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In the last two decades, the monetary aggregate M3, reference aggregate of the Eurpoean Central Bank (ecb), has experienced a strong tendency towards its accumulation in the most liquid components: currency in circulation and overnight deposits, to the detriment of the modalities of deposits with an agreement maturity, and other less weighting components. Although this behaviour is compatible with a long period of low interest rates, it is important to look for other explanations, complementary and/or alternative, to the strong concentration of money demand in the most liquid components. This drift of the reference aggregate can have consequences on price stability, the ultimate objective of the ecb, while it can be a potential factor in the modification of saving behavior. In this paper, along with the analysis of the evolution of the seven components of M3 1997-2018, we present the results of an empirical work on the stability of the relationship between the demand for money and the macroeconomic variables that determine it. The results show that the strong financial disturbances and uncertainties as a result of the crisis, as well as the unconventional decisions on monetary policy adopted by the ecb have some explanatory capacity of the studied phenomenon. [ABSTRACT FROM AUTHOR]

This paper studies the link between technological innovation, the transformation of business (and management) models, and the evolution of work. In a few pages, it goes through the history of technological changes and the debates that took place around the transformation of employment. Debates that had certain points in common with today's questions about the future of work, like the effects of robotization, "uberization", and digital transformation. It takes into account the possibility that the emergence of the platform economy could eliminate companies in their current form, and finds certain trends common to a new business model, which is quitting the field of social relations and positioning directly between the hierarchical firm and the market. It ends with a question: Instead of talking about the threat of a jobless future, shouldn't we start looking at the threat of a bossless future? [ABSTRACT FROM AUTHOR]

The frustration in Latin America with neoliberal economic reforms has reawakened a number of debates, especially about inequality (Palma, 2019a) and productivity growth --in 2018, the region's average productivity was just 8% higher than in 1980, equivalent to an annual average growth rate of just 0.2%--. Meanwhile, in the previous cycle, from 1950 to 1980, productivity levels more than doubled, with an annual growth rate of 2.8%. One of these debates is related to the problem of deindustrialization --in particular, the question of whether it is "premature" or if it includes a component of "Dutch disease"--. This paper analyses the role of manufacturing in economic growth, and shows the dynamics of that deindustrialization in high-income as well as middle-income countries. It concludes that the success of emerging Asia is rooted in its ideological pragmatism, which led it in the 1980s and early 1990s to use reforms as a mechanism for strengthening and accelerating their already ambitious processes of industrialization --not for carrying out a "non-creative destruction" of their manufacturing, as happened in almost all of Latin America--. This in spite of the fact that many of the industrialization processes in emerging Asia suffered, in its time, from similar problems to those experienced by Latin American industrialization, if not worse. [ABSTRACT FROM AUTHOR]

Following the indicators used by the International Labor Organization (ILO) in its studies and the publication Reversing Pension Privatizations: Rebuilding Public Pension Systems in Eastern Europe and Latin America (2018a), this analysis evaluates pension systems in Mexico in order to contextualize the debate regarding the following questions: Are privatizations a failure? Do we have to reverse privatizations or just reform the current system? Would it be enough? Or, do we have to build an integral system of public pensions? This paper presents a diagnosis of the current situation of the pension system in Mexico, in order to contextualize possible responses and the main challenges and circumstances for Mexican society. The lack and insufficiency of pensions for an aging population where most people work in the informal sector with low-income jobs poses a challenge to the pension system. [ABSTRACT FROM AUTHOR]

Background: In 1993, the Protocol of Guatemala was signed to the General Treaty of Economic Integration; this event marked the relaunching of the integration process in the economic sphere. In this new stage, the integration process is part of a strategy of international insertion of the region within a context of international fragmentation of production. The main objective of this paper is to estimate quantitatively the degree of contribution of the productive sectors to the Central American economic integration process. Methodology: This article elaborates a ranking of the productive sectors according to the quantitative contribution to Central American economic integration process between 2005 and 2016. Three criteria and ten indicators are used to calculate a compound index. In addition, a characterization of the productive sectors of the ranking is carried out through five complementary indicators. Results: The results allowed the identification of 15 sectors that were ranked from highest to lowest according to their contribution to the process of economic integration between 2005 and 2016. Seven sectors base their participation in the ranking in a high degree of commercial and productive complementarity (criteria 1), six in the diversification of exports (criteria 2), and only two in a competitive insertion in international markets (criteria 3). Conclusions: It is concluded that there has been little variation in the ranking structure between 2005 and 2016; a weak competitive insertion of Central America in global trade; a prevalence of industry in the ranking, and a low level of knowledge embedded in production and the predominance of the United States and Dominican Republic as main extraregional destinations of the sectors that are part of the ranking. Lastly, the majority of presence of Guatemala and El Salvador in intraregional trade of the selected sectors demonstrates that the achievement of a balanced participation of Central American countries is still a pending challenge of the integration process. [ABSTRACT FROM AUTHOR]

Background: This paper assesses the sustainability of the Spanish economic development model for the period 1980-2010. Moreover, we carry out a comparative analysis with the biggest European economies: France, Germany, Italy and United Kingdom. Methods: In order to achieve the aim of this paper, co-integration techniques have been applied. Through these techniques, we have analyzed the long-term relationship between consumption of renewable and non-renewable and economic development and pollution during the period 1980-2010. After a selection process, for Spain we have used to measure growth the GDP and the Gross Capital Formation; to measure development, the Index of Human Development and Social Capital; for pollution, the emissions of CO2 and consumption of renewable energy in the electricity system and oil consumption for the consumption of renewable and non-renewable, respectively. Secondly, we have compared the results obtained for the Spanish economy with the four biggest economies in the European Union: Germany, France, Italy and the United Kingdom. Given the availability of data for these countries Gross Capital Formation and Human Development Index have been excluded from the analysis. Results: First, a positive impact of consumption of renewable and renewable energy on growth and development is found for the five countries under study, with a greater impact of non-renewable energy. For the three countries for which the data for CO2 emissions are available (Spain, France and the UK), it is observed that the reducing effect of renewable energy on CO2 emissions is less than the polluting effect of non-renewable energy. Second, for Spain, Germany and France, the data point out a feedback process between the consumption of non-renewable and growth and development, which is not observed with the consumption of renewable energy. Conclusions: In order to reconcile the objective of growth with the reduction of pollution, more moderate growth rates are required. The growth model of the countries analyzed stimulates consumption of non-renewable energy, but not renewable. This result points out the requirement of designing policies that encourage the substitution of non-renewable energy by renewable energy. [ABSTRACT FROM AUTHOR]

