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This paper proposes a methodology to estimate the parameters of the stochastic volatility model from Heston (1993) through quadratic loss functions, which minimize the error between market prices and theoretical prices. To do this, three classes of loss functions are stated, two of which correspond to prices and the other one to implied volatilities. The proposed methodology is applied to a set of option prices on AMX-L, WALMEX-V, and GMEXICO-B. The results indicate that for call options on AMX-L the generated implied volatilities are consistent with observed data under the criterion of the root of the mean quadratic error, while for call options on WALMEX-V and GMEXICO-B the generated implied volatilities are consistent with observed data under the criterion of the root of the mean quadratic relative error. [ABSTRACT FROM AUTHOR]

Since Tibbits published in 1931 a study on the relationship between the business cycle and the electorate results, the analysis of economic voting has been outlining a theory that explains the decision of the voters. In this paper we present a model of economic voting, in which voters are assumed to be risk-neutral and uncertain about the prospective economic situation of the country. The voter's decision is based upon an additively separable utility function, which has two elements: the prospective sociotropic evaluation and the ideological distance between the voter and the candidates. The voter's goal consists in choosing a candidate who maximizes the expected utility of his decision. By using a pooled data set from presidential elections that took place in Chile in 1993, 1999-2000 and 2005-2006, we conclude that both the electoral context as well as the leadership are the exogenous factors having the biggest impact over the electoral behavior. We also find that Chileans' economic voting is sophisticated, rational and heterogeneous. [ABSTRACT FROM AUTHOR]

Early 2012 the Organization for Economic Cooperation and Development (OECD) released a Review on Telecommunications Policy and Regulation in Mexico, which was heavily criticized by consultants of Mexico's incumbent telephone companies. The OCD answered the objections only formally, arguing that the study was performed according to established procedures and that it had been approved by all its member states. Last year El TRIMESTRE ECONóMICO dedicated a special issue to the unresolved controversy. Apart from publishing translations of two articles criticizing the Review, a few selected authors shed their light on the subject matter. The purpose of this paper is to show that the articles of El TRIMESTRE complicate matters unnecessarily and that the quantitative results of the Review are simply erroneous and inconsistent. To see that there is no need for sophisticated econometric exercises; just a revision of the figures, some rigor of analysis and a skeptical look at a partial-equilibrium graph are sufficient to make clear that the findings of the OECD are out of touch with reality. [ABSTRACT FROM AUTHOR]

The current global financial "non-system" is marked by instability. In the absence of global solutions, a series of regional arrangements of monetary cooperation have been emerging to cope with such instability. This paper focuses on regional payment systems as an initial step of regional monetary cooperation. In order to evaluate their potential contribution to increase macroeconomic stability of the member countries, we develop a typology of payments systems and systematically compare historic and present initiatives in Europe, Asia and Latin America with reference to the original Keynes Plan. We show that regional payment systems entail beneficial effects by reducing transaction costs of intra-regional trade, and by creating incentives for further macroeconomic cooperation. Their contribution to macroeconomic stabilization however depends on the specific design of the respective regional arrangement. [ABSTRACT FROM AUTHOR]

Contributory pension system coverage has been historically low. High mobility between formal and informal sector results in low contribution density which does not guarantee a minimum pension. The state has created cash transfer programs which can disincentive formality. This paper proposes a proportional pension for formal employees, which replaces the fixed cash transfer, following the experience of Chile (2008). We follow the Valdés-Prieto approach (2008), which minimizes labor- market distortions. Under the assumption of linear income trajectory, we show that the total value of pensions can increase in 45.6% on average, and fiscal savings in 14.8% when compared to a non-contributory pension programas "65 y más". [ABSTRACT FROM AUTHOR]

This paper defines and evaluates a new tax method based on the combination of a flat rate scheme and increasing personal allowances on the tax base which we refer to as the Discretionary Income Tax Method (DITM), and compares this to the traditional personal income tax based on progressive tax schedules. The results show that, from a theoretical perspective, our proposal is more progressive and social welfare enhancing. For the empirical validation of our results we carry out an exercise comparing the Spanish personal income tax (SPIT) with our tax method alternative (DITM). The results of our empirical exercise are in line with the theoretical predictions of the 'objective taxation' here described and derived from the comparison of the two tax methods. [ABSTRACT FROM AUTHOR]

