unemployment and wage curve are indeed congruent.

This paper uses the option value theory to analyse whether there is any value in postponing childbearing for young women. The main insights are based on the idea that the costs of bearing tend to decrease in time and are subject to uncertainty. The analysis involves women with different socioeconomic characteristics. Our findings suggest that, as long as the possibilities of poorer women to reach high schooling increase, they will optimally postpone childbearing. In other words, early childbearing by impoverished women might be a rational reaction to their disadvantaged situation, where opportunities to reach high achievements are low, with or without a child.

This paper aims to link the financial fragility of non-financial firms to the way they expect proceeds from their sales: this is then represented in an agent-based macroeconomic model. Using Schumpeter’s monetary analysis, the model is based upon the payment and debt network between agents as well as the resulting net cash balances. As part of the model’s artificial economy, firms suffer financial fragility in relation with the credits granted by a single bank. They then use different adaptive mechanisms from their expected proceeds. The model is a complex system, and we extract results through numerical simulations.

In this paper we analyse the evolution of the middle class in Ecuador during the commodities boom (2005-2015). Using the definition of middle class proposed by López-Calva and Ortiz-Juarez (2014), we document an impressive rise of the middle class, which doubled in this period and peaked at 37.4% of the population in 2015. A factor that has played an important role in this social change is the reduction in inequality although growth is responsible for over three-quarters of the rise of the middle class. Based on an analysis of the macroeconomic and labour conditions associated with the evolution of the middle class, we argue that the recent slowdown in growth and reduction in inequality following the end of the commodities boom poses a risk for the size of the middle class. This is a serious challenge for policy makers.

Labour markets in developing countries are crucial to determine income inequality. In this paper, we use a panel data approach to study the effect of the informal sector on labour income inequality for thirteen cities in Colombia from 2002-2015. We use the rate of underemployment, the average duration of unemployment and the intensity of forced migration from armed conflicts as instruments for the urban informal sector. Results suggest that the informal sector has a positive and statistically significant effect on labour income inequality, which implies that an increase by one percentage point in the informal sector increases the Gini coefficient of labour income by about 0.07.

The paper examines the redistributive effect that was achieved by the Mexican taxbenefit system in 2014 using personal income tax, indirect taxes, social security contributions and social benefits. Our goal is to analyse the impact on inequality due to fiscal system action and then go further by demonstrating to what extent the contributions have on the total redistribution effect. The Mexican tax-benefit system is characterised by significant pre-fiscal income inequality. The contribution made by Vertical Equity (VE) is relatively important, but Horizontal Inequity (HI) reduces its impact. Income taxation does not greatly contribute to VE. Furthermore, some households receive unequal benefits, and therefore decrease the positive effect induced by VE.

This paper analyses the fixed broadband penetration effect on Latin American economic growth. The methodology employed consists of using a simultaneous equation model based on Koutroumpis (2009) and Katz and Callorda (2013). To aid this process, we use country level data from the World Bank and the Regional Dialogue about the Information Society-DIRSI for the 2010-2014 period. The results obtained stress the importance of broadband penetration for economic growth in Latin America.

In this paper we describe the evolution of international trade and the behaviour of export diversification in Colombia during the 1991-2011 period. In order to measure trade diversification and follow its behaviour throughout the period, we employ alternative ways of decomposing trade flows in their intensive and extensive margins, using the latter as a measure of diversification. The results indicate that trade diversification in Colombia is relatively limited, and seems to follow a pattern according to which exports are diversified mainly through increases in the number of products rather than in the number of partners. At the same time imports tend to diversify mainly by increases in the number of countries of origin rather than by the number of products. Furthermore, trade with upper middle-income countries seems to be an important driver of trade diversification.

This paper introduces two formal equivalent definitions of the Cobb-Douglas function for a continuum model based on a generalization of the Constant Elasticity of Substitution (CES) function for a continuum under not necessarily constant returns to scale and based on principles of product calculus. New properties are developed, and to illustrate the potential of using the product integral and its functional derivative, it is shown how the profit maximization problem of a single competitive firm using a continuum of factors of production can be solved in a manner that is completely analogous to the one used in the discrete case.

This paper seeks to evaluate and demonstrate the hypothesis of deindustrialization and Dutch Disease (DD) for the case of the Colombian economy by using a Beta regression model. The results of the research indicate that it is not possible to reject the suggestion that the mining and energy boom have potential adverse effects on the manufacturing sector.

This paper empirically explores the effects of payroll taxes, value-added taxes and corporate income taxes on a variety of labor market outcomes such as participation, employment, informality, and wages. The results are based on nationallevel data of labor variables for 15 Latin American countries, and indicate that the effects of each tax are markedly different and may depend on several aspects of labor and tax institutions. Payroll taxes reduce employment and increase labor costs when their benefits are not valued by workers, but otherwise may increase labor participation and not raise labor costs. Value-added taxes increase informality and reduce skilled labor demand. In contrast, corporate income taxes may help reduce informality, especially among low education workers, but when tax enforcement capabilities are strong they may reduce labor participation and employment of medium- and high-education workers.

This paper presents a literature review contextualized through the different stages of Colombian industrial history up to the first decade of the XXI century, when an attempt is made to organize the growing interest in the topic of entrepreneurship. We find a tight connection between public policy agenda setting and the definition of the research agenda of the topic. We also find a dualistic approach in the research of the topic, with universities and think-tanks leading the investigation on accumulative / innovative entrepreneurship, and a consultancy-bias group dedicated to the study of subsistence entrepreneurship.

In some economic games, participants systematically display behavior that departs from the model of payoff maximization, and this is usually attributed to social preferences. In this paper we focus on a new interactive context, a mixed-motive game called "Alternative Traveler's Dilemma" (ATD). In this context, most participants choose strictly dominated strategies. Preliminary studies suggest the reason for such a tendency is that participants have social preferences, usually competitive in nature. The question is whether some cognitive factors should also be included in models that account for the tendency at stake. More specifically, we investigate whether participants neglect payoff maximization, that is, whether they fail to notice that, by pursuing some competitive goal, they are not maximizing their payoffs. We report the results of an experiment that supports this hypothesis. We conclude that in order to explain anomalous behavior in the ATD, and similar games, we need to study the cognitive factors that bound participants' strategies and understanding of the game

In this paper we estimate the demand for official reserves in Latin America during the period 1995-2011. We assume that the main concern of the monetary authorities to demand reserves is the fear of suffering external drains, and its associated output costs. In other words, we attempt to show that the so-called precautionary motive drives the demand for international reserves in the region. Our econometric results confirm that Latin American countries demand ever increasing amounts of foreign exchange to protect themselves against the likelihood of external drains.