Background: During the 18th century, a distinctive art style emerged, the Rococo, expression of frivolity and connoisseur taste, where little advances were made in the visual realm. The main objective of this paper is to present a theoretical model that relates royal patronage with artist's creativity. Methods: This paper presents a theoretical model on the interaction between artists and gallerists of the 18th century, and it allows to study the optimal level of creativity applied by artists to their works. Results: The model predicts a positive relationship between royal patronage and creativity. Conclusions: The death of King Louis XIV and the consequent reduction in royal patronage could explain the decline, documented by art historians, in the level of complexity of art works produced during the Rococo period. [ABSTRACT FROM AUTHOR]

Background: Regional Economics and Economic Growth focus on the question of whether trade leads to a greater concentration of economic activity. Nevertheless, little empirical work has assessed the impact of trade on regional convergence. Therefore, this paper studies the regional convergence that has occurred in Mexico since NAFTA came into effect. Unlike previous papers, working with municipal-level data allows us to both observe the convergence patterns across space more clearly and to identify the effect of NAFTA. Methods: A conditional β-convergence model and conditional club β-convergence model were performed. However, in contrast to previous empirical studies, we use municipal panel data to identify more clearly the relationship between trade and regional convergence, and include the 2009 economic census to observe whether, after fifteen years of NAFTA, the economy has decentralized away from Mexico City to the US border regions. Results: The result shows that after NAFTA came into effect, the convergence in regions near the US border grew faster than it did in those further from it. However, there is a significant reduction in the β coefficient after NAFTA, indicating a slowdown in the rate of convergence. Furthermore, we find that rather than becoming integrated into world markets, municipalities in the south have instead lagged behind their counterparts since the signing of NAFTA. Conclusions: Even though centrifugal forces are starting to function, there is a significant reduction in the β coefficient after NAFTA came into effect. This suggests that better policies will be needed in order to control the increase in regional disparities. [ABSTRACT FROM AUTHOR]

This paper studies competition in the market for credit cards in Mexico. It derives demand functions from a discrete choice model, and interest rates from an imperfect competition model, in both cases with differentiated products. These functions are estimated using panel data with 23 credit limit segments and 18 issuing banks between June 2011 and June 2015. The results indicate that there is imperfect competition with differentiated products, and that cards are closer substitutes when they belong to similar segments. Also, they reveal that interest rates respond to costs, although they also reflect supra-competitive margins. The analysis associates market power with the age of the account, which suggests possible information asymmetries and/or switching costs. In general, lower credit limits have higher rates, but also higher costs and lower margins. The results also contribute to assess potential effects of mergers between issuing banks. Finally, the paper presents some policy recommendations based on this evidence. [ABSTRACT FROM AUTHOR]

Background: The effects that the expansion of the Seguro Popular (sp), Mexico's universal--according to the government--health insurance program, has had on the human and material resources needed to meet the new demand remain largely unexplored. It is a key piece in the quest for universal healthcare that we analyze in this paper. Methodology: Unlike previous evaluations, we use sanitary jurisdictions as units of analysis and operationalize sp's intervention as a continuous treatment indicator (relative to the number of recipients). Results: Estimates using a variety of propensity score approaches suggest that, on the average, sp effectively has had a positive impact on Mexico's health resources. However, quantile and interaction treatment effects also suggest unexpected distributional effects on health resources. Conclusions: Overall, our results suggest that the program may be leaving behind some of the most vulnerable geographical areas. [ABSTRACT FROM AUTHOR]

Background: The literature on fiscal theory and policy has shown evidence regarding the procyclical stance of public spending in relation to the economic cycle in developing countries, and particularly in the case of Latin American economies. This paper studies the relationship of budget spending and the economic cycle in Mexico for the 1980-2016 period, it seeks to clarify whether the shift in fiscal policy can be characterized as a tendency towards an anticyclical stance. Methodology: To analyze the quarterly seasonally adjusted series of budget expenditure and gdp (at constant 2008 prices), their cyclical components were estimated using the Hodrick-Prescott filter. To explain the cycle of expenditure through the product cycle, a regression was estimated with Markov regime changes in which the state probabilities vary according to the volatility of the product. Subsequently, the time-varying volatilities of both series were estimated as well as their dynamic conditional correlations and the latter were analyzed based on the economic cycle. Results: The evidence is consistent with an expenditure policy that has been both procyclical and counter-cyclical at different times of the period under study, as the previous literature has shown, but in recent years there has been a notable decrease in the emphasis of the procyclicality of the budget public expenditure, which even suggests that fiscal policy has become acyclical. Conclusions: Unless the policy makers act towards other direction, fiscal policy can be expected to remain acyclical and, therefore, budgetary spending will continue to have non significant impact on the management of the Mexican economy cycle. [ABSTRACT FROM AUTHOR]