The General Error Distribution (GED) has been extensively used in time series econometrics applications, due to its great flexibility in the estimation of financial stylized facts. However, there has been no attempt to employ this statistical distribution in the construction of copulas. Copulas are probability functions that link one multivariate distribution to univariate distribution functions called marginals. These marginals are continuous and follow a uniform behavior within [0,1]. In this paper we introduce the bivariate GED copula to investigate financial contagion in Latinamerica during the 2008 crisis. We examine contagion in foreign exchange, equity, bonds and sovereign markets in Latinamerica. Standard decision criteria provide strong evidence in favor of the GED copula, against other widely used elliptical and arquimidean alternatives. [ABSTRACT FROM AUTHOR]

The objective of this paper is to explore the spatial distribution of industries in the innovation sector in Mexico. Through the use of Explanatory Spatial Data Analysis (ESDA), we aim to present an original study in a spatial context, in which the empirical analysis considers recently available firm-level geo-referenced data, as well as data from the Economic Census of 2009. We use global and local spatial statistics in order to identify, quantify, and locate spatial clusters of firms and their employment composition. By doing so, we aim to show the existence of "botspot" areas with strong dynamics of innovation activities. The analysis identifies the most innovative regions based on seven spatial clusters of large-size establishments across the country distributed primarily in urban and metropolitan areas. This study contributes to a better understanding of the prevailing conditions of mnovation clusters in the country and may help in the design of specific innovation policies tailored to firm size and for specific sectors aiming to accelerate the regional innovation process. It also provides guidance to policymakers eager to promote the development of local economies and identify where regional innovation systems need to be developed, financed, and designed. [ABSTRACT FROM AUTHOR]

This research estimates intertemporal and uncompensated elasticity in Uruguay, which is a developing country with an early demographic transition. We applied the specifications and econometric techniques used in Pencavel (2002) to estimate the supply elasticity over the life cycle (intertemporal elasticity) and the labor supply responses to parametric changes in the wage profile (uncompensated elasticity). This paper assesses the gender gap in labor supply elasticities. This topic is relevant for a better understanding of recent changes in women decisions to participate in the labor market in Uruguay and because of the policy implications arising from the distinction between both elasticities. The results confirm differences in the magnitudes between intertemporal and uncompensated elasticities with a higher substitution effect for women. This study finds evidence of intergenerational changes in female labor supply elasticities. Finally, it finds no evidence of the "added worker effect" among female workers. [ABSTRACT FROM AUTHOR]

This paper analyzes the gender wage gap for recent graduates in formal jobs in Colombia emphasizing the role that degree subject plays in explaining the gender wage gap at early stages of the labour market experience. To conduct the analysis we took advantage of a unique dataset that contains administrative records for individuals observed in formal employment one year after graduation from college and that contains detailed information for degree subjects. The results suggest that, on average the wage gap against women is about 11%, from which 40% is explained by gender diferences in the type of degree chosen. By using a distributional gender wage gap decomposition we find evidence not only of an increasing gap at diferent levels of the wage distribution but evidence that only 30% of it is explained by degree subject. This result also supports the existence of a glass ceiling phenomenon from early stages of labour market experience which is of particular interest for policy makers given that, some of the explanations given to the glass ceiling efect are related to experience and promotions, characteristics that are not significantly diferent for recent graduates. [ABSTRACT FROM AUTHOR]

This paper introduces an indicator of consumers' inflation expectations based on data from the National Consumer Confidence Survey of Mexico, and tests its predictive power over CPI inflation and other measures of inflation that correspond to smaller baskets of consumer goods, for periods that range from 1 to 12 months. Our findings show that between January 2003 and September 2010, the predictive capability of the indicator over the different measures of inflation used was weak. Due to a modification in the survey questionnaire in October 2010, as of that date we observe a significant change in the responses and, thus, in the behavior of the indicator of consumers' inflation expectations. For this reason, from October 2010 on the main use of this indicator is to be a reference of consumers' confidence in price stability. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to analyze firms horizontal mergers sustainability in a quantity competition setting assuming both asymmetric information and profits transfers among firms. In such a context it is proved that a merger between two follower firms could be sustainable. Furthermore, it is proved that the minimal number of firms needed in order to guarantee the merger sustainability is lower under asymmetric information than under symmetric information. [ABSTRACT FROM AUTHOR]

