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This paper introduces a two-sector model of endogenous distributive cycles and overproduction, by using elements from Marxian and Kaleckian perspectives. The model combines the two-sector model with market power presented by Dutt (1988) with insights from the cyclical model of Goodwin (1967) and the model of growth and distribution of Dutt (1987). The paper establishes the analytical conditions for a short-run equilibrium point for sectoral capacity utilization rates. Furthermore, for the long run, considering capital accumulation, the paper demonstrates the existence of stable cycles in four dimensions (sectoral distribution of capital, employment rate, and markups for sectors producing capital and consumption goods). These findings are used to reinterpret overproduction within capitalist cycles, where the relative magnitudes of overaccumulation of capital and underconsumption change at different phases of the cycle, while full employment is not a relevant case. The paper concludes by suggesting insights for future research. [ABSTRACT FROM AUTHOR]

The aim of this paper is: first, to show that the relationship between Latin America and the International Monetary Fund (IMF) is a faithful reflection of a class struggle on a world scale, where the correlation of internal and external forces has been articulated over the years in favor of capital; second, to analyze the concrete possibilities that the region will face in the future if it intends to reverse this unfavorable history. The paper argues that the IMF has played a key role in the reconfiguration and extension of the dominance of international finance capital over the productive resources of Latin America by favoring the consolidation of a local capitalist class subordinated to the designs and power of transnational capital. [ABSTRACT FROM AUTHOR]

To effectively address the grand challenges of our time, we cannot simply tinker around the edges by fixing market failures. We must actively shape markets to deliver on the objective of generating more sustainable and inclusive growth. This paper argues that an objective-oriented economy requires a market-shaping approach; one that accompanies the concept of the public good with the common good framing that is needed to design the interface for this collaboration. This is about structuring the conditions and governance mechanisms that shape the capabilities, tools, institutions, and partnerships needed to take concrete action. Building collective intelligence into these dimensions ex-ante is essential for maximising public value for all actors involved. This paper sets out how a market-shaping and common good framing can be conceptualised and brought together. Importantly, missions can be used to orient and coordinate policies, institutions, innovation, and investments around clear, ambitious, and measurable goals. Further, this paper addresses the implications for key global challenges, from climate change to pandemics. [ABSTRACT FROM AUTHOR]

Neoliberalism is a political-economic philosophy that consists of two claims: one economic and the other political. The economic claim is: that free market laissez faire economies are the best way to organize economic activity as they generate efficient outcomes that maximize well-being. The political claim is: that free market economic arrangements promote individual liberty. This paper argues both claims are problematic. The evidence from the forty-year experiment that began in 1980 shows neo liberalism has undercut shared prosperity and unleashed illiberal forces that threaten liberty. The paper distinguishes between the first political turn which saw the establishment of neoliberal political hegemony, and the second one toward proto-fascism that we are now experiencing. The second turn is being driven by a collection of factors that have created a demand for proto-fascism and weakened the defenses against alt-right ideas. Those factors include socio-economic disembedding, institutional destruction and political disembedding, increased economic inequality that tilts political power, an alteration in attitudes to government and governance, transformation of economic identity, and a cultural transformation that celebrates sociopathic egotism. The Third Way's capture of center-left politics means liberal elites occupy the political place that should be held by true opponents of neoliberalism. Those liberal elites obstruct the politics needed to reverse the deep causes of the drift to proto-fascism. Ironically, that makes those elites a real danger. [ABSTRACT FROM AUTHOR]

This paper reviews the different approaches and policies that are most used in the literature to measure the level of poverty with tools of fuzzy logic. These policies are based on the integrated measurement method (IM), which combines poverty line methods and unmet basic needs. Moreover, we present the most recent studies on the measurement of the level of poverty in different sectors and populations, as well as the more relevant conclusions of the work. [ABSTRACT FROM AUTHOR]

This paper studies Argentina's economic growth trajectory between 1962 and 2019. To achieve this, we analyze the pattern of technological progress deduced from the dynamics of labor productivity and the output capital ratio. Between 1962 and the mid 1980s, technical change was Marx biased (for example, labor saving and capital consuming), which resulted in decreased profitability. From then and until 2008, technological change has been Hicks neutral with increased profitability. Afterward, profitability resumes the negative trend until the end of the analyzed period. The structural change observed since the middle 1970s is associated with a halving of the average rate of capital accumulation, greater macroeconomic volatility, and changes in development models. [ABSTRACT FROM AUTHOR]

This paper reinterprets some intuitions from Marx by using a model of endogenous cycles in three dimensions: employment rate, wage share, and labor intensity (this last variable has not received enough attention in the Marxian literature of cyclical models). The paper presents an analytical demonstration (using the Hopf bifurcation theorem) and numerical simulations for the existence of stable cycles in the model if the mechanization rate is sufficiently high and the bargaining power of the working class to increase wages is lower than a given threshold. In contrast, the model is unstable when the bargaining power of the working class is too high; a result that motivates the discussion of the notion of structural economic crises (which differ from the periodic economic crises that emerge in the context of capitalist cycles). The paper concludes with a summary of results and suggestions for future research. [ABSTRACT FROM AUTHOR]

This paper aims to analyze the relationship between agricultural methane and nitrous oxide emissions as a function of per capita gross domestic product (GDP) and its quadratic term in 26 Latin American and Caribbean countries (1990-2019). It also considers the stock of foreign investment to test the polluting paradise hypothesis, agricultural land (AL), and, additionally, methane for nitrous function. The study comprised unit root and cointegration tests. Coefficients were estimated by using fully modified least squares (FMOLS), correlated common effects (CCE), and augmented mean group (AMG). Results by FMOLS show statistical evidence of an environmental Kuznets curve in the set of countries for methane and support the polluting paradise hypothesis. However, results from CCE and AMG show the opposite. For nitrous oxide, FMOLS confirms a U-shaped curve. The above supports a joint environmental policy for both gases, where AL is a key element. The previous results must be corroborated with other methods and the studies extended to other countries over time. [ABSTRACT FROM AUTHOR]

