The Finance–Growth Link Revisited and the Role of Institutions as a Source of Finance in Latin America

In a panel framework that includes 18 countries, this paper studies the short and long run effect of financial development on economic growth and the determinants of financial development in Latin America. Financial development shows a positive effect on economic growth in the long run, but a negative effect in the short run for the full sample. When the sample is divided by income levels, this result holds only for the high income group. For the low income group, financial development has no significant effect on economic growth in the short run or in the long run. In the analysis of the determinants of financial development in Latin America, greater financial openness and lower country risk are associated with higher levels of financial development. From the components of the country risk index (financial, economic, and political risk) only the political risk index comes up positively significant. From the components of the political risk index, only law and order and government stability have a positive significant effect on financial development

Latin America and the Financial Crisis of 2008: Lessons and Challenges

In October of 2008 there were two main views of what the financial crisis would do to emerging countries in Latin America. The optimistic view predicted that they would do well overall and that the crisis would not have a significant impact on them because their economies were decoupled from the rest of the world. The pessimistic view saw these economies as vulnerable to the financial crisis, which meant they would become unstable and perform poorly. Over a year later, the outcome is something in between. This article will explain the current state of the financial crisis in Latin America and the policy responses of various Latin American countries. Brazil, Mexico, and Chile, will be highlighted because they present very interesting cases. These examples are important when discussing lessons and challenges in Latin America. The idea is to focus on what these Latin American countries have done that has allowed them to perform relatively well during the crisis, and discuss what challenges policy makers in the region are facing today and will face in the future

Life is Unfair in Latin America, But Does it Matter for Growth?

I analyze the effect of inequality on economic growth in Latin America, where inequality is measured as the area of family farms as a percentage of the total area of agricultural holdings. Using data from 18 Latin American countries between 1960 and 2004, I find that inequality has a nonlinear effect on economic growth. Overall, for the countries included in this analysis, the share of family farms has a positive significant effect on economic growth. These findings are robust to controlling for several factors, using a different indicator of inequality (land Gini), and addressing for endogeneity

The Impact of Insecurity on Democracy and Trust in Institutions in Mexico

Using survey data from the Latin American Public Opinion Project (LAPOP) and Encuesta Nacional Sobre la Inseguridad (ENSI) for Mexico during the period 2004-2010, this paper analyses the impact of insecurity and crime victimization on support and satisfaction with democracy and trust in institutions. With the LAPOP data, perceptions about higher insecurity decrease support and satisfaction with democracy. Perceptions of insecurity and crime victimization have a negative significant effect on trust in institutions, and this finding is robust to using LAPOP and ENSI data. Perceptions of insecurity and crime victimization have a larger negative effect on trust in institutions that directly deal with crime, such as the police and judicial system. Data also shows that those states with higher drug trafficking activity show lower trust in institutions, and that trust in institutions has deteriorated over time at a faster pace in the northeast and northwest regions

The impact of spatial interdependence on FDI in Latin America

This analysis considers whether spatial interdependence is an important determinant of foreign direct investment (FDI) in Latin America. Two types of spatial interdependence are explored: 1) surrounding market potential and 2) spatial autocorrelation of FDI. Using a sample of 17 Latin American countries, with observations from 1986 to 2006, we find that spatial interdependence matters for world net FDI in the region. Surrounding market potential has a positive effect on FDI of significant magnitude, but there is no evidence that FDI is spatially autocorrelated. Other contributors to FDI in this analysis include governance, specifically control of corruption, and exports of raw materials. We find differences in contributors to American FDI in the region. When considering only American FDI, we find that FDI is spatially autocorrelated, and that surrounding market potential is not significant when the spatially lagged dependent variable is included in the model

The Finance–Growth Link in Latin America

This paper analyzes the relationship between financial development and economic growth in Latin America with a Granger causality test and impulse response functions in a panel vector autoregression model. Using annual observations from a sample of 18 countries from 1962 to 2005, it is shown that while economic growth causes financial development, financial development does not cause economic growth. This finding is robust to different model specifications and different financial indicators. Interestingly, when the sample is divided according to different income levels and institutional quality, there is two way causality between financial development and economic growth only for the middle income group and for countries with stronger rule of law and creditor rights. The impulse response functions show that a shock to financial development has a positive impact on economic growth only for these subsamples, but the net effect of financial development on growth is relatively small

Amb quins criteris el professorat valora un projecte d'innovació de física en context?