Background: Insecurity is one of the scourges that most concern the inhabitants of Latin America, where violence and lack of security make it one of the most insecure regions in the world. Buenos Aires (Argentina) is not an exception to this phenomenon, given that its recent statistics show a growing trend of crimes against people. Poverty can provoke a greater virulence of crime, but the latter also entails social and economic costs that negatively impact welfare and poverty. This paper addresses this second relationship based on the study of changes in the urban configuration and its consequent impact on the welfare of households and firms due to the increase in crime in the city of Buenos Aires. Methodology: A computational general equilibrium model (cge) with urban characteristics for Argentina was developed in 2011 in order to measure welfare changes, generated by the crime and the costs it generates on the real estate market. As real estate prices were the transmission mechanism between crime and welfare, elasticities were estimated between crime and the price of housing based on a hedonic econometric model. Results: Assuming a 10% increase in the crime rate, the prices of real estate in the relatively richer North of the city can fall to 4%, while they fall less than 1% in the South region. The net effect is a significant drop in the average value of real estate in the city, given that the North is where the most expensive properties are concentrated. These asymmetric results between zones of the city are also observed in the results of household welfare, reducing 8% in the North and 1% in the South. These results on property prices and households welfare induce the relocation of households to the South and of firms to the North, which alters the initial urban configuration. The results correspond with the findings for other cities in South America. Conclusions: An increase in crime in the city of Buenos Aires generates non-negligible welfare costs for families, which produces incentives for the relocation not only of families but also of firms. Consequently, the crime does not turn out to be neutral for the urban and regional configuration, given the interactions between the city of Buenos Aires and the rest of the country. Conclusions such as quantitative results are useful for the design of public policies related to local security and its impact on urban configuration. [ABSTRACT FROM AUTHOR]

Background: The question regarding whether the performance of children depends on the results obtained by their parents has become an important object of study for the economic science in recent years (Fields y Ok, 1999; Jäntti y Jenkins, 2013). This paper aims to provide original evidence about intergenerational social mobility (ism) measured through earnings in Uruguay. Methodology: The intergenerational elasticity on earnings (ige) and the intergenerational rank association (ira) are estimated with two sample two step least square (2S2SLS). This estimator is usually used in those countries that do not have longitudinal information. In addition, with the application of transition matrices and quantile regression approach, nonlinearities in ism are studied. Results: The findings locate Uruguay within the group of Latin American countries with high ism, measured through earnings, along with Argentina and Chile. However, this level is low in comparison with the developed European countries, particularly the Scandinavian. In addition, the lowest levels of ism are found in the tail of the distribution. Conclusions: Results suggest that people who are born in low-income households have greater difficulties in achieving upward ism. On the other hand, people who are born in high-income households have a low probability of suffering downward ism. [ABSTRACT FROM AUTHOR]

Background: From the perspective of institutional theory, this paper studies the relation between the abilities of family-member CEOS and the financial performance of listed family companies, in a setting of formal institutional weakness. Methodology: The study sample is composed of non-financial family firms listed in the Mexican Stock Exchange during the 2001-2014 period. Econometric analysis is attained through linear models for panel data, estimated by ordinary least squares (ols). To take into account endogeneity concerns, regressions are run through the generalized method of moments (gmm). Results: The results obtained indicate that better corporate financial outcomes are achieved with external CEOS than with family-member CEOS, even when their abilities, in terms of experience and academic background, are similar. The inverse relation found between family-member CEOS and financial performance was moderated when the CEOS had a high business-related academic background, thus acquiring the skills and greater perspective needed to cope with the higher transaction costs and increased business risks present in environments of formal institutional weakness as is the case in Mexico. Conclusions: In a context of formal institutional weakness, investment in businessrelated higher education --of high quality, and in one's own country-- is a good long-term strategy for family businesses that wish to promote a family-member CEO. [ABSTRACT FROM AUTHOR]

Background: This paper studies the behavior of book prices resulting from the approval of the Law for Promotion of Reading and the Book. The law became official in July 2008. Methodology: We surveyed the literature related with the topic and analyzed the statistical evidence before and after the law came into effect. Results: The evidence is consistent with the commitment theory. The regime of resale price maintenance imposed by law allowed the upstream monopolist (editor) to extend its monopoly power to the downstream market. Conclusions: We conclude that the law changed the price fixation process in the sale of books by increasing the inflation on books at a higher rate in comparison with the inflation that would have been observed in the absence of the law. [ABSTRACT FROM AUTHOR]

Background: In the last seven years, the Spanish economy has been struggling to reduce the ratio of public deficit-GDP from 11.1 percent in 2009 to 3 percent. This value is a commitment recorded in the Stability and Growth Pact signed by eu members and it has been determining the economic policies implemented by the Spanish Government since 2010. The aim of the paper is to evaluate the costs of a decline in 1.5 pp the ratio of public deficit-GDP on the main macroeconomic variables with alternative fiscal policies. Methodology: The model used is a static disaggregated Computable General Equilibrium model that includes all the elements needed to evaluate the short run effects of fiscal policies aimed to reduce public deficit. This model captures the circular fl ow of income and accounts for households corporations, government and the foreign sector. Results: The results suggest that the decline of public spending on investment, public administrations and social services has less harmful effects on the economy than the increase of vat and personal income tax rates. Conclusions: Despite these results, it is important to take into account that the long run effects of declining public investment and social services are not included in the model. [ABSTRACT FROM AUTHOR]

Background: Pollution related to transport in big cities in Latin America and its impact on human health, and time loss due to congestion amongst other externalities are a growing concern. There are many analyses exploring this relationship at the macro and meso-levels. However, there are very few studies examining this relationship at the micro-economic level, less so in cities of developing countries. Methodology: We run a linear, quadratic and cubic ordinary least squares regression between income and three pollutants: carbon monoxide (CO), nitrogen oxides (NOx) and carbon dioxide (CO2eq) for a representative sample of 10 582 households within Mexico City Metropolitan Area (zmvm) from 2010, 2012 and 2014. Results: The paper shows a monotonic relation (positively linear) for CO and CO2eq and quadratic (inverted U-shape) for NOx, the least abundant of the three pollutants. Conclusions: Evidence shows that even at levels of income above the turning point observed in the literature, richer households still do not choose to internalize the social cost of polluting, therefore it is urgent to design public policies aimed at a switch in ways of transport. [ABSTRACT FROM AUTHOR]

The main goal of this paper is to detect an asymmetric behaviour in the management of the European Central Bank (ECB) since the beginning of its mandate until 2014. The methodology used is twofold. This paper estimates by the generalized method of moments (GMM) an optimal monetary policy rule and a rule including dummy variables which can detect the presence of asymmetries. The crisis in the euro-zone and the liquidity problems caused the implementation of nonconventional policy measures from 2008. Our results show a) asymmetries in the interest rate-setting behaviour of ECB and b) changes in the monetary policy decisions to enhance economic growth. [ABSTRACT FROM AUTHOR]

