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2012

Terms of Trade in Small Open Economies: The Role of Monopolistic output Markets

Lugar W-101
A cargo Luis-Gonzalo Llosa, Ph.D. (c) UCLA
Descripción

This paper revisits the role of terms of trade using a small open economy (SOE) model in which imports are inputs in production, output markets are imperfectly competitive and firms are connected in an input-output network. Otherwise, the model nests the standard SOE model commonly used in quantitative macro. Using this framework, this paper delivers the following results: (i) terms of trade shocks affect TFP in the same way as in the data, (ii) terms of trade shocks increase the volatility of consumption relative to that of output, and (iii) input-output linkages amplify the influence of terms of trade on the real economy. The model is calibrated to Mexico. Numerical experiments show that terms of trade shocks alone account for about half of observed TFP volatility and approximately 45 percent of the observed output volatility.
With respect to the excess volatility of consumption, terms of trade shocks imply a volatility of consumption that is 54 percent larger than the volatility of output. Plugging productivity and terms of trade shocks into the model generates a consumption volatility that is 5 percent more than that of output, close to the actual ratio of volatilities in the data.

Archivo logo pdfArticulo1_TermsofTrade_TFP_Llosa_aug12.pdf 637,04 kB
Fecha 13/12/2012
Hora 12:30 a 1:45 pm.

Lavado de Activos en Zonas Rurales?: Evidencia Empírica para Colombia.

Lugar W-101
A cargo Hernando Bayona Rodríguez, Estudiante de Doctorado en Economía - Universidad de los Andes.
Descripción

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Abstract:

Gran cantidad de estudios han mostrado que el lavado de activos tiene efectos negativos sobre la economía. La principal herramienta del sistema anti lavado de activos (ALA) y contra la financiación del terrorismo (CFT) son los Reportes de Operaciones Sospechosas (ROS), los cuales son enviados por las entidades reportantes a la Unidad de Información y Análisis Financiero (UIAF) para su estudio. Este trabajo muestra evidencia sobre la existencia de lavado de activos (LA) en las zonas rurales dedicadas al cultivo de hoja de cocal. Para esto, se estiman una serie de modelos que relacionan distintas medidas de ROS, variable que recoge las dinámicas de LA, con la presencia de cultivos ilícitos. Para las estimaciones se utiliza un panel municipal entre 2000 y 2010 que contiene variables que permiten controlar por actividad económica, violencia, conflicto e instituciones. Se encuentra una relación positiva entre los ROS y los cultivos ilícitos, esta relación se mantiene a través de diversas especificaciones y ejercicios de robustez. Se concluye la existencia de LA, identificado mediante los ROS, en zonas rurales.

Fecha 06/12/2012
Hora 12:30 a 1:45 pm.

Inversión Extranjera Directa en Colombia en el siglo XX, énfasis en el sector petróleo

Lugar W-102
A cargo Humberto Bernal, Estudiante de Doctorado en Economía - Universidad de los Andes
Descripción

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Abstract:

Este documento presenta la evolución de la Inversión Extranjera Directa (IED) en Colombia entre 1900 y 2010 y destaca los principales acontecimientos relacionados con este tipo de inversión, se realiza énfasis en la IED hacia el sector petróleo. El control de capitales a través de la Ley 444 de 1967 y el Acuerdo de Cartagena entre los miembros del Grupo Andino en 1969 dominó gran parte de la legislación referente a los flujos de IED hacia Colombia. Posterior a 1991 se incrementa el libre comercio y el flujo de capitales donde la IED toma una gran relevancia hasta el punto de crear agencia promotoras de la IED en Colombia. El documento destaca la IED hacia el sector petróleo debido a su relevancia en el desarrollo económico de Colombia, gracias a este sector Colombia ha financiando gran parte de su consumo externo. El modelo para determinar la significancia de los determinantes se desarrolló bajo la teoría Ownership, Location and Internalization (OLI) y herramientas microeconómicas de libro de texto. Los resultados son significativos bajo estimación econométricas. Se destaca el impacto negativo de incrementos en la tasa de secuestros y tasa de homicidios sobre la acumulación de IED en el sector petróleo colombiano. Otro determinante relevante es la variación del precio real del petróleo.

Archivo logo pdfInversion_Extranjera_Directa_en_Colombia_en_el_siglo_XX.pdf 10,36 MB
Fecha 04/12/2012
Hora 12:30 a 1:45 pm.

"Optimal Taxation and Occupational Choice: The Redistributive Role of Production Inefficiencies"

Lugar W-102
A cargo Jean-Marie Lozachmeur, Toulouse School of Economics
Descripción

Coautores: Renato Gomes , Toulouse School of Economics y Alessandro Pavan , Northwestern University

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Abstract:
Following the seminal contribution of Diamond and Mirrlees (1971), production efficiency is often thought as a key property of optimal tax systems. The celebrated Diamond-Mirrlees theorem shows that when the government can use differientiated linear taxes on all factors (input and output), the economy should lie at the production efficient frontier of the economy. Strikingly, at the optimum, distortions in consumption produced by income taxation do not translate into distortions in production. This result has important consequences for the design of tax systems. For instance, the Diamond-Mirrlees theorem provides an intellectual justification for opposing the taxation of intermediate goods, as well as the use of profession-specific payroll taxes, or profession-specific income tax deductions. In the case of labor inputs, profession-specific taxation produces a wedge between wages and productivities, what leads to an undesirable violation of production efficiency.
One important assumption behind these prescriptions is that labor input is homogenous accross professions (or sectors of the economy). This paper departs from the Diamond-Mirrlees setting by considering a model where agents have different skills for working at different professions, and can choose which profession to follow in response to the equilibrium wage levels and the relative tax burden accross professions. The main result of the analysis is that when occupational choice is endogeneous and agents have different skills on different professions, then the optimal tax system introduces violations on production efficiency in order to reduce the costs of income redistribution.
Production efficiency has first been challenged by Naito (1998). This author has developped a simple two types model with skilled and unskilled workers each producing two goods. When the goverment cannot observe individuals skills, the taxation can solely be based on observable income. The production efficiency then breaks down since the government cannot apply different tax rates on different types of labour supply. Saez (2004) then emphasized that this result is true only in the short run i.e when individuals do not choose their occupation choice between skilled and unskilled workers. But in the long run, when individuals choose their occupation choice only according to the after tax rewards, production efficiency is restored. However a strong assumption in this model is that workers are equalily skilled in each occupation. Indeed workers choose their occupation according to the tax rewards and a separable cost parameter that is assumed to be idependently distributed over the while population of workers. Such an assumption can also be found in Scheuer (2011) in a model where agents choose wether to become entrepreneur or workers. This author finds that when the income taxation cannot be based on the occupational choice but only on income, production efficiciency arises only when the production function is linear between the two types of work. He however finds that production efficiency can be restored when the income taxation can be based on occupational choice.
Contrary to Saez (2004) and Scheuer(2011), our model allows workers to differ in their privately known skill in each occupation. We study the simple case where an homogeneous product is produced using two types of labour possibly differing in their productivity. The government is Rawlsian and seeks to implement a tax schedule solely based on observable income. Workers choose simultaneously their occupation and their labor supply by maximzing their utility. Our results show that (i) whether the income tax can or cannot be based on occupation, production efficiency never arises even if the production function is linear in the two types of labour and (ii) for any symmetric distribution of skills, occupational choice should be distorted towards the more productive sector.