This paper aims at modeling Afore's strategies which are addressed to retain the largest number of pensioners with different income levels in a cost competition setting. In doing so, we simulate a non-cooperative static two stages game to model competition between M⩾ leaders and N followers by using a generalized Nash-Cournot-Stackelberg equilibrium (GNCSE). The main findings state that: 1) competition among Afore is not only defined by an GNCSE (which performs well at explaining Afores performance for intermediate income levels); 2) when dealing with extreme income levels, it is advisable to analyze agents as price-fixing competitors -in low income ranks- or as non-price-quantity competitors -in high income ranks- instead of as quantity Stackelberg oligopolists; and 3) there is no a direct relationship between the number agents and pensioner's welfare in Mexico's Afore market. [ABSTRACT FROM AUTHOR]

The Carbon Kuznets Curve has been a widely explored and controversial topic in empiric environmental economics, mainly due to its straightforward implications to designing climate policy strategies. This paper is aimed to explore the relationship between carbon dioxide emissions and product for a set of Latin American and Caribbean countries using a semiparametric approach. Our results confirm that Carbon Kuznets Curve hypothesis does not holds in the region and offer some evidence in favor of a reallocation process of carbon emissions, verifying the haven pollution hypothesis on lower income countries. In this context, "wait and grow" is a totally unfeasible solution for environmental problems on Latin America and the Caribbean. Instead of this, an active climate policy is urgently needed in order to adapt and mitigate climate change effects on the region. [ABSTRACT FROM AUTHOR]

This paper presents the theoretical and operational criteria followed by El Consejo Nacional de Evaluación de la Política de Desarrollo Social (The National Council for Evaluation of the Social Development Policy, Coneval) to define the methodology for measuring multidimensional poverty. The multidimensional methodology was launched in 2009 and establishes the way in which poverty is officially identified and measured in Mexico. The methodology is illustrated with data for 2010 and 2012. This form of measurement has three characteristics that make it different from other methods. First, this approach uses a multidimensional method based on universal social rights. Second, unlike other theoretical-methodological paradigms for multidimensional poverty measurement that combine all dimensions into a single index, the identification of people in poverty, under this perspective, uses a bivariate Euclidian space measure. Income is evaluated on the first space, while a number of social deprivations are quantified on the second space. Third, the methodology classifies the population into different groups according to their poverty or vulnerable status, which helps to recommend differentiated public policy strategies and actions for each economic and social dimension. This allows more efficiency not only in targeting the poor but also in distributing social budgets. A fourth element, shared with other approaches, refers to the possibility of disaggregating the poverty measure for different groups of populations, such as, age, sex, ethnicity and territorial level. [ABSTRACT FROM AUTHOR]

This paper identifies and analyses the fundamental structural shocks that have explained the short run fluctuations of the Venezuelan economy in its recent history. For this purpose, we estimate a dynamic factor model (GDFM) with a panel of 115 variables and evaluate the effects of a monetary policy, a fiscal policy and an oil shock on their common component. These shocks are identified with the sign restriction methodology recently developed in the Structural VAR literature. We find that a monetary policy shock is not effective to modify economic activity, while an expansionary fiscal shock, financed with domestic debt, can increase household consumption and construction services, without affecting the aggregate production of the economy. Finally, an expansionary oil shock behaves identically as a positive aggregate supply shock. [ABSTRACT FROM AUTHOR]

This paper sheds new light on the observed income polarization process between Bogota and the rest of the departments in Colombia by pointing out the crucial role played by market access in avoiding departmental income disparities to be narrowed and, in so acting, as a penalty for the convergence process in income levels. Results from our econometric estimations with data for Colombian departments in the period 1975-2000 show that market access emerges as a key variable in explaining the spatial distribution of income in Colombia. [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]