This paper analyses the effect of the increase in female employment on income distribution in Uruguay between 1991 and 2012. In particular, this paper studies the impact on inequality and poverty. The methodology employed is a micro-decomposition proposed by Bourguignon et al. (1998). This methodology allows to partially capture the effect of the increase on female employment and to distinguish between effects generated by changes in employment status and those produced by changes in worked hours. Results suggest that, the increase in female employment has had statistically significant effects, despite not being the most important when it comes to explaining the evolution of income distribution. Changes in female employment contributed to reducing poverty levels throughout the period studied and, although it had modest results on de concentration of income at the beginning of the period, effects were more pronounced towards the end. [ABSTRACT FROM AUTHOR]

This paper analyzes the effect of the North American Free Trade Agreement (NAFTA) on Mexican manufacturing price cost margins (PCMs) for the period 1994-2003. Taking into account the sensitivity of each industry to the speed of the tariff reductions under NAFTA, the results show that PCMs immediately decreased once the second round of trade liberalization in Mexico had commenced in 1994. However, in subsequent years, no clear pattern emerges for these PCMs. Additionally, the paper accounts for the sensitivity of each industry to the initial level of its tariff and presents evidence showing that while NAFTA had an effect on the PCMs of the group of industries that liberalized in 10 years, no robust effect was found for the group of industries that liberalized in five years. [ABSTRACT FROM AUTHOR]

Background: Daylight saving time (DST) has been actively used as a mechanism for energy conservation and reduction of greenhouse gas emissions. In the case of Argentina, the most recent experiences with DST occurred during the austral summer periods of 2007-2008 and 2008-2009, when the policy was finally abandoned. However, the benefits of DST and the size of the (potential) energy savings are still part of an ongoing discussion in a country where energy subsidies imply a heavy fiscal burden. Methodology: Using a difference-in-differences framework that exploits the quasi- experimental nature of the program implementation, we use hourly data for the 2005-2010 period at the province level and estimate the impact of DST on electricity consumption and on peak demand. Results: The application of DST increased total electricity consumption between 0.4% and 0.6%, but decreased aggregate national peak demand between 2.4% and 2.9%. In monetary terms, DST represented extra generation costs of 10.9 and 18 million USD during summers 2007-2008 and 2008-2009, respectively. Finally, the application of DST increased the emissions of air pollutants during those periods. Conclusion: The rationale for DST is questionable. The policy outcomes in terms of energy consumption and energy peak demand seem to go in opposite directions, at least in the latest experience in Argentina. A case-by-case study is the safest way of proceeding, and this paper is a piece of evidence that contributes to an open debate. [ABSTRACT FROM AUTHOR]

Background: In Mexico, women obtain a lower wage than men on average. A potential cause of this gender pay gap is discrimination, but, in this paper, we show there are other channels that contribute to such gap. Methodology: We implement a laboratory experiment with 404 individuals in which they play the ultimatum game and a wage bargaining game. The experiment contains three stages: an anonymous stage, a stage where we reveal the opponent's photograph, and a final face-to-face phase. We estimate gender differences in bargaining preferences. Results: First, we find no gender differences in the amount proposers send to respondents in both types of games. Second, gender matters in the bargaining process. When participants know their opponent's gender, women show "solidarity" to other women in terms of higher wage proposals. Third, women reject less offers than men, especially in the ultimatum game. Lastly, in the wage bargaining game, women counteroffer less than men, and men are more aggressive in terms of counteroffers against firms headed by women. Conclusions: Gender stereotyping can explain our results. Such stereotypes may define how each gender should behave in different social situations, or, for instance, how we perceive women in positions of power. Hence, results are relevant for public policies that enhance social norms related to gender equity. other women in terms of higher wage proposals. Third, women reject less offers than men, especially in the ultimatum game. Lastly, in the wage bargaining game, women counteroffer less than men, and men are more aggressive in terms of counteroffers against firms headed by women. Conclusions: Gender stereotyping can explain our results. Such stereotypes may define how each gender should behave in different social situations, or, for instance, how we perceive women in positions of power. Hence, results are relevant for public policies that enhance social norms related to gender equity. [ABSTRACT FROM AUTHOR]

Background: The Global Value Chain (GVC) is a recurrent approach to analyse the changes in the production geography in the auto-parts industry. Attending to GVC, certain regions have the decision power to coordinate the productive and technological innovation. This spatial model is dynamic and it is thus possible to modify the initial status of a region within GVC. This paper aims to analyse the keys in the evolution of Mexico in the auto-parts sector from the GVC perspective, focusing on the development of home companies and the role of institutions. Methodology: The methodology combines a qualitative and quantitative analysis to compare key variables from domestic firms and institutions belonging to a Mexican region (el Bajío) and a Spanish region with an intermediate status in the GVC (North-west region). Results: The multinationalization degree of Mexican companies, understood as the presence of leading domestic multinationals in the industry, is lower than in the Spanish region. Furthermore, Mexican domestic companies' show activities with lower added value and complexity, and they are mostly simple suppliers of components or raw materials and therefore are not in the first levels of supply within the GVC. This reduces the technological innovation and it causes a scarce diversification of knowledge in the Mexican region, with competencies and capabilities comparatively simpler than in the Spanish one. Conclusions: The multinationalization and the technological innovation capacity of domestic companies are a key for Mexico to evolve within the automobile GVC. Regarding institutions, the improvement of some innovation infrastructures in terms of performance, and a better definition of public policies towards the multinationalization and the promotion of technological innovation in domestic companies can favour the evolution of Mexico within the GVC. [ABSTRACT FROM AUTHOR]