Fecha 29/11/2012
Hora 12:30 a 1:45 pm.

The Externalities of CCT Programs on Crime: The case of Familias en Acción in Bogotá

Lugar W-102
A cargo Adriana Camacho, Facultad de Economía - Universidad de los Andes
Descripción

Coautores: Daniel Mejía y Catalina Ulloa

 

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Abstract

This paper studies the collateral effects of a Conditional Cash Transfer Program (CCT) in Colombia, Familias en Acción (FeA), on crime in the urban area of ​​the city of Bogotá. We combine two panel data sets: The administrative records of beneficiaries of FeA (SIFA) and crime reports by the National Police for the city of Bogotá. The paper evaluates two possible channels through which the program can affect crime. First, we evaluate the income effect, where we exploit the variation in the program´s disbursement dates together with the fraction of FeA beneficiaries at a small geographical unit level (UPZ). Second, we estimate the incapacitation effect using the mandatory holidays of the public education system, when students don’t have to attend school and have spare time. We find evidence in favor of both channels. More precisely, we find a disproportionate decrease in crime rates right after disbursement dates, and this effect is stronger in those geographic units with a higher fraction of FeA beneficiaries. We also find evidence that crime increases during vacation periods. Although CCT programs are not aimed to be a citizens security strategy, our evidence shows that they might have temporal non-negligible effects on crime rates.

Fecha 27/11/2012
Hora 12:30 a 1:45 pm.

Política monetaria y ciclos económicos regionales en Colombia

Lugar W-101
A cargo Jorge Quintero Otero, Estudiante de Doctorado en Economía - Universidad de los Andes
Descripción

Coautor: Andrés González Gómez, Banco de la República

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Abstract:

Este trabajo busca determinar si la política monetaria puede proporcionar una explicación parcial a las diferencias que existen en el comportamiento de los ciclos económicos entre las regiones de Colombia, así como también establecer la importancia que tienen en la explicación de estas diferencias, los canales tradicionales de transmisión sugeridos en la literatura. Utilizando proyecciones directas, una metodología alternativa a los VAR estructurales para la estimación de los impulsos respuestas, se encuentra que las acciones inesperadas de la autoridad monetaria no afectan de manera homogénea el ciclo económico en las regiones colombianas, y que la tasa de cambio es el canal de transmisión de la política monetaria que mejor explica estas diferencias.

Fecha 22/11/2012
Hora 12:30 a 1:45 pm.

Illegal Drug Markets and Violence in Mexico: The causes beyond Calderon

Lugar W-102
A cargo Juan Camilo Castillo y Daniel Mejía, Facultad de Economía - Universidad de los Andes
Descripción

Coautor: Pascual Restrepo (MIT)

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Abstract:

What are the main causes behind the surge in violence experienced in Mexico in the last few years? Has the relative success in the war on drugs in Colombia in recent years played an important role in explaining the epidemic-like increases in violence in Mexico since 2007? This paper studies and quantifies the effect that drug trafficking activities has had on violence in Mexico. We use two different proxies for drug trafficking at the municipal level: cocaine seizures and information on the presence of drug trafficking organizations (DTOs). In order to solve the potential endogeneity problem, we instrument these variables using simple geographic features of each municipality that capture their comparative advantage in illegal drug trade, and supply shocks in Mexico caused by cocaine seizures in Colombia. Our estimates show that the rise of Mexican DTOs is partly a result of successful interdiction policies implemented in Colombia, and this in turn explains a non-negligible fraction of the levels of violence observed in Mexico in the last few years. The effects are particularly large for violence generated by wars between DTOs (executions). Furthermore, our results indicate that the effect of drug trafficking activities on violence are only significant for municipalities with presence of two or more cartels. Finally, we do a series of falsification tests that further corroborate the channel proposed by our identification strategy.

Fecha 20/11/2012
Hora 12:30 a 1:45 pm.

Movilidad Social y Transición Demográfica en Colombia-1870

Lugar ML-513
A cargo B. Piedad Urdinola, Profesora Asociada, Departamento de Estadística-Universidad Nacional de Colombia.
Descripción

Coautor: Hermes Tovar, Profesor Titular, Facultad de Economía-Universidad de los Andes.

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Archivo logo pdfResumen_ampliado_Libro_historicos_TovarH&Urdinola.pdf 525,59 kB
Fecha 15/11/2012
Hora 12:30 a 1:45 pm.

Las virtudes burguesas.

Lugar W-102
A cargo Deirdre McCloskey, Distinguished Professor of Economics, History, English, and Communication, University of Illinois at Chicago. Professor of Economic History, Gothenburg University, Sweden.
Descripción

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Abstract:

Bourgeois virtues" is not a crazy contradiction in terms. Economists nowadays are slowly recognizing that virtues underlie a market economy. And economic historians have long understood so, in the lives of Quakers and the vital few. Yet what the social sciences have not recognized is that a market economy can actually produce virtues, and some of the best: prudence and courage and hope called "enterprise," for example. We are stuck viewing virtues only as those of soldiers and saints. We need a re-orientation to suit a world in which we are all now bourgeois.

 

Más información en:

http://www.deirdremccloskey.com/academics/index.php

Fecha 13/11/2012
Hora 12:30 a 1:45 pm.

“Efecto de las restricciones vehiculares en Bogotá sobre la contaminación y uso del automóvil”

Lugar SD-716
A cargo Jorge Bonilla, Universidad de Gotemburgo
Descripción

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Las restricciones a la circulación del automóvil durante ciertas horas del día de acuerdo con el número de placa del vehículo se han convertido en un instrumento habitual en varias ciudades del mundo para tratar los problemas de congestión de tráfico y contaminación del aire. Bogotá, a diferencia de otros programas evaluados, ha llevado a cabo una implementación gradual del programa de restricción vehicular Pico y Placa haciéndose más estricto a través del tiempo. Este estudio analiza mediante el uso de modelos dinámicos los efectos de corto y largo plazo del rigor incrementado de Pico y Placa sobre la contaminación y el uso del automóvil, utilizando datos de alta frecuencia sobre las concentraciones de monóxido de carbono, información mensual del consumo de gasolina, registro y venta de vehículos. Los resultados muestran efectos diferenciados del programa sobre la calidad del aire y el uso del auto en el corto y largo plazo y entre los niveles de rigor del programa, los cuales tienden a cuestionar la efectividad del programa a través del tiempo.

Fecha 08/11/2012
Hora 12:30 a 1:45 pm.

The Impact of Armed Conflict on Economic Performance: Evidence from Rwanda

Lugar SD-716
A cargo Pieter Serneels; University of East Anglia and IZA
Descripción

Coautor: Marijke Verpoorten, University of Leuven

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Abstract:

Important gaps remain in the understanding of the economic consequences of civil war. Focusing on the conflict in Rwanda in the early 90s, and using micro data to carry out econometric analysis, this paper finds that households and localities that experienced more intense conflict are lagging behind in terms of consumption six years after the conflict, a finding that is robust to taking into account the endogeneity of violence. Significantly different returns to land and labour are observed between zones that experienced low and high intensity conflict which is consistent with on-going recovery. Distinguishing between civil war and genocide, the findings also provide evidence that these returns, and by implication the process of recovery, depend on the form of violence.