One of the legacies of the financial crisis in the United States and Europe is the adoption of macroprudential policies in an increasing number of countries, including in Latin America. These policies aim to prevent future financial crises through the adoption of far-reaching reforms that involve changing the institutional framework for monetary and financial policies, using models and indicators to monitor the buildup of systemic risks, and utilizing instruments designed to prevent the materialization of those risks. The objective of this paper is to examine the institutional aspects of macroprudential policy in Latin America. In particular, it assesses the strengths and weaknesses of existing institutional models and offers suggestions to improve the effectiveness of those models. The analysis focuses on the two main institutional arrangements that exist in this region, the "Pacific" model which includes countries like Chile, Colombia, Peru, Costa Rica and Mexico, and the "Atlantic" model, which includes countries such as Argentina, Brazil and Uruguay. [ABSTRACT FROM AUTHOR]

In this paper we consider an extension of Vasicek's (1991) model for new consumer fixed-payment credits in the Chilean banking system. Under the assumption that the economy experienced a complete business cycle during 2003-09, we are able to compute the so-called Long-Run Probability of Default (LRPD) which is 14.4% if we consider the number of defaulted credits or 12.9% if we weight default frequencies by loan size. In the model we allow a time-variant threshold which is a function of both macroeconomic factors and average-characteristics of incoming debtors. Also, counterfactual exercises indicate that credit standards for loan applications were relaxed during 2006-07, implying an increment on defaults. [ABSTRACT FROM AUTHOR]

This paper estimates a GARCH-M model of inflation for Bolivia and investigates its linkages with resulting measures of inflation uncertainty. Utilizing a consumer price index constructed by combining six different official indices, the main findings are as follows: inflation and inflation uncertainty have both declined steadily since the late 1980s, when the hyperinflation period finally ended. For the period between 1937 and 2011 -- and for other sub-periods within 1937-2011 -- inflation has a significant and positive effect on uncertainty, supporting the hypothesis formulated separately by Friedman and Ball. An implication of this finding is that the Central Bank of Bolivia can achieve lower inflation uncertainty by lowering the inflation rate. [ABSTRACT FROM AUTHOR]

This paper analyzes the current debate on the effectiveness and impact of financial transaction taxes (FTT). Despite their regular use in several G-20 countries, there remain unexplained many aspects related to their impact on the stability of financial markets. Thus, although the academic literature tends to agree on the adverse effects of FTT on the trading volume and the value of financial assets, this is not the case in relation to their impact on short-term and long-term price volatility, the price discovery process, and the informational efficiency of financial markets. [ABSTRACT FROM AUTHOR]

This paper measures the interdependency and transmission of shocks between a sample of financial markets in Latin American. Our results favor the use of copulas and extreme events theory for the computation of mutual (inter) dependence of markets. We show that these techniques provide more accurate measurements in portfolio diversification and Value-at-Risk calculations, vis-à-vis the use of correlation coefficients, which stand as the most popular instrument used in the literature [ABSTRACT FROM AUTHOR]

This paper uses the Hinich test to detect non-linearity windows on the series of daily closing prices of the commodities Copper, Gold, Palladium, Brent Oil, Silver, Platinum and Oil WTI. In addition, we use Wavelet theory to study either the scale or the scales that occur or accumulate the process of non-linearity. The results regarding the test of Hinichare consistent with those found in previous research, we confirm the phenomenon of non-linearity presence in series of prices of financial assets. Nevertheless, by breaking down the series using wavelet, we find evidence that there are periods of non-linearity that occur before the window of non-linearity. In addition, we find evidence that after a non-linear window the phenomenon of non-linearity does not fully disappeared butthere is still nonlinear behavior in the windows of the next period, but at different scales. The results indicate the impossibility of building lineal models to predict expected prices for commodities and therefore it might be prudent to manage financial risk, not only for companies in hands of the private sector but also for those owned by the state. [ABSTRACT FROM AUTHOR]

