Public investment in basic education and economic growth

The main objective of this paper was to visualize the relation between governmentspending on basic education and the human capital accumulation process, observingthe impacts of this spending on individual investments in higher education, and oneconomic growth. It is used an overlapping-generations model where the governmenttax the adult generation and spent it in basic education of the next generations. Itwas demonstrated that the magnitude of the marginal effect of government spendingin basic education on growth crucially depends on public budget constrains. The paperexplains why some countries with a lot of public investment in basic education growthat low rates. In that sense if a country has only a lot of public investment in basiceducation without investment in higher education it may growth at low rates becausethe taxation can cause distortions in the agents incentives to invest in higher education.

Crime and punishment with habit formation

Moral concepts affect crime supply. This idea is modelled assuming that illegal activities is habit forming. We introduce habits in a intertemporal general equilibrium framework to illegal activities and compare its outcomes with a model without habit formation. The findings are that habit and crime presents a non linear relationship that hinges upon the level of capital and habit formation. It is possible to show that while the effect of habit on crime is negative for low levels o habit formation it becomes positive as habits goes up. Secondly habit reduces the marginal effect of illegal activities return on crime. Finally, the effect of habit on crime depends positively on the amount of capital. This could explain the relationship between size of cities and illegal activity.

On the purchasing power parity for latin-american countries

The purpose of this paper is to test the hypothesis of long-run purchasingpower parity (PPP) for all Latin American countries. These countries sharesimilar economic history and contagious effects from currency crises, whichmight lead to comovements in their real exchange rates. New time series unitroot tests found evidence of PPP for the vast majority of countries. In thepanel data framework, tests for the null of unit root, null of stationarity, andunit root under multiple structural breaks indicated stationary real exchangerates. Thus, there is convincing evidence that PPP holds for Latin-Americancountries in the post-1980 period.

The potential to create employment and income from tourism in Brazil

The main objective of this paper is to asses the tourism activity in Brazil, and examine, particularly, its capacity to generate employment. To this aim an input output matrix, that considers the tourism as a set of sectors of the economy, was computed for the year 2006. This matrix made it possible to examine the main relationships between tourism and the rest of the economy. Forward linkages and backward linkages of the tourism sector were computed. In addition, the effects of the development of the tourism sector on income and employment were analyzed and compared in this respect with the average of the Brazilian economy.Tourism; Tourism Economic; Input-output Model; Employment and Income; Brazil

Contrasting monetary policies within the MERCOSUR experiment

The formation of global markets has become, not unsurprisingly, a matter ofintense concern for many developing countries, fearful for their own economic and political survival as autonomous entities in the "new world economic order" As a result of this concern, many developing countries are seeking security by forming regional economic blocs, involving trading agreements and preferences and, in some cases, plans for eventual monetary union. This paper examines the Latin American regional integration experience, specifically the Common Market of the South (Mercado Comun del Sur or MERCOSUR), focusing on macroeconomic monetary policies implemented by Argentina and Brazil the major MERCOSUR'S member countries

POLÍTICA MONETÁRIA ÓTIMA EM UM CONTEXTO DE ELEVADA DÍVIDA PÚBLICA: O CASO DO BRASIL

This paper calculates the optimal monetary policy rule for Brazilian economy, assuming that monetary authority adopts a flexible inflation targeting regime in which, besides the inflation target, there is also a target for public debt/GDP ratio. According to the open economy proposed model, risk premium is generated by high public debt. After estimating the parameters, Bellman equation is applied to determine the optimal monetary policy rule. Results suggest that when a target for public debt/GDP is taken into account in the loss function, monetary policy responds less aggressively to inflation shocks, while easing monetary policy becomes optimal response to positive shocks to public debt and risk premium.