Since its appearance in 2020, Brazil and Mexico have been among the most affected countries in the world by covid-19. Their respective presidents, Jair Bolsonaro and Andrés Manuel López Obrador (known as AMLO), have played a leading role in specific policies during the pandemic. Their choices were both singular and counter- intuitive. On the health front, AMLO initially underplayed the seriousness of the situation, and the Brazilian president, Bolsonaro, defended a frankly negationist attitude, with a dramatic balance sheet, without his popularity being seriously affected. On the economic front, they have chosen policies that contradict not only each other but also their own supposed ideological stances. Bolsonaro, who is ranked on the far right, has implemented an emergency transfer program on a scale comparable to those of developed countries and the most massive the country has ever seen. Conversely, AMLO, considered a progressist, provided just a minimum policy package, maintaining his previous electoral program. By adopting a comparative approach and mobilizing a unique and diversified set of data, the objective of this paper is to explore these apparent contradictions. After having established the precise diagnosis of the policies implemented to deal with the crisis and the economic and health situation in the two countries during the 2020-2022 period, we propose an original interpretation grid of the central role played by the two presidents. [ABSTRACT FROM AUTHOR]

The aim of this paper is to analyze the progressivism in Latin America, by inquiring about the peculiarities for which this phenomenon could not promote structural changes and what would be the chances of achieving them with the advance of the hegemonic and capitalist transition that the world is going through. If progressivism manages to continue and preserve itself to the point of the transition where the advanced capitalist class emerges to replace the decadent class, it could achieve, in alliance with the latter, the promotion of changes that modify the productive structure in favor of the subaltern classes. [ABSTRACT FROM AUTHOR]

In this paper we analyze the feasibility of exporting spiral notebooks from Argentina to Mexico. We consider this possibility for a leader Argentinean enterprise both, the Argentinean and Mexican markets are studied, and also the strategic positioning of the several enterprises operating in the Mexican market. We also include a sensitive analysis on the exchange rate, giving as a result several alternative scenarios for possible competition among the enterprises. We conclude that it is very convenient for this type of enterprise. [ABSTRACT FROM AUTHOR]

The objective of this paper is to quantify the land use from the primary activities in terms of consumption in Mexico. To do this, we assign data on the land use for agriculture, livestock, productive forestry, and aquaculture to the primary economic activities represented in the 2018 input-output table. Also, the input-output model of land use is complemented with statistical information from the import matrix and the social accounting matrix of 2018. The results indicate that the land footprint amounts to 61 745 416 hectares and 0.49 hectares per capita. This means that 73% of the land footprint is represented by land areas within our country and 27% by areas in other countries. The land demand derived from the consumption of the population in Mexico is greater than the land areas used in the production of primary activities. This study has two limitations: one referred to the assumptions of the input-output model and another, to the concept of land use. The originality and value of the article consist in analyzing the demand for land for food production in Mexico, which represents the greatest threat to the conservation of terrestrial ecosystems and the ecological services that emanate from it. [ABSTRACT FROM AUTHOR]

This paper analyzes the effects of trade with China on the productive structures of Latin American economies. For this, a structural decomposition analysis is carried out based on the input-output matrices of the Asian Development Bank for the period 2007-2017. The document shows that the effects of import substitution (negative) and exports (positive) on the change in gross production reflect the growing importance that China has acquired in recent decades as a source of imports and as a destination of exports of various sectors for Latin America. Results are included for Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela. [ABSTRACT FROM AUTHOR]

Employment in the industrial sector has decreased in all advanced countries, even though the sector's share in the gross domestic product (gdp) has not changed or has decreased only slightly in many cases, mostly because of improvements in labour productivity. Simultaneously, services have not stopped growing, reaching a share in developed economies of around 75%, sometimes higher, both in employment and contribution to nominal gdp. These processes have been the subject of extensive literature developed on the concepts of "deindustrialization" and "tertiarization", and on their possible explanations. Though delayed, these two far-reaching trends have taken, or are taking place, also in countries classified as middle-income or developing countries, giving rise to the concept of "premature deindustrialization". Various explanations have emerged around these issues, all of which have qualified the two major trends as worrisome. A common explanation suggests an industry-services contrast, where the trade-off between them appears as "the villain of the story"--borrowing an expression from the traditional theatre. This paper aims to show that this view is oversimplifying and wrong. What is observed in almost all economies is a process of growing integration between the two sectors, instead of a confrontation between them, and everything indicates that they will only integrate further in the coming years. The characteristics of such integration will be analyzed in the paper as well. [ABSTRACT FROM AUTHOR]

This paper examines the effects of the financial crisis of the 1930s on the path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily credit-related) aspects of the financial sector-output link and consider the problems of debtors as well as those of the banking system. We argue that the financial disruptions of 1930-1933 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand. Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression. [ABSTRACT FROM AUTHOR]

In this paper, we built an input-output environmental model for the Mexican economy to estimate the greenhouse gas (GHG) emissions produced by this economy to the year 2030 and to explore the possibilities for their reduction. The model shows how innovative technologies applied in selected subsectors of the economy might reduce total emissions, through their direct and indirect effects on other sectors. We used the model to calculate two trajectories: one called "business as usual" and another that results from simulating a technological change in selected sectors. We conclude from the results that technological change, even limited to a few sectors, tends to produce important beneficial effects in terms of GHG reduction. [ABSTRACT FROM AUTHOR]