This paper presents empirical evidence that allows us to understand how does the welfare level of beneficiary households of the conditional cash transfer program Oportunidades evolve, both in the short and in the medium term. Understanding this evolution is relevant in order to design efficient exit mechanisms for this type of programs -something that concerns at least 27 conditional cash transfer programs worldwide. Using administrative data of the universe of beneficiary households, we study changes in welfare levels of rural and urban households in the short and medium term. Furthermore, recognizing that the evolution of each household's welfare level might be heterogeneous, we analyze the paths different types of households have followed over time. Our results confirm the existence of heterogeneity in the evolution of welfare levels among households. The data shows that poorer households have achieved greater improvements in their welfare level than (relatively) better off households. [ABSTRACT FROM AUTHOR]

This paper develops a theoretical model to examine the conditions under which clustered firms in a less developed country may cooperate in an export consortium to market their output collectively in a developed country. The consortium eliminates the role of an intermediary firm in the developed country. The clustered firms are heterogeneous in expected quality of output. The clustered firms know the quality type of other firms, but the foreign intermediary does not. The foreign intermediary, however, has a lower marketing cost than the clustered firms. Even when making favorable assumptions about the gains from intra-cluster cooperation, the model shows that collective marketing through a consortium can only occur among high quality type firms, and only for limited parameter values. Increasing the quality differential between low and high quality firms widens the range of parameter values for which collective marketing by the high quality cluster firms takes place. It is more socially efficient for the foreign intermediary to market the cluster's output, but the credible threat of a consortium can lead of a redistribution of surplus in favor of the cluster. [ABSTRACT FROM AUTHOR]

Social capital can be defined as the capacity of individuals or groups to obtain benefits by participating in social networks (Robinson, Siles and Schmid and, Flores and Rello in Atria and Siles eds. 2003). In this paper, we use data from the second round of the Panel of Low Income Households in the Delegación Álvaro Obregón, México, D.F. (PAO) to fit regression models with instrumental variables in order to identify significant proxy variables related to the social capital in social networks to explain the percentage of income that households in PAO spend in food. Also, we present the results of a factor analysis to identify the variables in PAO that are related with the dimensions of trust, social networks and accepted norms that are main elements of the definition of social capital. [ABSTRACT FROM AUTHOR]

Latin America faces a growing concentration of banking markets, situation that worries both the public and the media for its potential impact on competition, access to credit at competitive rates, and thus the potential impact on its economic and social development. This paper provides a brief literature review of banking competition in Latin American, and then assesses market power in the Chilean banking market. Using a novel dynamic reformulation of the static conduct parameter model, we conclude that intertemporal relationships in the supply and demand for credit are very important, so that the use of static models to measure competition would be misleading, delivering biased parameters' estimates. Finally, it is estimated that Chilean banks exert significant market power, especially in the long run, similar to a symmetric Cournot equilibrium of 40 banks, as the market had in the early 90's [ABSTRACT FROM AUTHOR]

This paper analyzes the pass-through of exchange rate to different price indexes in Mexico. The analysis is based on a vector autoregressive model (VAR) using monthly data from January 1997 to December 2010. The pass-through effects are calculated by means of accumulated impulse response functions to a recursively identified exchange rate shock. The results show that the exchange rate pass-through to import prices is complete, but it declines along the distribution chain in such a way that the impact on consumer prices is below 20 percent. Moreover, we find that the exchange rate pass-through seems to have decreased substantially from 2001 onwards, which coincides with the adoption of an inflation targeting regime by Banco de México. [ABSTRACT FROM AUTHOR]

This research conducts a review of theoretical and practical developments of Markov processes in the specialized literature, highlighting their recent advances and showing their potential for their technical goodness, in modeling the decision making processes of rational agents adding more realistic dynamics of various economic and financial variables. In particular, the paper highlights several extensions and reformulations of Markov decision processes, stochastic games, stochastic optimal control with diffusion processes, Blackwell optimality for controlled diffusion processes, stochastic optimal control processes with diffusion processes and its combination with Poisson jumps; time series models with Markov chains, and Bayesian networks with Markov chains in conjuntion with Monte Carlo simulation (MCMC). [ABSTRACT FROM AUTHOR]