Archivo logo pdfdp6737.pdf 1,52 MB
Fecha 01/11/2012
Hora 12:30 a 1:45 pm.

School Participation and Labor Supply in Urban Mexico: Evaluating Alternative CCT Policies Using Structural Estimation

Lugar W-102
A cargo Arturo Harker Roa; Escuela de Gobierno - Universidad de los Andes
Descripción

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Abstract:

I develop and estimate a dynamic household choice model that incorporates a broad set of determinants of children's labor supply and school attendance, to perform ex-ante evaluations of alternative versions of the urban implementation of the Mexican conditional cash transfer program Oportunidades. Previous research suggests that re-calibrating the targeting and parameters of the educational component of the program could potentially improve its eectiveness with respect to two key objectives: (i) increasing average schooling levels and (ii) eliminating the educational gender gap. The estimation of this behavioral model complements previous ex-post evaluations by providing a forecasting tool that can replicate how the households solve the optimization problem as the program's structure changes. I focus on evaluating cost-equivalent policy schemes that improve the program's ecacy in the rst dimension. I nd that, by eliminating grants at primary and lower secondary levels (where attendance is close to universal) and proportionally expanding transfers at upper secondary, attendance rates could increase by 14.8% for youth 15-17.

Archivo logo pdfHarkerRoa_PROGRESA_WorkingPaper_8_12.pdf 1,87 MB
Fecha 30/10/2012
Hora 12:30 a 1:45 pm.

“A Guide for the Young Economist. Writing and Speaking Effectively about Economics”

Lugar SD-716
A cargo William Thomson de University of Rochester
Descripción

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Fecha 25/10/2012
Hora 12:30 a 1:45 pm.

"Fighting Crime with a Little Help from my Friends. Party Affiliation, Inter-jurisdictional Cooperation and Crime in Mexico"

Lugar W-102
A cargo Ruben Durante, Assistant Professor Department of Economics-Sciences Po
Descripción

Coautor: Emilio Gutierrez, ITAM

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Abstract

We investigate the relationship between inter-jurisdictional cooperation and the effectiveness of law enforcement in Mexico. Exploiting a Regression Discontinuity Design (RDD) in close municipal elections, we study how improved opportunities for cooperation in crime-prevention among neighboring municipalities - proxied by their degree of political alignment - may result in lower rates of violent crime. We find that municipalities in which the party in power in the majority of neighboring jurisdictions barely won experience significantly lower homicide rates during the mayor's mandate than those in which it barely lost. This effect is sizable - a decrease of 25 to 40\% - and is independent of which party is in power in the neighboring municipalities. Political alignment with neighbors is not correlated with a variety of other outcomes including homicide rates during the previous mandate. The observed reduction in crime does not appear to be driven by improved cooperation with state and federal authorities.

Fecha 23/10/2012
Hora 12:30 a 1:45 pm.

The Market for Diversity in Local Television News.

Lugar SD-716
A cargo Lisa M. George, Hunter College and the Graduate Center, CUNY
Descripción

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Coautor: Felix Oberholzer-Gee, Harvard Business School

Abstract:

 

A substantial body of economic theory considers the link between competition and variety in differentiated product markets, yet empirical evidence of product differentiation strategies in media markets remains thin. In particular, we know virtually nothing of differentiation strategies in television news, which remains the primary news source for US households. This paper studies the causes and consequences of differentiation in local television news programs. We develop a revealed preference measure of viewer loyalty from television viewership. We link this demand-based differentiation measure: (1) to news coverage, to determine points of differentiation in television news; (2) to news viewership, to evaluate the value of differentiation to consumers; and (3) to advertising prices, to establish the value of loyalty in the advertising market. Preliminary results show that ideological differentiation is important in television news, with coverage of ideological topics associated with greater loyalty and higher viewership. Greater business coverage and less government coverage is also associated with loyalty. Greater loyalty is associated with higher news viewership overall, and higher advertising prices per viewer.

Archivo logo pdfFCC_Final_Report2011_7_13.pdf 1,12 MB
Fecha 18/10/2012
Hora 12:30 a 1:45 pm.

Words versus Bullets: Media and Democracy with Coercion.

Lugar W-102
A cargo Leopoldo Fergusson; Facultad de Economía - Universidad de los Andes
Descripción

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Coautores: Juan F. Vargas y Mauricio A. Vela

Abstract:
An independent and active media may not favor political accountability when other institutions are weak. We propose a simple model in which politicians running for office may engage in coercion to obtain votes. We show that a media scandal that exposes the misbehaved candidates increases their coercion effort to offset the negative popularity shock. This may result in the tainted politicians actually increasing their vote share. We provide empirical evidence focusing on one salient episode of the recent political history of Colombia, the ‘parapolítica’ scandal featuring politicians colluding with illegal armed groups to obtain votes. We show that colluding candidates exposed by the press not only get more votes than their clean competitors, but also concentrate them in areas where coercion is more likely to occur and state institutions are weaker. Harder to reconcile with other explanations and as a direct test of the effects of media exposure, the same is true for tainted candidates exposed before elections, relative to those exposed after. Our results highlight the complementarity between different institutional dimensions in a democracy: having free and active media may not be enough to ensure political accountability, and may bring undesirable unintended consequences.

Fecha 16/10/2012
Hora 12:30 a 1:45 pm.

Suspensión de pagos y restructuración de la deuda externa colombiana 1825 - 1921

Lugar ML-513
A cargo Edwin López, profesor asociado Programa de Economía-Universidad Jorge Tadeo Lozano
Descripción

Coautor: Fernando Barrios, profesor asociado Programa de Economía-Universidad Jorge Tadeo Lozano
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Abstract:

En este ensayo se estudia cómo el desempeño económico y político interno, y los ciclos externos de endeudamiento afectaron la probabilidad de que el país suspendiera sus pagos de la deuda externa en el largo siglo XIX. Entre 1826 y 1828, 10 economías latinoamericanas, incluida Colombia, suspendieron los pagos de su deuda externa por primera vez en su historia, la cual habían adquirido principalmente con la Gran Bretaña alrededor de 1820. La difícil situación de las finanzas públicas (insolvencia y recomposición de pagos), los ciclos de endeudamiento internacional, las guerras civiles entre otros factores nacionales e internacionales se han identificado como las principales causas del endeudamiento colombiano y de los 5 episodios de cese de pagos de la deuda externa del país a lo largo del siglo XIX. Al integrarse todas las variables relevantes en un modelo probit, se corrobora que la pobreza de la economía colombiana, las crisis inflacionarias de fin de siglo y los constantes déficits fiscales del gobierno central determinaron de manera importante la probabilidad de que el país incurriera en suspensión de pagos de la deuda externa.

Fecha 11/10/2012
Hora 12:30 a 1:45 pm.

On the (in)effectiveness of the aerial spraying campaigns in reducing illicit crops cultivation: Evidence from a quasi-experiment

Lugar W-102
A cargo Daniel Mejía, Universidad de los Andes
Descripción

Coautores: Pascual Restrepo (MIT) y Sandra Rozo (MIT)

 

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Fecha 09/10/2012
Hora 12:30 a 1:45 pm.