By analyzing Mexico's productive structure in the 1980s and 2013, this paper explores whether promoting the domestic market may complement the dynamism of the external sector and achieve a process of sustained growth and development for an economy highly integrated into the international market. The methodology applied is an extension of the input-output model and network analysis; in particular, the concept of vertically integrated sectors is a major feature to reach conclusions. The results show that stimulating the domestic market can be a complementary strategy for promoting the export sector to boost growth and economic development. [ABSTRACT FROM AUTHOR]

The paper shows that the liberalization processes and the expansion of the financial sector have changed profoundly the economic, social, and political life of the world economy. New phenomena have arisen, such as the supremacy of the monetary authorities over the fiscal ones and the transformation of national governments into creditors of the central banks. These changes have generated negative consequences, like financial instability, an increase in the number of crises, low growth, and distributive inequality. The article clarifies the need to modify relevant aspects of economic policy. It argues that attributing the role of leaders to the monetary authorities in the coordination of economic policies harms growth and distributive equity. The work claims that discretion should be returned to fiscal policy and that public intervention should guide the evolution of the productive structure. To restore discretion to fiscal policy, the quality of public policies and the levels of trust between the different institutions of national economic policy and between financial market operators and government authorities must be improved. [ABSTRACT FROM AUTHOR]

This paper revisits Keynes's writings from Indian Currency and Finance (1913/1971) to The General Theory (1936b/1973) with a focus on financial instability. The analysis reveals Keynes's astute concerns about the stability/fragility of the banking system, especially under deflationary conditions. Keynes's writings during the Great Depression uncover insights into how this event may have informed his General Theory. By exploring the connection between the experience of the Great Depression and the theoretical framework, Keynes presents in The General Theory, we can see that the assumption of a constant money stock featuring in that work is central. The analysis underscores the case that The General Theory is not a special case of the (neo-) classical theory that is relevant only to "depression economics"--refuting the interpretation offered by J. R. Hicks (1937) in his seminal paper "Mr. Keynes and the classics: A suggested interpretation". As a scholar of the Great Depression and Federal Reserve chairman at the time of the modern crisis, Ben Bernanke provides an important intellectual bridge between the historical crisis of the 1930s and the modern crisis of 2007-2009. The paper concludes that, while policy practice has changed, the "classical" theory Keynes attacked in 1936 remains hegemonic today. The common (mis-)interpretation of The General Theory as depression economics continues to describe the mainstream's failure to engage in relevant monetary economics. [ABSTRACT FROM AUTHOR]

This paper performs a comparative analysis of the Chinese and Mexican production structures, through a descriptive study and using the methods of structural analysis on input-output tables of 1995 and 2011. During this period, the average annual per capita gross domestic product (gdp) growth in China amounted to 9.18%, while in Mexico it reached only 0.95%. Assuming that China's growth has been successful in this sense, then a mayor conclusion from this paper is that if Mexico wishes to reach high growth rates, the main element potentially useful to elaborate an efficacious strategy from China's experience is clear: To foster, from a proactive participation of the state, the development of key sectors which will constantly increase their multiplier effects, so that a mayor integration of the national economy is achieved, and the development and consolidation of the productive apparatus sufficient to support the generation of next-generation productive sectors. [ABSTRACT FROM AUTHOR]

In this paper, a new model is developed by referring to the literature on Dutch disease and rent-seeking for explaining how a natural resource boom in the energy sector decreases national income and induces a resource movement effect under a rent-seeking monopoly. In such a model, it is shown that the resource movement effect certainly occurs during the boom where labor inputs will move to the energy sector from the services sector. Moreover, the boom facilitates rent-seeking and decreases national income. [ABSTRACT FROM AUTHOR]

The paper reviews pressing issues related to corporate taxation in the oil industry amid the financial crisis, sanctions imposed against Russia, and low oil prices. It pays special attention to the analysis of the first results of the tax reform and to the introduction of a profit-based tax. The main goal of the research is to develop and implement a modern and efficient tax regime that would ensure a continuous and stable flow of tax revenues to the national budget and contribute to the long-term development of the national oil industry. The subject of the study is the current issues of oil taxation, in particular, the application of the taxation mechanism of the financial results of oil companies and the reform of the taxation system of export duties to the oil refining industry. The article presents the ways of effective tax policy for the qualitative development of oil sector enterprises. [ABSTRACT FROM AUTHOR]

After 40 years of neoliberalism, even governments believe that they are inefficient when compared to the private sector. And economics, in its swing to the right, reinforces this view. The philosophy behind public expenditure for social purposes and the criteria for judging such projects has not been a subject of public debate until recently. In particular, industrial policy was very simple: leave it to the private sector to allocate resources as the market prompts. In Keynes's time, this was not the case. This article reviews some of the issues concerning the industrial policy that was aired in the interwar period. The debate needs to be revived, revisited and, where appropriate, revised to suit the present day, but on basic principles there is much to learn from the interwar discussions. The contrast between the recent (2018) UK government's White Paper on industrial strategy and the Liberal Industrial Inquiry's Britain's Industrial Future (1928) is quite instructive. [ABSTRACT FROM AUTHOR]

Financialization refers to the process by which financial markets, actors, instruments, and institutions gain importance in the functioning of economies and where the surplus generated is directed towards financial accumulation, which displaces productive accumulation (Epstein, 2005). However, this process is heterogeneous among regions and countries, and occurs in the periphery in the form of "subordinate financialization", since the dynamics of global accumulation condition its asymmetric and dependent insertion. This paper aims to examine a set of central aspects of the process of subordinate financialization of Latin American countries, which is manifested in the loss of sovereign monetary spaces, and which are linked to the process of dollarization of banking systems, the degree of indebtedness, and the internationalization of wealth. [ABSTRACT FROM AUTHOR]