This paper introduces inference based stochastic dominance tools to decompose the difference between economic welfare and poverty among countries or regions into inequality effect and income effect. To this aim, the variances and covariances matrix of the generalized Lorenz curve used in that decomposition are developed. The methodology is applied to Spain and its regions for the period 2003-2007. The conclusion is that in some regions, especially AndalucIa and Madrid, the income distribution is clearly anti-poor. [ABSTRACT FROM AUTHOR]

Inflation has been constantly studied at national level because its negative effects over the economy, however this problem has generally been ignored at regional scale, mainly because the assumption that regions have a homogeneous inflation behavior. Expanding the Paredes and Aroca (2008) methodology to the temporal dimension and using National Statistics Institute (INE) data, this paper contributes with an estimation of regional housing inflation for Chilean regions. Main results suggest that regions besides bear different cost of living (higher for extreme regions than those in the center), are also showing heterogeneous speed in their price evolution process. This result suggests that effects of housing policies (and potentially other sectors policies) are heterogeneous between regions and more inefficient than those that could be implemented when taking account of the different regional inflation pattern. [ABSTRACT FROM AUTHOR]

In this paper we evaluate whether there are differences in adult and child outcomes between cohabiting and married households, once differences in observed characteristics are controlled for and possible endogeneity biases due to selection issues are taken into account by using an instrumental variables estimator. We use a variety of Colombian data sources that contain a wealth of data on children's outcome measures. We find that cohabiting households are worse off in various dimensions including ownership of durable goods and child outcomes. In addition, we attempt to understand the reasons why these differences arise and find evidence that cohabiting households exhibit less stable and forward looking behaviors, are characterized by less risk sharing and specialization, and exhibit less healthy behaviors and different childrearing practices. [ABSTRACT FROM AUTHOR]

This paper examines the impact on total factor productivity (TFP) in Latin America and the Caribbean (LAC) and in other developing countries of trade-related technology diffusion from the North (denoted by NRD), education, and governance. The NRD of developing countries is defined as a weighted sum of R&D stocks in the North, with weights related to openness with the North's trading partners. Industryspecific NRD is based on the North's industry-specific R&D stocks, North-South trade patterns, and input-output relations in the South. The main findings are that: i) the impact of education and governance on TFP is significantly larger in LAC than in other developing countries, while the opposite holds for NRD; ii) education, governance and NRD have additional effects on TFP in LAC's R&D-intensive industries through their interaction with the other two variables; and iii) since NRD increases with openness to the North and with the North's R&D stocks, both variables raise the South's TFP directly as well as through interaction with education and governance. These interaction effects imply that increasing the level of any of the three policy variables — education, governance or openness — results in virtuous growth cycles. These are smallest for an increase in one of these variables, stronger for an increase in two of them, and strongest for an increase in all three variables. [ABSTRACT FROM AUTHOR]

This paper shows that the evolution of the level of Mexico real and real per capita output between 1895 and 2008 can be adequately described through a trend stationary model, affected by 4 structural breaks, which ocurred at dates that seem to coincide with domestic institutional arrangements, wars, and financial and economic crises. These changes are modeled through logistic smooth transition functions, in which transition periods are endogenously estimated. In terms of growth rates, our results indicate that for Mexico real and real per capita GDP, there are four stationary growth paths, separated by three transition periods. For instance, for real GDP we identify the following stationary growth paths: 1895-1924, 1935- 1952, 1956-1978, and 1989-2008, separated by three transition periods: 1925-1934, 1953-1955, and 1979-1988. [ABSTRACT FROM AUTHOR]

The tax system combining a flat tax rate with an exempt minimum income has been largely debated in recent years. Detractors argue that tax systems with these characteristics are less progressive and, hence, they tend to lower the degree of redistribution. In contrast, supporters brandish its simplicity as one of its major advantages as simplicity leads to lower levels of both tax evasion and tax avoidance. This paper presents a framework in which I compare the tax compliance of the same taxpayer under two different tax structures: the one with a flat tax rate featuring a tax exempt income bracket and the one exhibiting increasing marginal tax rates. Provided the condition that in both tax structures the tax burden borne by an honest taxpayer is equivalent, I show that the income declared is higher under the tax structure for which the taxpayer faces a higher marginal rate. [ABSTRACT FROM AUTHOR]