L'objectiu principal d'aquest treball ha estat investigar amb quins criteris el professorat valora l'aplicació d'un projecte de física en context, analitzant la seva contribució al desenvolupament de les capacitats recollides en les finalitats i els objectius del batxillerat

Com prendre consciència de la contaminació sonora. Realització de treballs de recerca sobre el tema

A partir de les activitats proposades amb motiu de l'Any Internacional de la Física, durant dos cursos consecutius hem realitzat treballs de recerca relacionats amb la contaminació acústica. El primer amb l'objectiu de determinar el nivell acústic de Berga i el segon per estudiar els sorolls als que està sotmès un jove de secundària d'aquesta ciutat en les se-ves activitats quotidianes

Essays on economic development in Latin America.

Chapter Three empirically analyzes the effect of inequality on economic growth in Latin American countries. I use the area of family farms as a percentage of total agricultural holdings as a measure of inequality. In a sample of 18 Latin American countries from 1960 to 2004, I find a nonlinear effect of inequality on growth. This finding implies that the effect of equality on growth depends on the current levels of resource distribution, where the effect of equality on growth is increasing up to a certain level, after this level, the effect on growth is decreasing. For the purpose of robustness, I use a different measure of inequality that takes into consideration the distribution of agricultural and non-agricultural resources and address for endogeneity. I find that the nonlinear effect of inequality on growth is robust to these different approaches. In addition, I find that those countries that are highly urbanized benefit the most from increases in equality in terms of the share of family farms.Chapter Two presents an analysis of the causal relationship between financial development and economic growth in Latin America. There is a big debate on whether financial development causes growth or vice versa, and there are few empirical tests on this relationship at the regional level. The analysis of the relationship between financial development and economic growth in Latin America is important since countries in this region experienced improvements in their financial sectors, but they are still financially underdeveloped. Using a sample of 13 Latin American countries from 1961 to 2004, I find that there is a bi-directional causality between financial development and economic growth. Nonetheless, once the sample is divided by initial income levels, I find that the bi-directional causality between financial development and economic growth only holds for countries with higher initial income levels. For those countries with lower initial income levels, evidence shows that financial development follows economic growth and that financial development does not cause economic growth.Chapter One studies the determinants of political instability in Latin America. In this analysis, political instability is measured with the first principal component of nine variables related to political instability: assassinations, coups, government crises, anti-government demonstrations, riots, strikes, purges, guerrilla activity, and revolutions. This measure of instability is appropriate since I show that it closely matches historical events and conditions in Latin American countries during the period of analysis. Using a sample of 18 Latin American countries from 1971 to 2000, I find three important results. First, countries with higher democracy scores tend to experience less instability, while those with factionalized political parties are more unstable. Second, I find that income inequality, ethnic fractionalization, and urbanization have a nonlinear effect on instability. I show that increases in income inequality raise instability up to a point, after which any further increases lower instability. Ethnic fractionalization and urban growth have the opposite effect, whereby initial increases in either decreases instability up to a point, after which any further increases produce higher levels of instability. Third, I find that the only macroeconomic factor that has a significant impact on instability is trade openness, where an increase of this measure promotes political stability.From this research, there are three main implications for policymakers. First, Chapter One provides a good overview on what policymakers could do to decrease political instability in Latin America. The strengthening of democracy, a more equally distributed society, and further trade liberalization can promote stability in the region. Second, from the empirical analysis in Chapter Two, it can be concluded that financial reforms will not necessarily have the same effects in all Latin American countries. The positive effects of financial development on growth only hold for those countries with initial high income levels. Policymakers must take this into consideration, since there may be other complementary institutions that allow financial development to positively affect growth. Third, Chapter Three shows that inequality, in terms of resource distribution, has a nonlinear effect on growth. This is relevant since it is shown that the majority of Latin American countries are currently at levels of resource distribution where increases in equality produce greater economic growth. Policies that promote agricultural activity at a small scale are beneficial for the region. Another important implication is that policies which promote a more equal distribution of human capital will also result in higher economic growth in the majority of the Latin American countries included in the analysis.This dissertation studies three different aspects related to economic development in Latin America. I analyze the causes of political instability, the relationship between financial development and economic growth, and the effect of inequality on economic growth in Latin America. The findings from this empirical research are relevant for policymaking in the region