Evidence of Demand for Index Insurance: Experimental Games and Commercial Transactions in Ethiopia

Lugar W-102
A cargo Daniel Osgood, International Research Institute for Climate and Society Columbia University
Descripción

Coautores: Michael Norton, International Research Institute for Climate and Society Columbia University; Malgosia Madajewicz, NASA Goddard Institute for Space Studies; y Eric Holthaus, University of Arizona

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Abstract:

We present the results of a series of experimental games with smallholder farmers in the Tigray region of Ethiopia in 2010.

 

In the games, participants were asked to allocate money to different risk management options. One of the options was Drought index insurance that was identical to commercial products sold in the region. Participants exhibited a clear preference for more aggressive insurance contracts with higher frequency payouts, as well as a preference for index insurance over other risk management options, including a simulated savings account with an interest rate higher than local market averages. The preference for higher frequency payouts is mirrored in the commercial sales of the product.

This evidence challenges concerns that the very poor universally choose to purchase minimal index insurance coverage and supports claims that insurance demand may outpace the supply of responsible insurance products.

Archivo logo pdfEvidence_of_demandDraft.pdf 358,43 kB
Fecha 02/10/2012
Hora 12:30 a 1:45 pm.

"Señalización y Competencia"

Lugar W-102
A cargo Tomás Rodríguez, Instituto Europeo (EUI)
Descripción

Coautor: Xu Tan, Department of Economics, Stanford University

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Abstract

Múltiples candidatos compiten por un número exógeno de empleos. Existen distintas tareas, en las cuales el éxito de quien las ejecuta depende de su habilidad inobservable. Este artículo estudia un juego de señalización con múltiples emisores, en el cual cada uno escoge una tarea, y un receptor que observa las tareas escogidas por los emisores y su desempeño (éxito o fracaso) y con base en estas observaciones los asigna a los distintos empleos. Con el fin de analizar el efecto de diferentes niveles de competencia sobre le comportamiento de los agentes utilizamos dos refinamientos del concepto de equilibro secuencial de Kreps y Wilson: (1) Equilibrios que sobreviven al incremento del número de jugadores (2) Equilibrios basados en creencias del receptor que satisfacen una condición de monotonicidad. Esta condición de monotonicidad es una implicación del refinamiento de Banks y Sobel (divinidad) cuando el número de jugadores crece suficientemente. Demostramos que los únicos equilibrios secuenciales puros que satisfacen (1) son agrupadores, y que el equilibrio secuencial agrupador en el cual todos los emisores escogen la tarea más informativa es el único que satisface (1) y (2). Este resultado es distinto al que se obtiene en el modelo clásico de señalización de Spence en el cual el equilibrio separador eficiente es el único que sobrevive la aplicación de los refinamientos comunes del concepto de equilibrio secuencial.

Archivo logo pdfModelOfCompetitiveSignaling_April10_2012.pdf 473,20 kB
Fecha 18/09/2012
Hora 12:30 a 1:45 pm.

Are Anti-drug Programs Affecting Productivity? The case of coca leaf producers in Colombia

Lugar ML-513
A cargo Sandra V. Rozo, UCLA
Descripción

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Abstract

 

This paper uses two rounds of surveys collected by the United Nations Office for Crime and Drugs (UNODC) in Colombia between 2005 and 2010 to assess whether governmental intervention induces productivity innovation in coca cultivation. I estimate the effect of aerial spraying for seven outcomes in the short and the long-run including: i) kgs of coca leaf produced by hectare and per year, ii) kgs of coca leaf per hectare and per harvest, iii) number of harvests collected per year, iv) density of crops (measured as distance between plants), v) productive age of coca plants in years, vi) number of workers in coca crops, and vii) total harvested area in hectares. To solve the endogeneity problem between these variables and aerial spraying I instrument the treatment with the proximity of coca producers to protected areas (e.g., natural parks and reserves). This last is possible since by explicit governmental mandate protected areas cannot be fumigated in Colombia. The results of the estimations suggest a negative effect of aerial spraying over all outcomes in the short-term (i.e., one year). In particular, those producers that were fumigated produced 2868.9 less kgs of coca leaf per hectare and per year, and 433 less kgs of coca leaf per hectare and per harvest relative to the other producers. These results contradict the view that aerial spraying increased productivity of coca producers, at least for the period 2005 and 2010. However, I also found evidence that the effect of the fumigations over productivity in the long- term (1 or 2 years) is not statistically different from zero.

Archivo logo pdfProductity_and_Coca_Crops-First_Draft.pdf 575,22 kB
Fecha 13/09/2012
Hora 12:30 a 1:45 pm

Income Mobility and Welfare in Developing Countries

Lugar W-102
A cargo William Maloney, World Bank
Descripción

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Coautores: Tom Krebs, University of Mannheim y Pravin Krishna, Johns Hopkins University and NBER

Abstract

This paper develops a framework for the quantitative analysis of individual income dynamics, mobility and welfare. Individual income is assumed to follow a stochastic process with two (unobserved) components, an i.i.d. component representing measurement error or transitory income shocks and an AR(1) component representing persistent changes in income. We use a tractable consumption-saving model with labor income risk and incomplete markets to relate income dynamics to consumption and welfare, and derive analytical expressions for income mobility and welfare as a function of the various parameters of the underlying income process. The empirical application of our framework using data on individual incomes from Mexico provides striking results. Much of measured income mobility is driven by measurement error or transitory income shocks and therefore (almost) welfare-neutral. A smaller part of measured income mobility is due to either welfare-reducing income risk or welfare-enhancing "catching up" of low-income individuals with high-income individuals, both of which have economically significant effects on social welfare. Decomposing mobility into its fundamental components is thus seen to be crucial from the standpoint of welfare evaluation.

Archivo logo pdfkkm-mobility-2012-9 complete.pdf 239,59 kB
Fecha 11/09/2012
Hora 12:30 a 1:45 pm

Redistributive Inequality in Cooperation Dilemmas: An Economic Experiment on Fear and Greed

Lugar LL-303
A cargo César Andrés Mantilla, Estudiante de Doctorado, Facultad de Economía - Universidad de los Andes
Descripción

Abstract:
This work explores experimentally the role of asymmetric outcomes in cooperation dilemmas. Participants face three different games where the dimensions of “greed” and “fear” are controlled exogenously. Greed corresponds to the difference between the payoffs commonly known as temptation and reward, while Fear to the difference between punishment and sucker’s payoff. Our findings indicate that Fear dimension reduces the probability of cooperation considerably more than the Greed dimension.
This asymmetry is held even under fixed matching, where subjects are more aware of the opponent’s previous movements under Fear than under Greed. Another finding is that the order in which dilemmas are faced is important: the increase in cooperation when switching to a less unequal dilemma is higher than the decrease in cooperation when switching to a more unequal dilemma.

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Archivo logo pdfMantilla_An_Economic_Experiment.pdf 372,22 kB
Fecha 06/09/2012
Hora 12:30 a 1:45 pm.

Choques internacionales reales y financieros y su impacto sobre la economía colombiana

Lugar W-102
A cargo Juan José Echavarría; Banco de la República
Descripción

Coautores: Andrés González, Enrique López y Norberto Rodríguez (Banco de la República)

Abstract:

En este documento se utiliza la metodología FAVAR (factor augmented VAR) para evaluar el impacto de variaciones no esperadas en cuatro variables internacionales: las tasas de interés de corto plazo, el riesgo, el precio real del petróleo, el café y el carbón, y la actividad económica mundial. Se utilizan funciones de impulso respuesta y descomposición histórica de choques para evaluar la importancia de los factores externos en la actividad económica colombiana, con énfasis en la crisis de fin de siglo.