This paper presents the results of a Computable General Equilibrium model simulation built to Venezuela. The model is exemplified by the calibration and simulation of an open economy with three institutional actors (households, firms and government) and three productive sectors (oil, manufacturing, and others), for an open economy. Different policy rules are considered. In each case it is shown the calibration process and the results of some simulations using data from a Social Accounting Matrix for Venezuela between 1997 and 2005. It is presented the estimation of relevant until 2009 in the parameters and some sensitivity analysis. [ABSTRACT FROM AUTHOR]

This paper examines the effects of the minimum wages on the employment of immigrants in Spain. This is a novel research that takes into consideration two important facts. First, the considerable increase in the immigrant population occurred in Spain during the last decade and, second, the extraordinary rise in the minimum wage that has been taking place since 2004. An important result is the negative sensitivity of immigrant employment to changes in the minimum wage. Nevertheless, these effects differ according to the immigrants' sex and their geographical origin. [ABSTRACT FROM AUTHOR]

The paper seeks to observe how a firm-level collective agreement influences the evolution of firm's stock price. We first motivate the discussion by presenting a theoretic model that analyses the trade-off between a firm-level collective bargaining and the stock price of the firm. Under the assumption of risk averter investors, the model predicts that firm-level collective bargaining creates incentives to reduce the firm's portfolio by investors to avoid potential losses. Our hypothesis is that collective agreements at firm-level tend to increase wages above the value of the labour marginal productivity. As this negative information is incorporated by investors, they expect abnormal negative returns. Second, we use the event-study approach in order to performance an empirical study with data from the Spanish Stock Market. Finally, we measure abnormal returns and abnormal volume when collective agreement information reaches the market. [ABSTRACT FROM AUTHOR]

This paper is concerned with the ownership structure of corporate debt from Chilean firms. Specifically, we examine the relation between specific firm factors and bank debt use for a sample of 168 listed Chilean firms between 1997 and 2008. More exactly, it is found that bank loans are related positively to growth opportunities, collaterals and the risk of the projects, and negatively related to firm size and the quality of projects. We find also that the positive incidence of growth opportunities becomes negative in large firms. [ABSTRACT FROM AUTHOR]

We study the cost effectiveness property of different control strategies for improving environmental quality. Our prospective analysis considers the application of Transferable Emissions Permit System (TEPS), Transferable Ambient Permit System (TAPS) and Standards (Std) applied on fix sources in Bogota-Colombia. A numerical simulation model allowed us to obtain costs of each regulatory system, which were compared with associated environmental quality. The results show that the most cost effective regulation for any environmental quality goal is TEPS, followed by TAPS and finally Std. In addition, the paper presents a new conceptual result on the enforcement strategies for a regulatory instrument that considers a spatially differentiated pollutant. The results suggest that for any goal of environmental improvement, a TAPS induce compliance cheaper than in any other regulatory system under consideration. [ABSTRACT FROM AUTHOR]

This paper presents a procedure for estimating potential output and the total factor productivity (TFP), to be applied to Peruvian economy. On the basis of potential output series the economic cycle is then calculated to demonstrate that the output gap includes the TFP gap and the unemployment gap (natural rate and actual rate on unemployment). Moreover, it contrasts the sources of growth and productivity behavior during the import substitution era and the period of neoliberal policies. On the other hand, it shows that productivity changes are associated to the evolution of capital labor ratio and efficiency of investment. The empirical evidence indicates that, in the last decades, there weren't modernization processes with significant impacts on the Peruvian economy as a whole. [ABSTRACT FROM AUTHOR]

This paper discusses, estimates and compares microeconometric strategic interaction models applied to the labor supply of households in Mexico. Because the possibility of decentralized decision-making within the household provides a motivation for a game theoretic framework, the model estimates are based on the assumption that the observed variables represent the outcome of a static discrete game. The models are estimated using data from the Mexican Family Life Survey 2002 (MxFLS). The maximum likelihood estimation, based on the non-cooperative Nash and Stackelberg equilibrium concepts, proved feasible and gave plausible results. The main results suggest the interdependence of individual choices within the household. [ABSTRACT FROM AUTHOR]