The paper studies the decline of the labor income share (LIS) in Mexico during the 1990-2015 period. The decline is mostly explained by reductions within the economy's major sectors (including manufacturing, tradables, and non-tradables), rather than by a recomposition of value added towards sectors with low labor shares. In contrast to agriculture --where LIS fell due to a shift of labor force from self-employment to wage-employment-- in other major areas of the economy the fall in LIS is explained by reductions within the wage-employment sector. Econometric estimations indicate that parallel declines in the wage share and relative productivity of non-tradables and in the US manufacturing labor share all played a large role in the reduction of the manufacturing wage share in Mexico. More generally, the analysis suggests that the lagging productivity of the economy's informal non-tradable sector --itself a reflection of the country's low aggregate rate of economic growth-- is a crucial factor in the fall of LIS in the formal sectors. The paper concludes by discussing possible explanations for the paradox of the slow rate of economic growth in Mexico despite the rise in the profit share. [ABSTRACT FROM AUTHOR]

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

This paper contains a critical examination of the main features and results of the general equilibrium theory (get). We review get's failure in its attempt to demonstrate global stability for the general case of a n-commodity market connected through a price system. This is a well known result based on the works of Arrow, Block, Hurwicz and Scarf; but it is now also a well established fact after the Sonnenschein-Mantel-Debreu theorem. The paper also covers the case of price formation in trading models (non-tâtonnement) where uniqueness of equilibrium is lost. The presence of the walrasian auctioneer and the difficulties inherent to the introduction of money are also examined. The essay also shows how get fails to demonstrate the existence of a general competitive equilibrium with a fixed point theorem because the mappings that are used in this effort lack the economic interpretation commonly attributed to them. Finally, the essay also highlights some of the implications of this negative scorecard for neoclassical macroeconomic theory and its reductionist project with rational expectations and representative agents to provide "micro-foundations" to macroeconomic analysis. [ABSTRACT FROM AUTHOR]

Historically, higher education is considered one of the main routes of upward social mobility. However, given the plurality of options offered by the education system at this level, there may be a distinctive pattern not only of socioeconomic origin but also of economic results after graduating from a specific higher education institution (hei), which can inhibit the promotion of social mobility through hei. Using data from the Intergenerational Social Mobility Module 2016, this paper analyzes whether the hei in Mexico promote the social mobility of their graduates. The results suggest a potential mediating effect of hei in the intergenerational transmission of wealth. This means that the wealth of the original household is an important determinant of the type of hei from which the respondents graduate, furthermore, the type of hei also explains part of the variation in the wealth of the current household of graduates. Specifically, individuals who reported having completed their university studies at the National Polytechnic Institute (ipn, Mexico) present the lowest intergenerational correlation of wealth, 0.18. In contrast, normal schools and the National Pedagogical University (upn, Mexico) have the highest intergenerational persistence rates, 0.48 and 0.47, respectively. Under these findings, it is argued that the type of hei from which individuals graduate can complement the explanation of the mechanisms of intergenerational persistence of wealth. [ABSTRACT FROM AUTHOR]

In contrast to other countries, in Mexico, there is no survey to numerically measure consumer inflation expectations. This paper reports the results of the application of a simple questionnaire that aims to obtain a first approximation of these expectations. The exercise also seeks to obtain information on the process of expectations formation through a controlled intervention, as well as to investigate which products have an effect on inflation expectations the most. Four groups were randomly formed: three that received information on past, present or expected inflation, and a control group with no additional information. Consistent with the literature, the results show that people have a higher inflation expectation than specialists. The experiment also reveals that providing information does affect and reduce inflation expectations. Finally, we find that inflation expectations depend mainly on everyday consumer products, such as food. [ABSTRACT FROM AUTHOR]

This paper presents a preliminary assessment of the various impacts of the fiscal reform undertaken by President Enrique Peña Nieto. First, the weaknesses and vulnerabilities of the fiscal structure that the new administration had to face are shown, in particular the dependence on oil revenues. The need for a fiscal reform that increased income, diminish fiscal evasion and labour informality was evident. In the second part of the paper the actual reform measures are discussed, as well as its various measurable impacts. It is particularly relevant the unexpected oil price drop and the government response to maintain gasoline prices and thus prevent fiscal revenues from declining, as well as the government’s repeated forecasting mistakes. Finally, it is concluded that in spite of being insufficient, Peña Nieto’s fiscal reform was successful in increasing the fiscal burden from 8.4% of gdp in 2012 to 13.1% in 2017. However, such increase in revenues was not enough to prevent the rise of the public debt in almost 10 percentage points of GDP, in spite of the fact that the government took the operational surpluses of Banco de México. [ABSTRACT FROM AUTHOR]

Background: "Middle class" is a polysemic social category. In methodological terms, it is similar to that of poverty, both without consensus according to literature. A comprehensive review of literature is made in this paper, emphasizing on single and multidimensional methodologies, identifying non-consensual findings when using and building thresholds and different dimensions. Methodology: This paper proposes identification of Mexican Middle Class according to a multidimensional perspective, consistent with Coneval's multidimensional poverty measurement method (2009), where income is a necessary but not enough condition of security and none vulnerability. "Latent-class models" are built based upon the Coneval's Rights and Well-being indicators that identified the ratio of population that could be considered middle classes. Five categories are obtained: population in multidimensional poverty, vulnerable population by income, vulnerable population due to social deprivation, middle classes and rich population. Results: Among the main findings, there is evidence that Mexico continues to be a country of poor, rather than middle class people. The number of people in poverty is 2.3 times greater than that of middle class, while the status and conditions of life guaranteeing security and not economic vulnerability, characteristic of the middle class, is only due for a little more of a quarter of the total population, 27.5%. This paper presents findings on the evolution of the middle class, which grows between 2000-2006, before the food and economic-financial crisis of 2006 and 2008, but never reaches levels above 50%. After crisis years, it begins its descent again to levels similar to 1994, showing its vulnerability to economic crisis. Conclusions: As a conclusion sustainability of middle classes over time in Mexico depends both on an effective and efficient policy to fight against poverty, and on specific policy about middle classes, which actually in Mexico and Latin American countries does not exist. This means that the broadest layers of the population, in the same way as in developed countries, have access to a living wage that guarantees well-being, effective health services, quality education, access to the credit market and financial services, as well as adequate and dignified pension system. [ABSTRACT FROM AUTHOR]