Background: Following Kaldor (1978) and Thirlwall (1979), McCombie (1985) advanced a foreign trade super-multiplier that positively influences other components of aggregate demand of a Balance-of-Payments constrained economy. In this paper, it is shown that net capital stock also exerts a super-multiplier effect, which, contrary to the exports multiplier, happens to be independent from the income elasticity of the demand for imports. Methods: A theoretical model is here presented where given the exports and net capital stock levels, the income level is adjusted to get trade balance equilibrium. We carried out econometric estimations using a fixed effect model and unbalanced panel data to compute the elasticities of both GDP and production for the do-mestic market vis-à-vis exports and the net capital stock. Our estimations are based on data from six Latin American countries for the period 1951-2015 and the sub-periods prior and after economic liberalization. Results: The elasticities of both GDP and production for the domestic market vis-àvis the net capital stock proved to be higher than the said elasticities with respect to exports. Conclusions: Capital accumulation can positively affect the trade balance through economic capacity building and import substitution. Capital accumulation imparts a super-multiplier effect; as Hicks (1950) had pointed out, it makes space for aggregate demand to increase regardless the value of the income elasticity of the demand for imports. McCombie's foreign trade super-multiplier is valid if and only if the income elasticity of total absorption of goods and services is lower than one. Yet, if such elasticity happens to be higher than one, an increase in exports will call for a reduction of the aggregate demand components other than exports so as to preserve the Balance of Payments dynamic equilibrium. [ABSTRACT FROM AUTHOR]

Introduction: This paper examines the relationship between energy use (ENU) and gross capital formation (GCF) with the gross domestic product (GDP) growth rate in 73 countries. Countries are grouped according to the World Bank classification on income: high (30 countries), medium high (21 countries) and medium low (22 countries). Countries with a low income level are excluded due to insufficient data. The reason why the GCF is included is to study how it influences jointly with the ENU in the GDP growth since the GCF considers machinery and capital goods that require energy. Methods: Unit root and cointegration tests of panel data are performed, as well as estimates of fully modified ordinary least squares and dynamic ordinary least squares of data panel. Results: The empirical findings are that GDP growth is explained by ENU and GCF in the short and long run, except for the medium-high income group in which in the short run the ENU is not significant while the GCF is. Also, in all groups, in the long run, the GCF is explained by both GDP growth and ENU. It is highlighted that in all groups, in the short run, there is no causal relationship between ENU and GCF. Surprisingly, economies with high and low income have similar results. Finally, economic growth has an unidirectional relationship toward UEN and BCF, while in the long run there is no relation. In contrast, for non-oil-producing countries, in the short and long term, GDP growth has an bidirectional relationship with GCF. However, in the short run only the ENU is explained by economic growth. Conclusions: The various short and long-term relationships between ENU, GCF and economic growth that were empirically obtained provide substantial elements to energy policy designers of 73 countries. [ABSTRACT FROM AUTHOR]

Background: Considering the uncertainty of Mexican families about their future income and grand expectations on financial inclusion policies in the country, consumption studies continue to be important. Studying household savings and credit patterns is a fundamental key to financial development. Methods: This paper uses a synthetic panel to provide a semi-parametric estimation of savings and debt patterns over life cycle. Result: It shows that the beginning of family life mainly depends on credit, while at the end, there is a high monetary saving profile, sustained and different from the reduction predicted by the life cycle model. Human capital and income explain most of differences between families' financial patterns. Conclusions: Results show persistence of inequalities in the financing process; financial literacy and saving incentives should be main goals for the country's inclusion strategy. [ABSTRACT FROM AUTHOR]

Background: This paper studies the effect of the variability in fiscal revenues (induced by volatility in natural resource prices) on public saving in the case of natural resource dependent economies. Methodology: A theoretical model is used to extend the work of Van der Ploeg and Venables (2011). Later, an econometric analysis is performed with data from panels of two different data samples. We find evidence in favor of the hypothesis. Results: It is found that the greater the variance in fiscal revenues the greater should be the level of net fiscal assets, due to precautionary saving. Conclusions: The volatility of fiscal revenues in countries exposed to commodities leads governments to precautionary savings and to have higher levels of fiscal savings. [ABSTRACT FROM AUTHOR]

Background: The Social Infrastructure Fund (FAIS), created since 1998, is a conditional transfer distributed by the Mexican federal government between state and municipal governments to reduce poverty. The assignation formula used until 2013, distributed the Fund according to the relative poverty of each state in relation to the national poverty. This design did not generate the appropriate incentives to reduce poverty. Methods: Based on a principal-agent model, and explicitly acknowledging the informational asymmetry between the federal and sub national levels of government, in this paper we propose a formula to assign the Fund, which has two fundamental characteristics: the FAIS is distributed using the relative poverty of states / municipalities; and includes a component to avoid the perverse incentive of the formula used until 2013. Results: A mechanism is designed and used as the theoretical basis to construct a formula to assign the transfer. Conclusions: In order to achieve the proposed impact of the governmental programs financed with federal transfers, it is important to design and implement the mechanisms to align the incentives of the different governmental levels. [ABSTRACT FROM AUTHOR]

Background: The use of derivative instruments, as corporate policy to hedge financial risks has a positive impact on the firm value. However, in countries characterized by weak legal protection of the investor's rights and ownership structures highly concentrated, like in Chile, majority shareholders could use this policy to extract wealth from minority shareholders. Methods: Using the Generalized Method of Moments (GMM), this paper analyzes a panel of 133 nonfinancial companies listed on the Santiago de Chile Stock Exchange between 2008 and 2013. Results: The results indicate a positive and statistically significant relationship between the amount of derivatives used and the company value. However, this evidence is conditioned when the majority shareholder (s) keep the control of the company. If the main shareholder or the three major shareholders hold more than 67% of the outstanding shares, then the relationship between the amount of derivatives used and firm value is negative. Conclusion: In analyzing the dynamics between the ownership concentration and the use of derivatives, we findout that when the majority shareholders and the three largest shareholders majority quorum to vote, then they use derivatives to protect their own wealth. Such strategy is negatively assessed by market, providing evidence of the wealth redistribution hypothesis between the controllers and the minority shareholders. [ABSTRACT FROM AUTHOR]

