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on Central and South America |
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Issue of 2005‒01‒23
seven papers chosen by |
| By: | José De Gregorio |
| Abstract: | This paper reviews the Chilean experience of growth, with particular focus on the rapid growth that began in the mid-1980s, as the economy recovered from the crisis of 1982. This process slowed down in the late nineties. This paper also reviews the evidence on growth and decomposes the rate of growth and the level of output into its components. It discusses the strengths and weaknesses that explain Chile’s growth take-off and that support future growth. Finally, the paper reviews estimates of the potential rate of long-run growth for the Chilean economy |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:298&r=lam |
| By: | Jorge Enrique Restrepo; Claudio Soto |
| Abstract: | This paper documents the main empirical regularities of the Chilean economy over the last 20 years. In the first place we describe the structure of the economy in terms of the relative size of different sectors, and the importance of different aggregate demand components. In the second place we characterize the business cycle, describing the volatility and persistency of several variables along the cycle, and their correlation with output. In general, some of the correlations show that real shocks play an important role in explaining the business cycle in Chile. At the same time, movements in the terms of trade and in foreign capital’s availability are highly correlated with aggregate demand fluctuations. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:301&r=lam |
| By: | José De Gregorio; Andrea Tokman R. |
| Abstract: | The paper reviews the exchange rate management experience in Chile, with particular emphasis on the floating exchange rate regime and its two forex intervention episodes. It presents evidence on Chile’s favorable conditions to face exchange rate shocks: a well-developed financial sector, that offers hedging opportunities taken up by the corporate sector to decrease its vulnerability through balance sheet effects; and a low and decreasing level of passthrough from the exchange rate to prices. These elements contribute to diminish the costs of the floating exchange rate regime, reducing its implied financial and price instability threat, and therefore avoiding fear of floating. Moreover, it provides enough credibility to the current exchange rate system, reinforcing the commitment to making interventions a rare event. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:302&r=lam |
| By: | Igal Magendzo |
| Abstract: | The paper reviews recent evidence related to the evolution of investment and its determinants in Chile and its relationship to medium- and long-term growth. It also reviews the main theoretical views that relate investment and growth, as well as international evidence. In Chile since 1990, gross fixed capital formation has been around 25% of GDP, with a steady increase in the weight of machinery. Investment has responded to its fundamentals such as the cost of capital and growth perspectives. It has also been highly procyclical. The paper concludes with a review of studies about the tax on retained earnings. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:303&r=lam |
| By: | Jorge Enrique Restrepo; Andrea Tokman |
| Abstract: | This paper reviews the issues and papers presented at the VII Annual Conference of the Central Bank of Chile on Labor Market and Institutions, that will soon be compiled in a book by the same name. It discusses the origins of labor regulations, which are many times not associated to specific market failures. It measures its effects on labor markets, growth and inequality. Effects that vary by type of regulation, the context in which they are applied and the degree of enforcement. Finally, the paper presents work how regulations should be designed in order to generate the appropriate incentives for both firms and workers. The papers reviewed are potentially very useful in the understanding the type of regulation that should be implemented, when and how. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:304&r=lam |
| By: | David Rappoport; José Miguel Benavente; Patricio Meller |
| Abstract: | This paper ranks Chilean universities for a sample of careers, using income data of graduates some years into their professions. The concept of ranking is constrained to categories, namely first-, secondand third-class universities, so defined with respect to the average of all universities. For the estimations, a two-level model is used with graduates from the same career, level 1, and grouped by universities, level 2. Some conclusions can be drawn from the results. First, rank depends on the career choice. However, universities in the Santiago and Valparaíso regions seem to predominate, particularly the traditional (existing before the Reform of 1981 that boosted the creation of private colleges) and earlier established ones. Second, rankings are generally robust when considering different groups of graduates. However, some evidence exists in favor of a tradeoff between number and quality of professionals, and of the presence of a “signal” effect à la Spence. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:306&r=lam |
| By: | Stanley L. Engerman; Kenneth L. Sokoloff |
| Abstract: | Over the last few years, colonialism, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. Although a number of new accounts cast colonial empires in a more favorable light than has generally been customary, others contend that colonial powers often leveraged their imbalance in power to impose institutional arrangements on the colonies that were adverse to long-term development. We argue here, however, that one of the most fundamental impacts of European colonization may have been in altering the composition of the populations in the areas colonized. The efforts of the Europeans often involved implanting ongoing communities who were greatly advantaged over natives in terms of human capital and legal status. Because the paths of institutional development were sensitive to the incidence of extreme inequality which resulted, their activity had long lingering effects. More study is needed to identify all of the mechanisms at work, but the evidence from the colonies in the Americas suggests that it was those that began with extreme inequality and population heterogeneity that came to exhibit persistence over time in evolving institutions that restricted access to economic opportunities and generated lower rates of public investment in schools and other infrastructure considered conducive to growth. These patterns may help to explain why a great many societies with legacies as colonies with extreme inequality have suffered from poor development experiences. |
| JEL: | N10 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11057&r=lam |