This paper aims to integrate into a single analytical framework the three dimensions of sustainable development, namely the economic, social, and environmental ones. With this objective, a three-gap model within the structuralist tradition is laid down, which identifies and compares three rates of growth: the maximum rate compatible with external equilibrium, the maximum rate compatible with the environmental commitments of the region, and the minimum rate necessary for increasing equality. Policy scenarios are simulated using the E3ME Cambridge Econometrics model, a macroeconometric model of the socioeconomic, energy, and environmental systems. The simulation exercises confirm the crucial importance of combining industrial and technological policies with those for social protection and welfare to foster growth, formal employment, the decoupling of emissions, and equality. An international governance that encourages the reduction of technological asymmetries and broadens the policy space for development in the periphery is necessary to advance towards a new style of development. [ABSTRACT FROM AUTHOR]

This paper first analyzes the performance of Latin America during the long economic cycle that took place between 1998 and 2014, which combined the regional effects of the Asian crisis with a growth phase driven by a supercycle of commodity prices. However, the expansionary phase was followed by a five-year period of economic stagnation, during which previous achievements were weakened, even before the covid-19 crisis erupted, with its negative consequences. This confirms the persistence of the region's economic vulnerability to external shocks, as well as the difficulties in maintaining sustained growth rates associated with processes of structural change, which make it possible to reduce the gap in the development levels vis-à-vis the leading countries and face the challenges of environmental sustainability. It is also pointed out that, despite the important achievements in terms of social development during the recent growth cycle, the high structural inequalities that characterize the region were not broken. [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]

This paper analyzes the different trends that will determine the future of work in Latin America; it reviews the hypothesis that places the impact of technological change at the center of the explanation of changes in the future of work. We discuss the studies on the potential impact of these technological transformations on the labor world, in terms of employment levels, the quality of work, as well as the aspect of control and labor discipline. Also, other important trends that could over-determine the labor market are analyzed. [ABSTRACT FROM AUTHOR]

The Mexican automotive sector--integrated into the regional value chain of North America, led by the United States--is characterized by performing mainly manufacturing tasks, which limits its value-added contribution. However, this does not imply that the environmental impact resulting from these tasks is proportional to the value it generates. The paper aims to analyze this dual dimension of the Mexican automotive sector, by describing both its productive structure and its environmental impact related to its foreign trade flows. The results reveal uneven participation in the regional value chain depending on whether Mexican value-added exports are considered in monetary or emission terms, which exhibits a greater contribution in terms of emissions than in value compared to the United States. [ABSTRACT FROM AUTHOR]

This paper constitutes a preliminary report that analyzes the crisis and indebtedness of countries, particularly those in developing and emerging markets, in the face of the covid-19 pandemic. It makes a critical recount of the measures and recommendations that various international organizations and developed countries are taking, and based on these it proposes some suggestions to fight the crisis equitably for the whole world. [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]

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]

The structure and the trend of the fiscal system reflect the orientation of the development model of Mexico in past decades and they determine its future model and its ability to meet the main social challenges (development, equity, wellbeing, environmental sustainability, etc.). The objective of this paper is to study the relative dimension, the tax structure and the trends in tax collection, as well as the nature and the objectives of the incentives and the tax benefits that have been enforced in Mexico in recent years. This exercise allows an evaluation of the 2014 tax reform to be made with the perspective of the past six years and the formulation of future challenges. A descriptive and qualitative approach was used based on data obtained from the Inter-American Center of Tax Administration (ciat), the Organisation for Economic Co-operation and Development (oecd), and the Secretaría de Hacienda y Crédito Público (shcp). The structure of tax collection is analyzed, with a focus on the main federal taxes, as well as the volume and the composition of tax expenditure, by breaking down the existing incentives and the tax benefits on each of the taxes. The main results indicate a passive evolution in the collection power that grew from 12.5% of gross domestic product (gdp) in 1990 to 15.6% in 2019, principally based on consumer taxes, wage income tax and a strong dependence on the fossil fuels sector. This shows that some of the stated objectives of the 2014 reform--significantly increasing collection capacity and reducing the jungle of incentives and tax benefits--have hardly been met. In conclusion, some of the challenges that a tax reform should face in terms of inclusion, equity and sustainability are formulated. [ABSTRACT FROM AUTHOR]

The increase in temperature in the last 50 years has had serious effects in the economy, so it is necessary to take mitigation policies to reduce its effects. In this paper, an estimation of the emission multipliers is carried out through the input-output technique, which serves as another instrument for the evaluation and analysis of the different mitigation policy alternatives. The estimated multipliers allow us to observe which sectors have the greatest impact on greenhouse gases emissions, in order to carry out a characterization of the most efficient policies in each sector. [ABSTRACT FROM AUTHOR]

This paper investigates, for the first time in the Colombian case, the indirect effects of spillovers from foreign direct investment (fdi) on the exports of national companies. At an empirical level, we used a convenience sample made of 32 exporting companies, 14 foreign affiliates, and 18 domestic companies, which maintained continuity at about 60% of the total value of the national exportable supply in the 2007-2016 period. By using a panel of data with fixed effects, we show that the positive effects of the inflow of fdi on the export of local companies are more associated with reaction mechanisms for the protection of their international markets from the so-called competition effect, and not with the export learning processes due to the knowledge, the technology, and the experience that foreign companies possess. [ABSTRACT FROM AUTHOR]