Background: There is a wide difference in the total cost of cash advances offered in Chile. A little knowledge of the total cost of cash advances indicates a vulnerable consumer who may be unable to be aware of when and which financial institution to acquire a cash advance. Methods: This paper seeks to determine the characteristics of consumers and financial institutions that may be related to a greater or lesser knowledge of the total cost paid in cash advances. Results: The results of a hierarchical logistic regression shows that low knowledge of the total cost paid in a cash advance is associated with segments of consumers who do not use the total cost of cash advance as a signal of quality, older consumers, women and those who are not customers of the financial institution that offers the cash advance. The results also suggest that price advertising is effective only for consumers with a low use of the total cost as signal of quality (interaction effect). The other variables examined were not significant. Conclusions: This article shows that poor knowledge of the total cost paid in cash advances is not homogeneous between consumers and the financial institutions that offer these cash advances. [ABSTRACT FROM AUTHOR]

Background: In Mexico, to help control the epidemic of overweight and obesity an integral strategy that incorporate a tax on sugar sweetened beverages and a group of food with high caloric content, including snacks was implemented since January 2014. In this paper we analyze how prices of snacks behaved after the tax and we estimate the potential impact of the price increase in the consumption. Methods: For the price analysis we apply a model for panel data with three scenarios and an interrupted time-series model. For estimating the potential impact of the prices increase in the consumption we develop scenarios on elasticity and tax rate. We use public information from INEGI for both analysis. Results: From the price analysis, results indicate that the industry transferred the tax to prices of snacks completely. Likewise results show that the tax enforced from 2014 to 2016 generated a moderate reduction in consumption. Estimates of the potential impact in the consumption indicate that a higher tax rate would generate bigger decreases in consumption and that the tax would be more effective if the demand of the snacks is elastic. Conclusions: Results provide information to reconsider the tax rate and alert about the need to evaluate the strategy as a whole. [ABSTRACT FROM AUTHOR]

Wide concern between academics and policy makers in several countries has long existed on the question of whether individuals are saving enough for their retirement phase. Empirical evidence for developed countries, as well as the little evidence available for developing nations, shows that this is not the case. This paper provides a review of the theoretical literature on the topic, particularly on the Life- Cycle Model, as well as further approaches that contribute to explain this phenomenon. Special emphasis is given to the Mexican case, providing the small amount of evidence available about retirement savings of Mexicans and showing that, in general, it is not adequate. Finally, the paper concludes with some considerations, useful for public policy that will address this problem. [ABSTRACT FROM AUTHOR]

New Economic Geography (NEG) focuses on the question of whether trade leads to a greater concentration of economic activity. Little empirical work has been done on assessing the regional distribution of the impact of trade. Therefore, this paper looks at the regional distribution in Mexico of the benefits from trade after NAFTA. Unlike previous papers, this study works with municipal-level data, which not only makes it possible to observe the growth patterns across space more clearly but also to identify the effect of NAFTA. The results show that after NAFTA, output per worker in regions near the Mexico-U.S. border grew faster than that in those further away. Furthermore, the trade agreement increased inequality, implying trade increased economic concentration by causing cities to grow faster than other regions. Similarly, regions with a more literate workforce were better able to benefit from NAFTA, growing faster than other areas after the trade agreement. [ABSTRACT FROM AUTHOR]

In this paper we obtain expressions for both the tax benefit of debt and the return on equity, when the company and the debt grow, under the non-integrated tax system prevailing in the USA. Then we develop the equivalent expressions under a totally integrated tax system. The main contribution of this paper is the extension and generalization of the company valuation and cost of equity formulas to a tax system different to the one used in the USA, but prevailing in many other countries in the world. [ABSTRACT FROM AUTHOR]

Background: Poverty remains one of the major international challenges as reflected in the commitments adopted by the United Nations in the 2030 Agenda. In order to fight against it, international development agencies have fostered decentralization reforms that have been applied throughout the world. This means that, the analysis of the effects of fiscal decentralization on poverty has become a research area of extraordinary academic interest, but one that has produced conflicting findings. This paper aims to analyse the effect on poverty of fiscal decentralization of spending in education, health, housing, and social protection. Methods: We estimate a fixed effect model by Feasible Generalized Least Square (FGLS) using unbalanced panel data of countries. Results: The decentralization of spending has a differentiated effect on poverty: the decentralization of health and housing policies contributes to reduce poverty, while the decentralization of social protection spending stimulates an increase in poverty. Conclusions: The hypothesis of the classical theory on decentralization is endorsed in the areas of health and housing. On the other hand, the prediction of the normative theory of the public economy is ratified in the area of the social protection. So, for each country, which social policies to decentralize and the allocation of resources among jurisdictions should be analysed with great detail to avoid problems of targeting strategy, accountability and responsibility assignments. [ABSTRACT FROM AUTHOR]

Background: Using standard fiscal incidence analysis and the new methodological developments by the Commitment to Equity (CEQ) Institute, this paper estimates the impact of fiscal policy on inequality and poverty in sixteen countries in Latin America around 2010. Methods: With information on incomes, consumption, and other dimensions available in household surveys, and knowledge about the characteristics of the fiscal system, the CEQ method consists in allocating to each individual the burden of personal income and consumption taxes, and the benefits from cash transfers, consumption subsidies, and government spending on education and health. This process yields the pre-fiscal and post-fiscal income concepts of interest. These income concepts, in turn, are used to calculate the corresponding indicators of inequality and poverty. Thus, one can estimate, for each country, the impact of the fiscal system and each of its components on inequality and poverty. Since the methodology that was applied is the same, results are comparable across countries. Results: The countries that redistribute the most are Argentina, Brazil, Costa Rica, and Uruguay. Guatemala, Honduras, and Peru are the countries that redistribute the least. Fiscal policy reduces extreme (income) poverty in twelve out of the sixteen countries. The incidence of poverty after taxes, subsidies, and cash transfers, however, is higher than market income poverty in Bolivia, Guatemala, Honduras, and Nicaragua, even though fiscal policy reduces inequality in these four countries. Contributory pensions have a heterogeneous effect on inequality and, contrary to some expectations, their impact is equalizing in nine of the countries. In the sixteen countries, spending on pre-school and primary education is equalizing and pro-poor (per capita benefits decline with income per capita). Spending on secondary education is always equalizing; it is also pro-poor in some of the countries. Spending on tertiary education is never pro-poor but it is equalizing in all the countries except for Guatemala. Spending on health is always equalizing but pro-poor only in some countries. Conclusions: Latin America presents a great deal of heterogeneity in the size of the state and the countries' capacity to use their fiscal power to reduce inequality and poverty. A higher share of social spending (to GDP) is associated with a larger redistributive effect but countries with similar, or even lower, shares of social spending show heterogeneous redistributive effects implying that other factors beyond size such as the composition and targeting of social spending (and taxes) are at play. It is important to emphasize that a higher redistributive effect is not necessarily a desirable outcome since in this article there is no estimation of the impact of redistributive policy on fiscal sustainability and efficiency. In some countries, the burden of consumption taxes is such that a portion of the poor are net payers into the fiscal system (before receiving "in kind" transfers in education and health). Governments should examine whether this undesirable effect could be avoided, or at least reduced, through an expansion of targeted cash transfers and/or reduction in the consumption taxes that are particularly burdensome for the poor. [ABSTRACT FROM AUTHOR]

