Micro Efficiency and Aggregate Growth in Chile

Using plant-level data on Chilean manufacturing firms for the 1980-2001 period, we estimate and characterize disaggregate total factor productivity. We use these estimates to study the microeconomic sources of aggregate efficiency, a fundamental part of aPlant dynamics, total factor productivity, growth, chilean manufacturing

The Dynamics of Earnings in Chile

This paper provides an empirical analysis of individual earnings using data from the Encuesta Suplementaria de Ingresos. We find that the predictable component of income is hump-shaped over the life-cycle, and that there are strong education effects. The unpredictable component of income can be described by a very persistent permanent shock and a transitory shock. Our estimates are built from a panel of cohorts, so we use US data from the PSID to provide a magnitude for the underestimation of the estimated variances. Surprisingly, we find that the variance of the permanent shock is almost 4 times smaller in Chile than in the US, a result, perhaps, of the relative rigidity of the Chilean labor marketEarnings dynamics, income uncertainty

Slow Recoveries

Economies respond differently to aggregate shocks that reduce output. While some countries rapidly recover their pre-crisis trend, others stagnate. Recent studies provide empirical support for a link between aggregate growth and plant dynamics through its effect on productivity: the entry and exit of firms and the reallocation of resources from less to more efficient firms explain a relevant part of transitional productivity dynamics. In this paper we use a stochastic general equilibrium model with heterogeneous firms to study the effect on aggregate short-run growth of policies that distort the process of birth, growth and death of firms, as well as the reallocation of resources across economic units. Our findings show that indeed policies that alter plant dynamics can explain slow recoveries. We also find that output losses associated to delayed recoveries are large.

Market Reforms and Efficiency Gains in Chile

Starting in the mid 1970s, Chile implemented a deep and comprehensive set of structural market reforms. In spite of the wide agreement there is with respect to the benefits these reforms should have on growth, little evidence has been provided to empirically establish and to quantify this connection. Using plant-level data on Chilean manufacturing firms for the 1980-2001 period, we provide suggestive evidence of the role of structural reforms on plant efficiency. The paper first analyzes the behavior of aggregate total factor productivity constructed from data at the plant-level. We find that, once major reforms had been fully implemented, aggregate efficiency gains were explained in equal proportions by within plant improvements and by the net entry of new and more productive economic units. The reallocation among incumbent plants did not contribute significantly to the enhancement of efficiency. The paper also finds that within-plant efficiency gains were the largest among firms producing traded goods, and among firms that were more likely to face binding liquidity constraints. Thus, in Chile, the adoption of better technologies and production processes, fostered by broader foreign exposure and a superior access to external finance, seem to have at least partially accounted for the observed improvement in manufacturing performance.

Estimating Discount Functions with Consumption Choices over the Lifecycle

Intertemporal preferences are difficult to measure. We estimate time preferences using a structural buffer stock consumption model and the Method of Simulated Moments. The model includes stochastic labor income, liquidity constraints, child and adult dependents, liquid and illiquid assets, revolving credit, retirement, and discount functions that allow short-run and long-run discount rates to differ. Data on retirement wealth accumulation, credit card borrowing, and consumption-income comovement identify the model. Our benchmark estimates imply a 40% short-term annualized discount rate and a 4.3% long-term annualized discount rate. Almost all specifications reject the restriction to a constant discount rate. Our quantitative results are sensitive to assumptions about the return on illiquid assets and the coefficient of relative risk aversion. When we jointly estimate the coefficient of relative risk aversion and the discount function, the short-term discount rate is 15% and the long-term discount rate is 3.8%.

Self-Control and Saving for Retirement

macroeconomics, Self-Control, Saving, Retirement

Quench front progression in a superheated porous medium: experimental analysis and model development

In case of severe accident in a nuclear reactor, the fuel rods may be highly damaged and oxidized and finally collapse to form a debris bed. Removal of decay heat from a debris bed is a challenging issue because of the difficulty for water to flow inside. Currently, IRSN has started experimental program PEARL with two experimental facilities PRELUDE and PEARL, to investigate the reflood process at high temperature, for various particle sizes. On the basis of PRELUDE experimental results, the thermal hydraulic features of the quench front have been analysed and the intensity of heat transfers was estimated. From a selection of experimental results, a reflooding model was improved and validated. The model is implemented in the code ICARE-CATHARE developed by IRSN which is used for severe accident reactor analysis

Concentration, Hold-Up and Information Revelation in Bank Lending: Evidence From Chilean Firms

In this paper we empirically study bank-client relationships using a sample of Chilean manufacturing firms. We examine whether concentration and the duration of bank-firm relationships affect the volume of bank lending. Our results indicate that lower concentration, measured by the number of banks a firm borrows from, is associated with a large and positive effect on borrowing. The length of borrower-lender relationships has a positive -although not always statistically significant- effect on the amount borrowed.