Different international organizations and national governments are promoting the adoption of open government strategies. There are rankings to measure the evolution of some of its dimensions, but there is a gap of indicators comprising open data, transparency, participation and collaboration simultaneously. In this paper we propose the Open Government and Participation Index (ogpi), based on previous academic works, to compare open government strategies over time and among different countries. The index, which weighs different open government dimensions, is built for a sample of 33 member countries of the Organisation for Economic Co-operation and Development (oecd) from open and consistent sources. The results show that the areas of transparency and open data have a wide room for improvement and that participation and collaboration strategies require an autonomous approach. By region, open government is more developed in the Commonwealth countries, while those in Eastern Europe present the lowest level of implementation. [ABSTRACT FROM AUTHOR]

Discrimination in the labor market is an important issue in most countries of the world. In such a context, this paper uses nationally representative data from the 1990-2017 National Socio-Economic Characterization Survey to explore the gender wage gap and discrimination in Chile. Different versions of the well-known decomposition of Blinder and Oaxaca are applied to measure the wage gap and to decompose its possible causes and the variables involved. Finally, wage estimates are corrected for selection bias, and decomposition by income quantum is studied. The results of the different methodologies show a decrease in wage discrimination when we look at the full 1990-2017 period, but the decrease was mainly in the 1990-2003 period, and then has remained relatively constant until 2017. Wage discrimination reached 49.7% in 2017, where 45.2% corresponded to women's subpayments and 4.5% to men's overpayments, a structure that is maintained throughout the period studied. On the other hand, it shows that estimating uncorrected wage discrimination due to selection bias underestimates the wage discrimination suffered by women in Chile. Finally, it proves that a large part of wage discrimination occurs mainly in the extremes of lower and higher income distribution. This work also adds evidence to the fact that women who are active in the labor market have more years of education than men, but for reasons that classical theory cannot explain, they obtain a lower wage. [ABSTRACT FROM AUTHOR]

Given the uncertainty in this regard, this paper analyzes the most appropriate monetary policy position for Mexico, which aims to maintain the inflation objective without negatively affecting product growth. The value of the neutral interest rate in Mexico for the next five years is estimated based on Taylor's rule and a co-integrated vector autoregression (VAR) model (CVAR). The results suggest that the monetary policy rate is above the neutral interest rate, which, combined with the potential international rate cut, could grant the central bank for almost the entire six-year period a degree of freedom to maintain its rate below the current level; in the short term the current monetary policy rate could be cut by at least 25 points without risking convergence to the inflation target. [ABSTRACT FROM AUTHOR]

This paper studies the evolution of skill premia and its relationship with the productive structure in 16 countries in Latin America, using microdata from household surveys and information from national accounts for the 1991-2015 period. The evidence suggests that the change in the productive structure is significantly correlated to the dynamics of wage inequality. In particular, when the share in total value added of sectors that are more intensive in high-skilled labor grows, the skill premia increases significantly. [ABSTRACT FROM AUTHOR]

This paper analyzes debt securitization in underdeveloped countries, using the case of Argentina, Mexico, and Brazil. We argue that the three countries have had a significant increase in the issuance of debt securities. However, the nature of the securities issued is different in each nation. In the case of Argentina, the increase in international debt securities in circulation has to do with the issuance of government securities. In Mexico, the increase is more related to the new financing needs of Mexican non-financial corporations. While in Brazil, the increase in the issuance of debt securities is due to a combination of both factors. [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]

Michał Kalecki wrote an article on government expenditures financed by taxes on profits, which set forth an interesting debate between him and Keynes, the latter being the editor of the journal in which Kalecki's article was published. Later, in 1950s, Kalecki wrote a few empirical studies to substantiate his theory. Two of these papers dealt with the US economy, in which he adopted a novel method of analysis. However, his methodology did not have the deserved impact, even amongst his followers. This article revisits Kalecki's analysis to understand the recent evolution of the US economy. [ABSTRACT FROM AUTHOR]

This paper provides a multidimensional reflection on the covid-19 pandemic. It states that the dominant analytical approach to the pandemic is medical and epidemiological, which leads to an underestimation of its social, economic and political causes and impacts. It also calls attention to the fact that scientific knowledge on covid-19 is still scarce and contradictory. The essay starts with a review and analysis of the magnitude of the problem compared to other causes of death in Mexico, and a review of how different social and economic conditions seem crucial for the frequency and severity of the disease. It examines the behavior of the medical industrial complex relative to the production of vaccines, drugs and other medical devices, and detects divergent conducts: one highly speculative, including financial speculation, and another that, for the time being, has promised not to take a profit. Finally, there are some considerations concerning how the virus is changing political processes. [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]

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]

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]

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]

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]

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: 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]

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]

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]

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]

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]

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]

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: 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]

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]

Adopting a legal definition of informality, this paper studies the causes of informality in general and with a particular application to Mexico. It starts with a discussion on the definition and measures of informality. It then argues and provides evidence that informality is not only a reflection of underdevelopment but may also be the source of further economic retardation. Next, the paper analyzes informality's main determinants, arguing that informality is not single-caused but results from the combination of poor public services, a burdensome regulatory regime, and weak monitoring and enforcement capacity by the state. This combination is especially explosive when the country suffers from low educational achievement and features demographic pressures and primary production structures. The paper then evaluates the empirical relevance of each determinant of informality to the specific case of Mexico. [ABSTRACT FROM AUTHOR]