Background: Longevity risk, defined as the possibility of people outliving its expected life span, hurts pension systems because it implies a potential underestimation of reserves kept in order to fulfill future liabilities. Nevertheless, this has a positive connotation for life insurers, given that these companies may face a deferral in their liabilities when people live longer than expected. Methods: In this research paper, a longevity swap is proposed as an alternative to manage longevity risk, using the natural hedge arising from opposite positions regarding the same risk. In order to apply it to the management of the longevity risk faced by Mexico's federal government, some changes were made in the general framework used to construct and value this kind of derivatives, adding a proportional longevity index and a monetization variable. Results: These modifications give the referred framework a wider scope; e.g., it can be applied to systems with growing number of pensioners, as the one created by the Mexican reform of 1997. Furthermore, a 50 year longevity swap between the Mexican government and a syndicate of life insurers and reinsurers is proposed, analyzed, and simulated and an ex post cost of 1.6 billon of 2017 pesos for the federal government is estimated. Conclusions: Protection provided to the Mexican government by the proposed longevity swap is remarkable. However, its cost has to be considered, as it is biased by the expected longevity behavior. [ABSTRACT FROM AUTHOR]

Background: This paper presents new evidence of the inequality possibility frontier and the inequality extraction ratio (the percentage of total inequality that was extracted by global elites) of Latin America (LA) in the last two decades. Moreover, we explore the relevance of the inequality extraction ratio (IER) in the analysis of social conflict, institutional instability and corruption. Methods: Estimation of IER and Gini index for 18 Latin American countries in the period 1990-2013, using household surveys. Estimation of multivariate econometric models with fixed effects to analyze the relationship between income distribution and indicators of social conflict. Results: AL improves two positions in the ranking of global inequality using the IER instead of Gini index. Within Latin America there is a process of convergence in levels of inequality, but the two measures evolve differently: while the Gini index increases in the 90s and decreases in the 2000s, the IER decreases throughout the entire period. In addition, we found a positive association between IER and social conflict. Conclusions: Using the IER, LA is not as unequal as with the Gini index. Moreover, countries in LA with high rates of IER are more likely to have high levels of social conflict. [ABSTRACT FROM AUTHOR]

Background: In recent years many countries have made substantial investments in One Laptop per Child (OLPC) programs, while others are about to start implementing this type of interventions. This paper contributes to the study of the effect of OLPC programs on students reading and math scores using a quasiexperimental design and data from Uruguay, the first country to implement an OLPC program at a national scale: Plan CEIBAL. Methods: We use a difference-in-difference strategy (DiD) to estimate the impact of Plan CEIBAL on educational achievement. The analysis exploits the fact that the rollover of the program was based on geographic criteria and not on students' school performance. The exact date at which each student received the laptop is available. This gives us the ability to calculate with no error a continuous measure of treatment as the number of days that each student has been exposed to the program by the time of the follow-up date (normalized to years). We control for potential systematic differences in school improvement over time between schools in Montevideo (the capital of Uruguay) and the rest of Uruguay. Results: Our findings suggest that the program did not have an impact on reading and math scores. We also do not find heterogeneous effects across children with different mother's education. When analyzing descriptive data on the frequency of laptop use during class, we observe that every-day use of laptops in class is not widespread across all public schools. Besides, laptops' main use in class is to search for information in the internet rather than for training using drills and exercises. A particularly important feature of the program is that teacher training has been, up to now, optional. Conclusions: Our results suggest that in the first two years of its implementation Plan CEIBAL had no effects on math or reading scores. [ABSTRACT FROM AUTHOR]

This paper presents a novel monthly dataset of job vacancies in Bogota between 1960 and 2010. The dataset was constructed by counting the number of help-wanted announcements published in the most important newspaper with national circulation- namely, El Tiempo. We describe the methodology used to construct the database, discuss some possible problems associated with it, and propose ways to solve them. The paper also presents an estimation of the job vacancy rate. We depict a Beveridge curve and use the vacancy rate to forecast unemployment. This first look at the series yields sensible results, while leaving a myriad of open questions for future research. [ABSTRACT FROM AUTHOR]

This paper analyzes central banks' role in banking crises in Latin America. It finds that, except in a handful of cases, where bank resolution was timely executed, central bank money was used in large scale to contain and manage systemic and small crises alike. However, pouring money into the financial system tended to fuel macroeconomic unrest and increased the chances of currency crises, in particular in emerging market countries. While subject to some caveats, the conclusions of this paper are relevant and should be taken by developing countries as a warning against excessively expanding central banks' balance sheets to cope with financial crises, as several industrial countries have done it recently. [ABSTRACT FROM AUTHOR]