Archivo logo pdfPaper_Choques_Externos.pdf 622,08 kB
Fecha 04/09/2012
Hora 12:30 a 1:45 pm.

Los efectos de regulaciones sobre contratos temporales, la organización de las firmas y la productividad.

Lugar W-102
A cargo Marcela Eslava; Facultad de Economía - Universidad de los Andes
Descripción

Autores: Marcela Eslava (Universidad de los Andes), John Haltiwanger (University of Maryland), Adriana Kugler (US Department of Labor) y Maurice Kugler (PNUD)

Abstract:

Evaluamos el impacto sobre la composición de los contratos laborales y de la productividad de una combinación de cambios en la legislación laboral colombiana que incrementan la habilidad de las firmas de utilizar contratos temporales y de cambios posteriores que aumentan los costos asociados con contratos de más larga duración. También caracterizamos determinantes a nivel de las firmas del uso de contratos de más corta duración. Encontramos que el desplazamiento hacia contratos a término fijo, por oposición a contratos a término indefinido, ha sido extendido en la industria manufacturera en Colombia durante la última década. Nuestros resultados indican que, como sería el caso en un escenario donde los contratos a término fijo están sujetos a menos costos de ajuste que aquellos a término indefinido, los contratos de corta duración son utilizados como amortiguadores de choques: firmas en expansión (contracción) expanden (contraen) su empleo principalmente en la categoría de término fijo. Por otra parte, los contratos a término fijo también parecen ser utilizados más generalmente como sustitutos de los contratos a término indefinido en particular cuando aumentan los costos laborales indirectos asociados con la regulación. El incremento en el uso de contratos a término fijo está asociado con ganancias de productividad al interior de las plantas pero solo en el caso de firmas que utilizan de forma menos intensiva trabajadores capacitados. Las firmas más intensivas en capacidad ven caer su productividad al utilizar más los contratos a término fijo. Finalmente, estas ganancias en la eficiencia en la asignación entre establecimientos están asociadas con um uso más intensivo de contratos a término fijo.

Archivo logo pdfEslavaetal.pdf 410,86 kB
Fecha 28/08/2012
Hora 12:30 a 1:45 pm.

“On the exhaustiveness of truncation and dropping strategies in many-to-many matching market”

Lugar W-102
A cargo Paula Jaramillo, Facultad de Economía-Universidad de los Andes
Descripción

Coautores: Cagatay Kayi (Universidad del Rosario) y Flip Klijn (IEA – CSIC)

Abstract:

We consider two-sided many-to-many matching markets in which each worker may work for multiple firms and each firm may hire multiple workers. We study individual and group manipulations in centralized markets that employ (pairwise) stable mechanisms and that require participants to submit rank order lists of agents on the other side of the market. We are interested in simple preference manipulations that have been reported and studied in empirical and theoretical work: truncation strategies, which are the lists obtained by removing a tail of least preferred partners from a preference list, and the more general dropping strategies, which are the lists obtained by only removing partners from a preference list (i.e., no reshuffling).

We study when truncation / dropping strategies are exhaustive for a group of agents on the same side of the market, i.e., when each match resulting from preference manipulations can be replicated or improved upon by some truncation / dropping strategies. We prove that for each stable mechanism, truncation strategies are exhaustive for each agent with quota 1 (Theorem 1). We show that this result cannot be extended neither to group manipulations (even when all quotas equal 1 - Example 1), nor to individual manipulations when the agent's quota is larger than 1 (even when all other agents' quotas equal 1 - Example 2). Finally, we prove that for each stable mechanism, dropping strategies are exhaustive for each group of agents on the same side of the market (Theorem 2), i.e., independently of the quotas.

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Fecha 21/08/2012
Hora 12:30 a 1:45 pm.

“¿Quién se beneficia de los programas sociales en Colombia? Análisis de la pobreza desde una perspectiva multidimensional”

Lugar W-102
A cargo Roberto Angulo, Director de Ingreso Social del Departamento para la Prosperidad Social –DPS y Renata Pardo, Consultora de la Dirección de Desarrollo Social del DNP
Descripción

El documento analiza el impacto de un conjunto de programas sociales sobre la pobreza multidimensional en Colombia. Los programas sociales analizados son aquellos que guardan relación con cuatro dimensiones del Índice de Pobreza Multidimensional (IPM): educación, salud, primera infancia y vivienda. El análisis se centra en tres aspectos: i) la incidencia de los programas sociales, ii) la eficiencia de su focalización y iii) su efecto sobre la magnitud de la pobreza multidimensional. Los resultados de incidencia indican que los beneficios de los programas sociales se han asignando progresivamente. Los beneficiarios han sido aquellos que se ubican en los quintiles de población con mayor proporción de privaciones. En general, el conjunto de programas sociales analizados contribuye significativamente a la reducción de la pobreza multidimensional. En ausencia de estas intervenciones la pobreza habría sido 22 puntos porcentuales más alta que la estimada oficialmente para el año 2010 (53.3% vs. 30.4%). Entre los programas sociales, el régimen subsidiado es el que más contribuye a la reducción de la pobreza multidimensional, mientras que los programas de vivienda son los que tienen el menor impacto.

Archivo logo pdfQuien_se_beneficia_programas_sociales.pdf 1,02 MB
Fecha 14/08/2012
Hora 12:30 a 1:45 pm.

"El rediseño del programa Familias en Acción"

Lugar W-101
A cargo Roberto Angulo, Director de Ingreso Social del Departamento para la Prosperidad Social (DPS)
Descripción

Abstract:

Durante el año 2011, el programa Familias en Acción entra en una etapa de revisión de su diseño y operación. Después de 10 años de implementación, se considera necesario rediseñar el programa teniendo en cuenta los resultados de las evaluaciones, el cambio en el diagnóstico de pobreza que se viene dando en el país en la última década y la evolución de las instituciones para la reducción de la pobreza.
Por esto se plantea la necesidad de modificar el programa respetando los elementos que históricamente se han identificado como exitosos, pero introduciendo innovaciones que le permitan adaptarse a las demandas cambiantes de la sociedad. El nuevo programa se denomina Más Familias en Acción - (+ FA). La estructura funcional se conserva: sigue siendo un programa de transferencias monetarias condicionadas, con un elemento complementario de bienestar comunitario. Sin embargo, la estructura de pagos se modifica, para mejorar la progresividad geográfica de la transferencia y para combatir la creciente deserción escolar que se presenta en los últimos años de bachillerato. Además se introducen dos componentes adicionales: primero, el núcleo del programa se amplía para incluir a la población joven que se gradúa de educación media; segundo, se incorpora un componente de estrategias prioritarias.

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Archivo logo pdfRedisenoFeA_Uniandes.pdf 5,11 MB
Fecha 09/08/2012
Hora 12.30 a 1:45 pm

The school reentry decision of poor girls. Structural estimation and policy analysis using PROGRESA database.