This paper presents a survey on the Economics of Happiness; special attention is placed on recent research about the relationiship between income and happiness. The paper discusses the epistemological and methodological foundations of the Economics of Happiness. It starts by mentioning the two traditional approaches in the study of well-being: the imputation approach and the presumption approach. Next, the paper explains the subjetive well-being approach, which constitutes an alternative to the traditional ones. The subjetive well-being approach is concerned with the well-being people experiences, and it states that the best way to know it is by directly asking people. The paper goes on with a presentation of the main findings from the Economics of Happiness on what respects to the role of income. It is shown that income plays both a needs-satisfaction and a positional-marker function; thus, relative income matters for happiness. In addition, it is explained that in- come-aspiration gaps and habituation processes do matter for happiness; those personal values which people use in their assessment of a happy life are also relevant for the relationship between income and happiness. Furthermore, it is shown that income may have a nil impact on some domains of life where people act as human beings and where life satisfaction comes from. The paper ends with a brief discussion of other relevant findings from the Economics of Happiness. [ABSTRACT FROM AUTHOR]

This paper surveys the recent literature on the methodologies that have been used to evaluate the distributive and poverty effects of trade liberalization in Latin America. Our survey classifies the large number of papers on the subject according to the welfare measure they use: inequality (on wages and household income) or poverty. Our survey shows that a sound methodological approach evaluating the welfare effects of trade liberalization should take into account: the degree of tariff to price transmission, all income sources (not only wages), employment effects, gender and regional heterogeneity of the impact of trade, and second-order as well as general equilibrium effects. Two methodologies represent the latest efforts in this direction: (1) Income generation models with an explicit relationship between changes in tariff and changes in household real income (Porto, 2007), which are capable of testing the different transmission channels linking trade policy and inequality and poverty; (2) The Macro-Micro approach (Bourguingon et al, 2008), which combines a CGE with a micro-simulation model, evaluates the welfare effects of trade policy, taking into account general equilibrium effects. These two approaches can be combined to get the short- and long-term welfare effects of trade policy, respectively. [ABSTRACT FROM AUTHOR]

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

This paper discusses the growth slowdown of the Mexican economy during the reform and post reform periods. It addresses four possible factors behind the growth deceleration. First, the role of international trade integration, showing that the trade policy reforms of the 1980s and 1990s were in fact very successful in enhancing export growth and trade openness but not in promoting a dynamic pattern of trade specialization. Second, the productivity growth slowdown, arguing that this should be seen as a consequence rather than a cause of the growth deceleration as the evolution of productivity growth is closely associated with the expansion of tertiary underemployment. Third, the discussion of the role of human capital formation suggests that educational and health indicators have been improving during the recent period, partly as a consequence of the demographic bonus, and cannot be held responsible for the fall in output per worker that has taken place since the early 1980s. Finally, the paper focuses on what it believes is the primary determinant of the growth slowdown, the low rate of physical capital accumulation. [ABSTRACT FROM AUTHOR]

The present paper focuses on the potential bias in growth estimation generated by the problem of missing data (or data truncation) due to changes in census survey policy. The analysis will help to ascertain which sub-sectors in manufacturing were experiencing growth to show evidence supporting the hypothesis of a positive growth rate in manufacturing as a whole during the period 1929-1934. We particularly analyze the performance of the Mexican manufacturing industry at sub-sector level of disaggregation and during the period 1929-1934 considering that census policy was not homogeneous for the two censuses of interest (and for subsequent ones). When any data set is truncated, this can generate bias in the estimation process. However, the bias in estimates based on these data sets will depend on how important the proportion of missing data is. Hence, one of the main tasks on this paper is to examine how important the missing data problem is for each sector of Mexican manufacturing in order to shed light on the reliability of Value Added growth rates estimates which are calculated in this paper. [ABSTRACT FROM AUTHOR]

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

One of the usual hypotheses in standard economic growth theory is that labor force follows exponential growth. This is an unrealistic assumption because growing exponentially population can be arbitrarily large. In this paper we reformulate the neoclassical Solow model of economic growth by assuming that the law describing population growth verifies two stylized facts: i) population is strictly increasing and bounded and ii) the rate of growth of population is strictly decreasing to zero. The main result of the paper is the proof of the convergence of capital per worker to a constant value independently of the initial condition. [ABSTRACT FROM AUTHOR]

Dual inflation takes place when price increases in non-tradable goods are higher than those of tradable goods. In this paper, we develop a simple model where public spending has a positive externality on the production of both sectors. The main results suggested by the paper are the following: i) An increase in non-productive public spending does not generate dual inflation, as the usual Balassa- Samuelson result states ii) An increase in productive public spending rises the productivity of both sectors and this can result in dual inflation, dual deflation or no effect on prices; and, iii) Dual inflation only takes place when productive public spending has a higher effect on the technology of the tradable sector than on the non-tradable one, as illustrated in the Spanish data. [ABSTRACT FROM AUTHOR]

Latin America has been dominated by growth expansions that, more often than not, have ended in crises and protracted periods of stagnation. This has led to poor growth performance during most of the past century. This paper reviews Latin American growth experiences and discusses some particular areas that help to explain why sustainable growth has been so elusive in the region. In particular, it discusses the role of openness and intraregional trade, the role of institutions, macroeconomic stability and inequality, all factors that are central to resume and maintain growth. The paper also discusses more general issues related to growth, such as the importance of protecting property rights and having an adequate structure of rewards to effort, which includes equal opportunities. Finally, a brief overview on current macroeconomic developments is presented. [ABSTRACT FROM AUTHOR]