Background: The creation of the Transatlantic Trade and Investment Partnership (TTIP), that the United States (US) and the European Union (EU) are currently negotiating, will have a major impact on world trade, especially in third-country economies with greater dependence on any of the signatoring countries, as it is the case of Mexico. Methods: This paper analyses the effects of this trade agreement on the exports of the Mexican manufacturing sectors through the application of a model of multiple gravity equations in two possible scenarios (ambitious and limited TTIP). Results: Findings show significant drops of Mexican manufacturing exports and a weakening of its role in the global value chains, especially in those sectors where the EU has significant competitive advantages in its trade with the US. Furthermore, the estimated impacts show that the trade diversion effects would be particularly relevant in those industries with high dependence on exports to the US market, such as machinery and transport equipments. Conclusions: The update of the trade agreements between Mexico and the US and the EU could mitigate the potential negative effects of TTIP, provided that this update leads to an approximation to the standards set for European exports in this new agreement. [ABSTRACT FROM AUTHOR]

The international financial crisis of 2008-09 exposed the strengths and weaknesses of the current paradigm of development in Latina America, a paradigm based on liberalized capital accounts and significantly improved macroeconomic conditions. This paper presents lessons derived from the crisis, not only for the region it self, but also for other developing countries that might seek economic growth in the context of greater integration to the international capital markets. Some of the lessons are not new but have been reinforced by the crisis, such as Latin America's imperative need for export diversification (not only in products but in partners). Other lessons break with longstanding myths about the region, such as its inability to undertake counter-cyclical policies -at least on the monetary side. Yet other lessons reflect new developments in the current growth paradigm, such as a renewed assessment of (1) the relative roles of foreign and domestic banks in shielding the financial system against external shocks and (2) the potential costs of adopting blanket international financial regulations that do not account for a country's degree of development. Taken together, the lessons in this paper bring a new sense of optimism for growth in Latin America. [ABSTRACT FROM AUTHOR]

This paper estimates human capital externalities in Mexico using the traditional approaches in the literature. We control the potential endogenenity of individual and average schooling with instrumental variables techniques. We use as instruments, the educational reform of 1993 of compulsory secondary education and the proportion of graduates from upper secondary and higher education and the structure of the population of the states in a previous period. The results show that there is a strong positive and statistically significant relationship between experience, individual education and average education with individual wages. Also we confirmed by the implementation of the various approaches through the coincidence of the results that there are significant human capital externalities at state level in Mexico for the period 2000-2010. [ABSTRACT FROM AUTHOR]

This paper is aimed at developing a stochastic macroeconomic model useful to explain the effects of unexpected jumps in government spending per capita and in demographic variables on per capita economic growth. To do this, it is assumed that the stochastic dynamics of output and population are driven by mixed diffusion- jumps processes modulated by a Markov Chain. The most important results are that extreme sudden jumps in government spending per capita and in the population growth rate impact negatively the rate of per capita output growth. In particular, if there is a sudden sharp jump in the rate of population growth, then capital per capita suddenly decreases impacting negatively per capita output. Finally, the theoretical findings are supplemented with empirical evidence about the Mexican case obtained through a model that takes in account the volatility of the growth rates of the population and the per capita public expense as well as the surprises in the jump intensities of both variables. [ABSTRACT FROM AUTHOR]

Although Mexico had a significant increase in years of schooling in the last 20 years, the quality of its education system -an important determinant of long term growth- is far from being satisfactory. Using the results from the first standardized test in upper middle school (ENLACE MS), the paper shows that a model including household, personal, institutional, and school characteristics can account for more than 40 percent of the total differences observed in math scores. From a policy perspective, the paper's results suggest that education authorities interested in fostering education quality should concentrate in improving school infrastructure, the quality of its teachers and the relationship between students and school authorities. [ABSTRACT FROM AUTHOR]

The paper draws macroeconomic policy lessons by contrasting the developing countries experience in the 2000s -including their performance in the recent global crisis- with the previous three decades of financial globalization. The main lesson is the crucial role of macroeconomic policies in fostering growth, preserving financial stability and generating a robust performance vis-à-vis real and financial external shocks. In addition, the analysis suggests a set of policy orientations that contribute to the simultaneous achievement of the three mentioned objectives. The paper is presented in two parts. The first part presents the analysis that provides the foundations of the main lesson and the mentioned macroeconomic policy orientations. The second presents a synthetic formulation of the macroeconomic policies and discusses different aspects of their instrumentation, focusing particularly on the exchange rate and monetary policies. Concluding remarks are presented in the last section. [ABSTRACT FROM AUTHOR]

This paper uses the subjective well-being approach to value the personal cost of illnesses. The approach becomes an alternative to traditional valuation methodologies based on revealed and stated preferences. The paper shows that illnesses reduce health satisfaction, while income is positively related to it. Hence, it is possible to calculate the compensatory income which is required in the presence of an illness so as to keep health satisfaction constant. This computation is an estimate of the monetary valuation of the illness, and it can be interpreted as the monetary value of the benefits from programs which aim to correct or avoid health problems. The empirical illustration is based on data from representative surveys run in Costa Rica. The illustration values four diagnosed illnesses. [ABSTRACT FROM AUTHOR]

This paper develops a typology of corporate architecture and corporate governance in order to analyze the Mexican Business Groups. The typology helps under- stand: 1) the evolution of Mexican business networks towards a centralized coordination of the firms, and 2) how changes in some features of corporate governance have tended to preserve a state of few counterweights to the decisions of majority shareholders. Moreover, this paper presents a survey that provides a set of possible explanations for the formation and operation of Business Groups. This review helps assess the analytical advantages of a socioeconomic approach that conceives these business networks as a consequence of sociocultural, institutional, and economic factors, which provides a theoretical basis for understanding the historical persistence of this business system in Mexico and other countries. [ABSTRACT FROM AUTHOR]

This paper represents, to the best of our knowledge, the first attempt to bring together all of the biases affecting traditional timing models that have been identified in the literature. These biases are the cause of spurious coefficients and our aim is to propose certain corrective measures. The biases analysed in this paper are related with volatility timing, as well as return timing; the incorporation of public information; the dynamic trading effect; the options implied in timing activities; infrequent trading and the variations in market conditions. [ABSTRACT FROM AUTHOR]