Exchange Rates, Currency Crises and Recessions - Introduction

Business Cycles, Currency Crises, Developing Countries, Early-warning Systems, Exchange Rate Regimes, Floats, Growth Regressions, Hard Pegs, Openness, Recessions, Volatility

Inversión Privada e Impuestos Corporativos: Evidencia para Chile

Using annual data from Chile since the beginning of the eighties, we show that an increase in the corporate tax reduces firm's investment. However the impact differs across firm size. In small and medium firms, investment as a fraction of the capital stocInvestment, small size firms, corporate taxation

Currency Crises: Is Central America Different?

In a recent paper we analyzed the determinants of currency crises in a sample of 30 high and middle income countries (Esquivel and Larraín, 1998). In this work we focus on Central America and analyze whether the determinants of currency crises in this region are different from those identified in our previous work. We conclude that they are not, and show that a small set of macroeconomic variables helps to explain the currency crises that took place in Central America between 1976 and 1996. The results of tests applied here support the empirical approach that attempts to explain currency crises by focusing on the behavior of a few macroeconomic indicators. Part of the interest of this result stems from the fact that the Central American countries had an exchange rate system markedly different from that prevailing in the economies that are usually analyzed in similar studies.Central America, exchange rate, currency crises, financial crises

Resource windfalls and public sector employment: evidence from municipalities in Chile

We study the effect of extra resource revenues on employment expenditures at the municipal level in Chile. We exploit a novel quasi-experiment: a legal reform in 2005 that increased the portion of the income collected from mining licenses that is assigned to municipalities where mines operate from 30 to 50 percent. Our main result is a statistically significant expansion of municipal employment expenditures in mining municipalities, driven by expenditures on long-term employment. Additionally, we found a meaningful effect on allowances to the municipal council, but we did not find a robust impact on transfers to health, transfers to community programs, or municipal investment, while the increase in transfers to education is small with respect to the employment expenditures effect. These results are complemented by evidence of an increase in the mayor’s probability of reelection not related to the provision of public goods, which links our findings with the clientelism mechanism of resource rents. Our results also have several implications for the fiscal decentralization debate in resource-abundant economies

Inversión Privada e Impuestos Corporativos: Evidencia para Chile

Basado en información microeconómica, este trabajo provee evidencia acerca del impacto de la tributación corporativa sobre la inversión. Utilizando datos para Chile, mostramos que un aumento de 10% en la tasa de impuesto corporativo reduce la inversión como fracción del stock de capital entre 0.2% y 1% bajo diferentes especificaciones econométricas. Este impacto difiere dependiendo del tamaño de la compañía. En pequeñas y medianas empresas el efecto es mucho mayor y altamente significativo: la inversión como fracción del stock de capital declina entre 0.5% y 1.6%. En las empresas grandes el impacto no es significativo.

El Caso del Dinero Desaparecido Chile 1984-1986

Between the third quarter of 1984 and the second one of 1986, Chile's real money balances (seasonally adjusted, real MI) decreased by 11%. In the same period, Gross Domestic Product grew by 12.3% and the effective short-term interest rate systematically d

El Retorno de los Capitales Privados a América Latina en la Década de los Noventa

After a decade of almost complete financial isolation from world private capital markets, Latin America became an effective magnet for private capital in the 1990s. Capital returned to the region in many different forms, but foreign direct investment and