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Based on a reading of Keynes according to which the General theory paves the way for an investment theory of aggregate income and a financial theory of investment, this paper focuses on an issue that is usually ignored by the currently trendy economic theories: the transcendental role played by financial institutions and money in a capitalist economy. Due to a failure of these institutions' assets to perform that induces a diminishment in the flow of cash and increases their aversion to risk, there comes a decrease in the financing of consumption and investment spending through these intermediaries; this, in turn, leads to declines in investment and consumption spending, which affects the flow of profits and wages available. The notion that this economy enjoys a general equilibrium should be discarded; likewise, the quantitative theory of money should be dispensed with. At the same time, once that we eliminate the assumption that the future is perfectly foreseeable, it is possible to conclude that these institutions are inherently plighted by a great uncertainty. The general performance of an economy improves insofar as the state successfully intervenes in order to sustain solvency, strengthening the resources via substantial spending, and does not limit itself to the financing of consumption. This paper considers the financial structure and the flow of income (especially aggregate profits), and then proposes an integrated model. [ABSTRACT FROM AUTHOR]

The main purpose of this paper is to present fuzzy sets theory as a reliable and straightforward methodology to measure poverty, which offers comparative advantages with respect to traditional methods. This paper also shows that fuzzy sets methodology is compatible with census data information to compute poverty indexes. Results of measuring poverty at state, municipal and town levels are presented for the case of Mexico and are compared with official results. Comparison reveals that fuzzy sets theory is an alternative that solve some of the methodological problems present in poverty lines and marginalization indexes, which makes it a helpful tool to evaluate and implement policies aimed at tackling poverty. [ABSTRACT FROM AUTHOR]

The fundamental idea of this paper is the use of a market mechanism to induce a redistribution of wealth in the exchange economy. In this market, operating parallel to the goods market, consumption rights initially assigned by the planner are exchanged freely. Such trades generate a variety of Walras equilibrium solutions, in a way similar to what can be obtained from lump-sum transfers. In this paper we analyze the special case with an egalitarian initial distribution of consumption rights across the population and applying a simple price rule for consumption rights. This case has the advantage that no information of the population's initial endowments is required to induce a redistribution of wealth that reduces the gap between the rich and the poor. [ABSTRACT FROM AUTHOR]

This paper presents a small open economy model to study the role of real interest rate shocks in Mexico. The interest rate is divided in two terms: an international rate and a country risk premia. Simulations show that the model with endogenous risk premia is able to explain several stylized facts at business cycle frequencies. Counterfactual analysis suggests that output volatility could be lowered by approximately 30 percent if interest rate shocks are eliminated, especially due to its country risk premia component. In the absence of such shocks, cyclical output and consumption would have fallen by 2 and 4.5 percent during the 1994-1995 recession, in sharp contrast with the falls of 12 and 16 percent observed in the data. [ABSTRACT FROM AUTHOR]

This paper compares the cost of electricity generation with a coal fired plant and a wind mill in Chile's Central Interconnected System. To the standard costs of coal generation (capital investment and fuel) we add local and global environmental externalities. The environmental cost of generating with coal is US$17/MWh, and the total cost is US$78/MWh. Wind generation is considerable more expensive, US$136/Mwh. [ABSTRACT FROM AUTHOR]

This paper analyzes a mixed oligopoly in which firms may hire managers and delegate their decisions to them for strategic reasons. Unlike previous research, we examine the case in which a public firm competes with a foreign firm and a domestic firm, both of them private. We show that these two private firms behave differently. In equilibrium, only the domestic firm strategically hires a manager that deviates from simple profit maximization. This leads to a social welfare higher than the one obtained when none of the firms hires a manager and that resulting from the competition of a domestic and a foreign firm run by managers. [ABSTRACT FROM AUTHOR]

This paper examines the contribution of entrepreneurs to productivity growth with data from Spanish Autonomous Communities (CA). The empirical analysis borrows from the theories that explain the existence and functions of entrepreneur as a result of division of labour when people differ in their entrepreneurial skills. We find a convergence effect in productivity of Spanish CA as quality of entrepreneurs increases overtime due to the fact that those territories with higher entrepreneurial base at the beginning of the period are also those with lower productivity. We also find empirical evidence supporting the hypothesis that entrepreneurial capital affects growth by acting as "knowledge filter". [ABSTRACT FROM AUTHOR]

In this paper we give matrix version of the deferred-acceptance algorithm for the matching model one to one. The new algorithm modifies the matrix of the agents preference. When the algorithm stops, it is shown that it coincides with the agents' optimal-stable matching. [ABSTRACT FROM AUTHOR]

In this paper we define a particular dynamic solution (Shenoy, 1980) for abstract games related to games with transferable utilities (TU-games). We show that this solution must contain some cycles of pre-imputations, maximal U-cycles (pro- vided this cycles exist). The existence of such cycles is strongly connected to the non-balancedness of the TU-game under study. Besides, the dynamic solution coincides with the core of the game in the case of balanced lu-games. Thus, it pro- vides an unifying solution concept for games with transferable utilities. [ABSTRACT FROM AUTHOR]

This paper examines the impact of the monetary policy of the United States, using the interest rate as instrument, on unemployment and inflation rates of Puerto Rico: an economy with special features. We discuss a theoretical model that support the construction of a VAR system defined by the three Variables mentioned. The empirical estimations indicated that the U.S. monetary policy actions precede the movements of the two economics indicators of the Island. Any implementation of the monetary policy is transmitted directly to prices in short run, and to the real sector, in the long run. [ABSTRACT FROM AUTHOR]

This paper presents an empirical evaluation of the evolution of trade relationships between Latin America and the European Union from 1992 to 2003, using the most recent data available. We focus on the volume, concentration by countries and areas, and the evolution phases, in the framework of the main intraregional agreements and the growing liberalization of these economies. We seek to determine whether the efforts made on both sides—specifically the changes in economic policies in many Latin American countries, the agreements to increase exchanges and the intensification of the political dialogue on both shores of the Atlantic—have achieved positive results. The general characteristics, their intensity, and their concentration in specific zones have been developed using a series of indicators that enable us to draw some conclusions about these transformations. [ABSTRACT FROM AUTHOR]