Lugar W-102
A cargo María Nieves Valdés, Universidad Santiago de Chile
Descripción

Abstract

En este documento presento un modelo estructural dinámico de las elecciones de estudios de las niñas estimado utilizando información de la base de datos mexicana PROGRESA. Esta metodología estructural permite evaluar la efectividad de varias políticas tendientes a incrementar las tasas de reingreso a la escuela de niñas de hogares de ingresos bajos. Para incrementar la asistencia a la escuela entre niños pobres en países en desarrollo, los encargados de la formulación de políticas han puesto en marcha programas de transferencias condicionales. Si bien las transferencias han sido bastante exitosas para mantener a las niñas en la escuela, tienen un impacto menor y relativamente bajo en incrementar la asistencia entre niñas que han abandonado los estudios. Los programas de transferencia de dinero pueden fallar porque la mayoría de estas niñas pobres abandonan la escuela para quedarse en sus casas ayudando con el trabajo doméstico, en vez de trabajar por un salario. Los resultados sugieren que políticas efectivas para incrementar el reingreso a la escuela para niñas pobres son incrementos considerables en el monto de la subvención, acceso gratuito a guarderías y jardines infantiles comunales y generalizar la disponibilidad de escuelas secundarias.

Archivo logo pdfValdes_Structural.pdf 405,62 kB
Fecha 31/07/2012
Hora 12:30 a 1:45 pm

Derechos y fines políticos

Lugar W-102
A cargo Rodolfo Arango Rivadeneira, Departamento de Filosofía - Universidad de los Andes
Descripción

Abstract:

Recientemente se modificó el corazón del modelo económico constitucional (artículo 334 de la Constitución) para introducir un incidente fiscal y conciliar el reconocimiento judicial de derechos con la estabilidad económica de las finanzas del Estado. En otro frente, en el fracasado pero aún no sepultado proyecto que reforma la ley de educación superior se define ésta como un derecho, un bien público meritorio y un servicio público. Ambos casos son ejemplo de la difícil relación entre derechos y fines políticos. La conferencia examina algunos criterios para diferenciar ambos términos extraídos de filosofía política y la teoría constitucional, criterios que permiten clarificar sus posibles relaciones. Se concluye que tanto en el caso de la reforma al 334 como de la definición de educación superior se cometen errores conceptuales con graves implicaciones para la justicia y la democracia.

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Fecha 22/05/2012
Hora 12:30 a 1:45 pm.

The Need for Enemies

Lugar W-102
A cargo Leopoldo Fergusson, Facultad de Economía - Universidad de los Andes
Descripción

Coautores: James A. Robinson, Ragnar Torvik y Juan F. Vargas

Abstract:
We develop a political economy model where some politicians have a comparative advantage in undertaking a task and this gives them an electoral advantage. This creates an incentive to underperform in the task in order to maintain their advantage. We interpret the model in the context of fighting against insurgents in a civil war and derive two main empirical implications which we test using Colombian data during the presidency of Álvaro Uribe.

First, as long as rents from power are sufficiently important, large defeats for the insurgents should reduce the probability that politicians with comparative advantage, President Uribe, will fight the insurgents. Second, this effect should be larger in electorally salient municipalities. We find that after the three largest victories against the FARC rebel group, the government reduced its efforts to eliminate the group and did so differentially in politically salient municipalities. Our results therefore support the notion that such politicians need enemies to maintain their political advantage and act so as to keep the enemy alive.

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Fecha 08/05/2012
Hora 12:30 a 1:45 pm

"Job insecurity and life projects: the role of dismissal barriers institutions"

Lugar W-102
A cargo Juan A. Lacomba y Francisco Lagos, Department of Economics, Globe, University of Granada.
Descripción

Coautores: Ramón Cobo-Reyes y Natalia Jiménez

Abstract:
Labor market uncertainties, such as term-limited working contracts, unstable employment situations or high unemployment rates, affect some of the main (and sometimes irreversible) decisions in life. In this paper, we show experimentally how the presence of dismissal barriers in the labor market changes the decisions on these life projects. Results confirm that what matters for this kind of decisions is not only the current income position but also expectations about future income. The findings of this article shed light in two different dimensions: on one hand, we show how the presence of dismissal barriers in labor markets may provide a safer institutional setting to undertake life projects more successfully; on the other hand, we find that dismissal barriers can enhance the market efficiency if they are linked to workers’ performance.

Fecha 24/04/2012
Hora 12:30 a 1:45 pm.

Inequality in National Inter-Generational Transfers: Evidence from Colombia

Lugar W-102
A cargo Jorge Tovar, Facultad de Economía - Universidad de los Andes
Descripción

Coautor: Piedad Urdinola

Abstract:
Public transfers are designed with the idea of reducing poverty and inequality among specific population groups. The National Transfers Account methodology suggests the use of household education (HHE) as poverty proxy in the construction of profiles by socio-economic status. Considering the higher levels of inequality in developing countries we construct and check inequality and intergenerational transfers using an alternative measure based on variables not endogenous to the underlying idea of intergenerational transfers: a Multidimensional Quality of Life Index (MQLI). We apply the methodology to a developing country, Colombia, and show that inequality and disparities in intergenerational transfers are best understood when using the MQLI.

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Fecha 17/04/2012
Hora 12:30 a 1:45 pm.

Can Consumers Complaints Reduce Product Reliability?

Lugar W-102
A cargo Joaquín Coleff, Facultad de Economía - Universidad del Rosario
Descripción

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Fecha 10/04/2012
Hora 12:30 a 1:45 pm.

The Effect of Medicaid on Children's Health: A Regression Discontinuity Approach

Lugar W-102
A cargo Dolores De La Mata, Facultad de Economía-Universidad del Rosario
Descripción

Abstract:
I estimate the causal impact of Medicaid on children's health care utilization and their subsequent health outcomes using a Regression Discontinuity design. I exploit the discontinuity generated by Medicaid's eligibility rule, based on family income, on program participation rates. In contrast with a standard regression discontinuity approach, here there are multiple eligibility thresholds that vary across states. Using data from the Panel Study of Income Dynamics and its Child Development Study supplement, first, I find that Medicaid increases the use of preventive medical care. The effect is positive and significant only at low thresholds, between 100% and 185% of the poverty line, but not at high thresholds, between 185% and 250% of the poverty line. Second, I find that Medicaid has a null or even negative impact on health outcomes in the medium run. It increases the probability of being obese and it reduces the probability of being in excellent health. The negative effects are persistent between 1 and 2 years after being eligible, and then they vanish, and they appear both at low and high eligibility thresholds. The evidence suggests that perception effects, quality effect, waiting periods, and negative consumption effects may generate these results.

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Fecha 27/03/2012
Hora 12:30 a 1:45 pm.

Turnout, Political Preferences and Information: Experimental Evidence from Perú.

Lugar R-111
A cargo Gianmarco Leon, Department of Agricultural and Resource Economics, University of California, Berkeley.
Descripción

Abstract:
Electoral institutions that encourage citizens to vote are widely used around the world. Yet little is known about the effects of such institutions on voter participation and the composition of the electorate. In this paper, I combine a field experiment with a change in Peruvian voting laws to identify the effect of fines for abstention on voting. Using the random variation in the fine for abstention and an objective measure of turnout at the individual level, I estimate the elasticity of voting with respect to cost to be -0.21. Consistent with the theoretical model presented, the reduction in turnout is driven by voters who (i) are in the center of the political spectrum, (ii) are less interested in politics, and (iii) hold less political information. However, voters who respond to changes in the cost of abstention do not have different preferences for policies than those who vote regardless of the cost. Further, involvement in politics, as measured by the decision to acquire political information, seems to be independent of the level of the fine. Additional results indicate that the reduction in the fine reduces the incidence of vote buying and increases the price paid for a vote.