This paper models the impact of extrinsic incentives in a tax compliance model. It also provides experimental evidence that confirms the existence of a positive rela- tionship between rewards and tax compliance. If individuals are audited, rewards for honest taxpayers are effective in increasing the level of tax compliance. These results are particularly relevant in countries where there is little respect for tax law since rewards can contribute to crowding in the intrinsic motivation to comply. [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 presents an econometric analysis of the demand for the monetary aggregate M1 for Mexico. Using cointegration techniques, we identify both a stable long-run relationship between M1 and its determinants, and a statistically sound single-equation error-correction model. Results are used to carry out the following simple applications: i) empirical determination of the value and stability of dual inflationary equilibria, given the observed seigniorage levels; ii) calculation of the seigniorage maximizing inflation rate, and iii) analysis of the potential relationship between a measure of excess money and inflation. Results indicate that the low inflation equilibrium is stable, and that the excess money indicator shows, in retrospective, some capacity in predicting inflationary pressures. [ABSTRACT FROM AUTHOR]

This paper econometrically analyses the factors that determined the dynamics of real estate price in the Metropolitan Area of Chile during the period 1990-2007. The results show that variables such as age and size are statistically significant determinants of property prices; access to Metro stations tends to capitalize on a nonlinear manner; and both household income and aggregate income are economically significant. The price decomposition reveals that between 68% and 71% of price level is explained by determinants related to attributes of the dwelling, while about 68% of the observed price growth during 1990 and 2007 is result of macro-financial determinants. During 2006 and 2007, the evolution of housing prices is not significantly different from that predicted by the model. These results are robust to alternative estimates by housing type and different sample sub periods. [ABSTRACT FROM AUTHOR]

Chile has an unsatisfactory distribution of household income and although its public expenditure (in health, education and housing) and its redistributive policy using direct transfers, have helped reduce poverty; they have not however reduced inequality strongly. The data shows that autonomous household income distribution has improved only marginally after taking into account incomes net of taxes and cash subsidies. With this initial position, the paper determines the impact of the income distribution and the incidence on the economy, which would occur if there was a potential tax increase for households in the richest quintile and a simultaneous transfer of this amount to households in the poorest quintile. This is explored with a computable general equilibrium model using Chilean data, which estimates the direct and indirect effects of this redistribution. It shows that 3.85 points increase in the effective tax rate to the richest quintile raises the income in the poorest quintile at 61.6% and reduces the Gini coefficient from 0.49 to 0.47. However, this kind of strategy to improve equity has important general equilibrium effects, notably a fall in investment and wages according to distinct skill levels. [ABSTRACT FROM AUTHOR]

This paper analyses the influence of economic remoteness in the explanation of per capita GDP disparities across Spanish provinces. In order to do so, we regress provincial per capita GDP on market access and a set of control variables using OLS and IV estimates. The results of our estimations show that market access is statistically significant and quantitatively important in the explanation of the spatial income structure observed across the Spanish provinces. Our results also show that there are at least three channels through which market access might be affecting Spanish per capita GDP figures: human capital, productive capital and the size of R&D activities. [ABSTRACT FROM AUTHOR]

This paper decomposes labor force participation, the unemployment rate, and the employment shares of self-employment, and of the formal and informal salaried sectors into age, cohort, and time effects. The life cycle patterns of labor force participation and formal employment follow a standard inverted U-shape. Younger workers are more likely to participate in the informal salaried sector, while self- employment increases monotonically with age. However, significant informal salaried employment is also observed among older unskilled workers and women. Strong countercyclical variations are observed for the informal salaried sector, while the opposite occurs for the formal sector. Self-employment fluctuations are countercyclical with a lag. We find an "added worker" effect only during severe recessions among unskilled women. Long-run generational effects show a steadily rising participation in the informal sector with a corresponding decline in formality among newer generations of salaried workers. Some preliminary explanations for this fact are discussed. [ABSTRACT FROM AUTHOR]