After years of effective functioning, the intermediate exchange rate systems ended up becoming prone to suffering speculative attacks, as the process of financial integration advanced. The empirical evidence collected in this paper endorses the fact that the less strict pegged exchange rate systems, that is soft pegs, were the epicentre of the most of exchange rate crises during '90's in Europe, Latin America and Eastern Asia. Consequently, intermediate systems and, especially soft pegs, have lost credit to the benefit of more extreme systems of exchange rate spectrum. This paper contributes new evidence on the tendency toward the bipolarization of the exchange rate systems and studies their evolution between 1990 and 2004, both in the advanced economies and in the emerging economies most integrated in the international capital markets. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between exports and economic growth for the case of Guatemala and El Salvador, emphasizing the quantification of spillover effects. Cointegration vectors are estimated for each country, which includes the variables exports, GDP, public investment and private investment. It was found that one cointegration vector exists in each country. Error correction models were estimated including the error term from the other country's cointegration vector as an indicator of "excess demand". The cointegration vectors were re-estimated, including in each case the exports variable from the neighbor country. The existence of one cointegration vector was inferred for both countries. The paper concludes stressing the interdependence of economic variables gives rise to an interdependence of national social policies, and arguing for the convenience of establishing policy coordination framework on a Central American scale, with view towards utilizing economic interdependece to impart more dynamism to economic growth. [ABSTRACT FROM AUTHOR]

This paper studies the determinants of the capital structure for a sample of 113 firms that are listed in the Santiago Stock Exchange (Chile) in the period 1990-1998. The major difference between this and previous studies is the statistical method to analyze the data. Using LISREL (Linear Structural Relations), we find that tangibility of assets is significantly and positively related to the financial leverage and companies with higher level of profitability have more debt. On the other hand, if we use OLS we find that the leverage significantly related to tangibility, profitability, regulation and quality of the firm. We find less significant results related to growth opportunities, size and industrial classification. This paper shows that measurement errors are important when we have to choose proxies to capture the variables that determine the financial leverage. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the changes in the Chilean economy specialization patterns mainly in the period of fastest economic growth and taking into account its relative abundance of productive factors. There are three important findings in this paper that are relevant for natural resources abundant, fast-growing economies. First, we find that even there is a great degree of heterogeneity in output and productivity growth across economic activities, the most dynamic sectors are those more intensive in natural resources. In contrast, labor-intensive sectors are more likely to experience economic contractions. Second, consistent with international evidence, our results suggest that significant changes in Chilean specialization patterns are possible only if the economy increases substantially the investment in both physical and human capital. Third, we do not find evidence that necessarily the tradable sector is an engine of growth. In fact, for a large part of the period under analysis, the non-tradable sector had experienced more rapid output and productivity growth than the tradable sector. This would be consistent with a number of structural reforms (privatization and liberalization of foreign direct investment) that favored expansion in non tradable sectors. [ABSTRACT FROM AUTHOR]

This paper estimates an Euler equation for per capita consumption to investigate whether social security increases consumption ceteris paribus in seventeen countries. Following the seminal work of Martin Feldstein, the literature has estimated consumption functions to address this question. Unfortunately, consumption functions confound structural and expectational parameters, making their interpretation problematical. Furthermore, if their variables are difference-stationary, least squares may produce inconsistent parameter estimates and must virtually always produce inconsistent standard errors for the estimated parameters. By contrast, under reasonable assumptions, generalized method of moments consistently estimates the parameters and standard errors of Euler equations. Moreover, the parameters are more readily interpretable. The paper finds strong evidence that social security increases consumption ceteris paribus. Furthermore, the coefficient estimates imply large negative effects either on the growth rates of the capital stock, out put and consumption along their balanced growth rates or alternatively on their levels. [ABSTRACT FROM AUTHOR]

In this paper the methodology of real options is presented as an imperative tool for the board of directors of a firm for the decision making process on the financial assessment of projects or business strategies when there is flexibility (optionality) of making, in the future, new decisions such as: expanding, contracting, deferring, correcting or abandoning a project or strategy. In this regard, this research carries out a literature review of closed-form formulas to value the optionality of several strategies are obtained under the assumption that the present value of the expected cash flow follows a log-normal distribution or by using binomial methods. In particular, this paper deals with the case of the decision making of selling or shutting down a firm when the market value of its securities (titles of capital and debt) exceeds the present value of the expected cash flows, or the present value of such expected cash flows is less than certain salvage value. In this context, a Mexican firm that provides satellite communications services is analyzed. Moreover, the methodology of real options is applied to highway construction projects, in particular, the case of the Toluca-Atlacomulco highway project is examined under the assumptions of constant and stochastic volatility. It is also important to emphasize that this paper focuses on: i) the valuation of American abandonment real options; ii) valuation of composed real options; iii) valuation of real options with stochastic volatility extending Hull and White's (1987) model. [ABSTRACT FROM AUTHOR]

This paper analyzes the effect of minimum wages on the income of workers in Mexico. Using panel data from the National Urban Employment Survey (ENEU) and from the administrative records of the Mexican Social Security Institute (IMSS), this paper shows that changes in the real minimum wage induce changes in the same direction on wages in the Mexican labor market. This effect is weaker (although positive) the higher the income of the worker. It is also shown that the effect was stronger in the period comprising 1985-1993 than in the period comprising 1994-2001, suggesting that this effect is losing strength. [ABSTRACT FROM AUTHOR]

This paper shows the effects of uncertainty of economic growth and inflation on average rates of output growth and inflation, using quarterly data of Argentina, during the last three decades. The paper employs a GARCH-M model (VAKMA model) that permits to test diagonally and symmetry relationships between the variables. The results suggest that increased growth uncertainty is associated with significantly higher average output growth (theory of precautionary savings), while higher inflation uncertainty is correlated with lower average output growth (Okun, 1971, and Friedman, 1977, arguments). Both inflation and economic growth show evidence of significant asymmetric response to positive and negative shocks of equal magnitude. [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: 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]