Archivo logo pdfLeon-CostVoting-Jan2012.pdf 2,15 MB
Fecha 22/03/2012
Hora 12:30 a 1:45 pm.

"Buying Votes with Imperfect Local Knowledge and a Secret Ballot"

Lugar W-102
A cargo Miguel R. Rueda, Department of Political Science, University of Rochester
Descripción

Abstract:
I present a model of vote buying in which the party that bribes the voters does not observe their individual preferences or individual votes. Compliance is achieved by conditioning future bribes on whether the party's votes reach an optimally-set threshold. This monitoring mechanism generates a collective action problem among bribed voters that explains two findings in empirical studies: bribed voters comply if they believe others are doing the same, and compliance is harder to sustain in large populations. The model also shows that it is easier for parties to induce compliance of members of groups whose utility depends on the welfare of other members. This is consistent with the observed tendency of parties to target payments to groups with strong social ties among their members.

Fecha 20/03/2012
Hora 12:30 a 1:45 pm.

Monetary Policy and the Great Inflation: A Multi-Country Time-Varying Analysis Using the Taylor Rule

Lugar W-101
A cargo Anastasia Zervou, Department of Economics, Texas A&M University.
Descripción

Abstract:

This paper is motivated by the observation that the Great Inflation of the 1970's was an international phenomenon, and thus an explanation should be consistent with the timing of the events not only in the US, but in other developed countries too. We study an econometric model for examining monetary policy's responsibility in the developed world, gathering information from the cross sectional dimension that the international experience offers. We examine how the weights in a forward-looking Taylor-type of rule change over time for various developed countries. We explore whether these countries implemented similar changes to their policies during the period of the Great Inflation and later. We find that monetary authorities in our sample of countries responded mildly to inflation until almost the mid 1980's, after which they systematically fought it. Furthermore, we find that the correlation of the policy changes in response to inflation across countries is positive. Our empirical results indicate that the commonality in the way monetary authorities, among otherwise different economies, respond to inflation may be responsible for the common inflation patterns observed during the Great Inflation era. We point to the view that common ideas influence monetary authorities around the world, guiding them towards accommodative policies during the 1970’s and towards tighter policies after that.

Fecha 15/03/2012
Hora 12:30 a 1:45 pm.

The effects of oil and mineral taxation on non-commodity fiscal revenues

Lugar W-102
A cargo Guillermo Perry, Facultad de Economía - Universidad de los Andes.
Descripción

Coautor: Sebastián Bustos

Abstract:

This paper uses panel data of 158 countries to estimate the effects of oil and mineral wealth on the volatility non-commodity fiscal revenues and the channels through which these effects take place. We find, first, that non-commodity fiscal revenues are indeed more volatile in countries richer in oil and minerals and with higher fiscal revenues derived from these activities. Second, we find that this effect reflects more a direct substitution effect (non-commodity fiscal revenues are discretionary reduced when oil and mineral revenues increase) than a positive indirect effect through increased public expenditures and its effect on economic activity and non-commodity tax revenues (e.g., the two types of revenues tend to move in opposite directions). This finding has implications for the volatility of public expenditures and the effectiveness of automatic tax stabilizers and it is very robust to different specifications and controls (it is mitigated, but does not disappear with better quality of institutions), except when we restrict the estimation to only Latin American countries, where the direct substitution effect appears to be weaker. Third, we find that non-commodity revenues respond asymmetrically to positive or negative shocks in oil and mineral taxes.

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Fecha 13/03/2012
Hora 12:30 a 1:45 pm.

Endogenous Income Distribution and Optimal Taxation in Economies with a Local Public Good

Lugar W-102
A cargo David Bardey, University of Rosario and Toulouse School of Economics (GREMAQ).
Descripción

Coautores: Fernando Jaramillo y Fabien Moizeau

Abstract:
We develop a multijurisdiction model where individuals are heterogenous with respect to their productivity level. The key feature of the framework is that before moving to a particular jurisdiction where the amount of local public good is determined by the median voter, individuals choose their level of labor supply. Our findings suggest that the equilibrium income distribution is a set of intervals each one corresponding to a particular jurisdiction. Moreover, our results point out that such a stratified equilibrium is characterized by discontinuities in the income distribution. Roughly speaking, two individuals who are close in the productivity ladder may earn dramatically different labor incomes if they do not live in the same jurisdiction. We also study the planner's problem and characterize optimal allocations. Finally, we study the design of the tax structure such that equilibrium allocations and optimal ones coincide. In particular, the tax structure is such that externatilities generated by free mobility of individuals are internalized.

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Fecha 06/03/2012
Hora 12:30 a 1:45 pm.

Meritocracy for Teachers: Evidence from Colombia

Lugar W-101
A cargo Alejandro Ome, University of Chicago.
Descripción

Abstract:

In 2002 the Colombian government issued a new code that changed the hiring, promotion and termination policies in the teaching career, introducing meritocratic components to it. Because teachers hired before 2002 can remain under the ‘old’ code or switch to the new one, the percentage of teachers under the new code varies considerably across schools; this source of variation is used to identify the effect of the policy on students’ outcomes. I analyze two types of outcomes: permanence in the school system, measured by dropout rates at elementary and secondary schools; and achievement, measured by standardized test scores in math and language at 5th and 9th grades (the SABER exams). Using administrative data I built a panel of public schools in order to estimate a school-fixed effects approach, which controls for observable and unobservable characteristics at the school level. The results indicate that the presence of teachers under the new code has a significant and negative effect on dropout rates especially in secondary schools. Regarding test scores I found no effects except for 9th grade math, where there is a positive and significant effect of approximately one fifth of a standard deviation.

Fecha 01/03/2012
Hora 12:30 a 1:45 pm.

“Conditional Cash Transfers, Political Participation, and Voting Turnout”

Lugar W-102
A cargo Emily Conover, Hamilton College.
Descripción

Coautores: Javier Báez, Adriana Camacho, Roman A. Zárate.

Abstract:
We estimate the effect of enrollment in a CCT program, Familias en Acción FA, on the intent to vote and on electoral choice. We use variation across voting booths and discontinuities in program eligibility. We find that relative to non-participants, FA beneficiaries (of voting age) are more likely to register to vote and more likely to vote for the incumbent party under which the program was expanded. Additionally we evaluate how the remaining number of years in FA and the number of year already enrolled affects beneficiary households´ political participation. The size of these effects does not explain the final outcome of the presidential elections, but their direction indicates that CCTs may mobilize people to vote and influence their electoral choice.

Fecha 28/02/2012
Hora 12:30 a 1:45 pm.

"Dynamic Scoring in a Romer Style Economy"

Lugar SD-703
A cargo Dean Scrimgeour; Assistant Professor of Economics Colgate University
Descripción

This paper explores the dynamic behavior of a Romer-style endogenous growth model, analyzing how changes in tax rates affect government revenue in the short run and the long run. I show that in this environment lowering taxes on financial income is unlikely to stimulate tax revenue in the long run and has modest effects on the tax base, contrary to some other studies of the dynamic response of revenue to tax rates. Calibrations of the model that suggest Laffer curve effects can be substantial require implausibly low values for the elasticity of substitution between varieties of intermediate goods. For more plausible parameter values, I find that around 20% of a tax cut would be self-financing due to an expansion in the tax base.

Archivo logo pdfdynamicscoring.pdf 422,87 kB
Fecha 23/02/2012
Hora 12:30 a 1:45 pm.

Consequences of Colonial Rule for Development in Sierra Leone

Lugar W-102
A cargo James Robinson; Harvard, Profesor Visitante Uniandes
Descripción

The lowest level of government in most of Sub-Saharan African countries are chiefs who raise taxes, control the judicial system and allocate the most important scarce resource - land. Chiefs are often credited with despotic power which inhibits the development potential of rural areas. In this paper we exploit the colonial history of Sierra Leone to develop an instrument for the power of chiefs. In particular, the British government created an aristocracy, the ruling families, whose number was idiosyncratic across chieftaincies. Since a chief had to come from one of these ruling families, chiefs were more powerful (faced less competition) in places with fewer ruling families. We show that places with fewer ruling families and more powerful chiefs have significantly worse development outcomes today. Moreover, we show that the power of chiefs is uncorrelated with social capital but is positively correlated with participation in accountability institutions which we argue is due to the fact that these are captured by powerful chiefs. Finally we show that the greater the power of chiefs, the greater is the incidence of civil war which raged in Sierra Leone in-between 1991 and 2001. Our results support the view that the civil war was created by `grievances' specifically opposition by young men against the tyranny of powerful chiefs.

Fecha 21/02/2012
Hora 12:30 a 1:45 pm.

Experimental Subjects Are not Different

Lugar W-102
A cargo Filippos Exadaktylos, U. de Granada (España)
Descripción

Coautores: Pablo Brañas-Garza y Antonio M. Espín

Abstract:
Economic experiments are usually conducted with university students who voluntarily choose to participate. Outside as well as within the discipline, there is some concern about how this “particular” subject pool may systematically produce biased results. Focusing on social preferences, this study employs a representative sample of a city’s population and reports behavioral data in five experimental decisions. The dataset allows for a ceteris paribus comparison between self-selected students (i.e. the standard subject pool) and the representative population. The results clearly demonstrate that experimental subjects in economics are not different.

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Fecha 14/02/2012
Hora 12:30 a 1:45 pm.

Borrowing Constraints, Collateral Fluctuations, and the Labor Market.

Lugar W-101
A cargo Julio Garín, Department of Economics, University of Notre Dame
Descripción

Abstract:
This paper studies the effects of imperfections in the financial sector on the cyclical properties of unemployment and job creation. I develop a general equilibrium model with capital accumulation in which labor market frictions prevent the costless adjust- ment of employment. Financial frictions arise from an imperfect enforcement contract, which links a firm’s ability to borrow to the value of its collateralizable assets. I find that while productivity shocks account primarily for fluctuations in investment and output, exogenous changes in collateral requirements are important in driving fluctuations in labor market variables. The model can account for the persistent reduction in both output and leverage that follows a contraction in credit availability. Furthermore, it is able to explain 80% of the variation in job creation observed in the data.

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Archivo logo pdfJulioGarin_Paper_Borrowing_Constraints_Collateral_Fluctuations.pdf 491,15 kB
Fecha 09/02/2012
Hora 12:30 a 1:45 pm.

Endogenous fertility policy and unfunded pensions

Lugar W-102
A cargo Facundo Sepúlveda, Associate Professor, Departamento de Economía-Universidad de Santiago de Chile
Descripción

Abstract
We study the joint determination of fertility subsidies and Social Security taxes in an overlapping generations model where agents are heterogeneous in endowments. In equilibria where Social Security is valued, old and poor young agents form a coalition that sustains Social Security. When voting for fertility subsidies, the young take into account both the deadweight loss of such subsidies and the gains from a higher future tax base. They also take into account a third effect of increasing population growth: that of a decrease in future Social Security benefits as a consequence of a change in the identity of the future decisive voter.

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Archivo logo pdfFacundo_Sepulveda-Fertility.pdf 166,63 kB
Fecha 07/02/2012
Hora 12:30 a 1:45 pm.

Motivating Information Acquisition in Strategic Settings

Lugar W-102
A cargo Andrés Zambrano, UCLA - Department of Economics.
Descripción

Abstract

Successful innovators have become billionaires by generating technologies that are later widely adopted in the society. This paper proposes a model of delegated expertise to explain why this is (constrained) efficient. To develop intuition, I first study the optimal design of contracts when a principal delegates a decision to a single agent of whether to pursue a risky project or a safe one. Before taking the decision, the agent can acquire unobservable information about the risky project by exerting an unobservable effort that determines the quality of the information. The optimal contract suggests that the principal should reward the agent for outcomes that are significantly better than the safe return to encourage more information acquisition and the selection of the desired project by the principal. I then apply this structure to study the problem faced by a group of agents when the acquired information becomes public, and thus it creates incentives for free-riding. The optimal contract splits the total returns among experimenters when the unknown project yields significantly greater returns than the safe project, thus increasing the rate of adoption of new technologies and resembling the observed pay structure for innovators.

ver documento

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Fecha 31/01/2012
Hora 12:30 a 1:45 pm.

"Bargaining in Dynamic Markets with Multiple Populations"

Lugar W-101
A cargo Mihai Manea, Department of Economics – MIT
Descripción

Abstract:

We study dynamic markets in which participants are randomly matched to bargain over the price of a heterogeneous good. There is a continuum of players drawn from a finite set of types. Players exogenously enter the market over time and then exit upon trading. At every date, the matching probabilities for each pair of types are endogenously determined by the distribution of players in the market. A player’s bargaining power at any stage depends on intra- and inter-temporal variations in the potential gains from trade, the feasible agreements at future dates, and the induced distribution of bargaining partners. We establish that an equilibrium always exists. Moreover, all equilibria that feature the same evolution of the macroeconomic variables are payoff equivalent. However, we show that multiple self-fulfilling expectations about the trajectory of the economy, generating distinct equilibrium dynamics and payoffs, may coexist. We also prove the existence of steady states in stationary environments. Our analysis extends and complements several models of bargaining in markets.

(http://econ-www.mit.edu/faculty/manea)

Archivo logo pdfManea6783.pdf 326,73 kB
Fecha 26/01/2012
Hora 12:30 a 1:45 pm.

"The effects of oil and mineral taxation on sector performance"

Lugar W-102
A cargo Guillermo Perry, Facultad de Economía - Universidad de los Andes
Descripción

Coautor: Sui Jade Ho.

Abstract:

This paper uses panel data on 41 oil and mineral rich countries (defined as such according to IMF criteria) to estimate the potential effects of total tax ratios on oil and mineral investment and production. To capture potential effects of the quality of oil and mineral taxes, we also estimate the effects of the interaction of total sectoral tax ratios with indexes of the quality of oil tax regimes and of the overall quality of country institutions. Using these results and DEA estimates, we then attempt to benchmark the efficiency of oil and mineral taxation and institutional regimes in Latin American.

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Archivo logo pdfGperry_Effects_of_oil_and_mineral_taxation.pdf 384,44 kB
Fecha 24/01/2012
Hora 12:30 a 1:45 pm.

end faq