The Empirical Relevance of a basic sticky-price intertemporal model

In this paper, we first outline the monetary version of the sticky price intertemporal model of Obstfeld and Rogoff (1995, 1996), in which monetary shocks unambiguously generate apermanent nominal exchange rate depreciation and a temporary current account surplus. Wethen empirically investigate these theoretical predictions in two structural VAR systems for15 OECD countries over the period 1979-1999, using the long-run restriction identificationscheme suggested by Clarida and Galì (1994). Our empirical findings support the mainpredictions of the basic model, as well as suggesting that monetary shocks play an importantrole in the current account fluctuations. Moreover, we find that more open economies showgreater sensitivity of the current account to monetary shocks.

Discretionary Fiscal Policy: Review and Estimates for the EU

We briefly review the theoretical and empirical consequences of discretionary fiscal policy changes, after which we provide our own estimates for the EU countries. A fiscal expansion raises output and consumption and reduces the trade balance. Moreover, the stimulating effect of higher government purchases is weaker and the trade balance reduction is larger for more open EU economies, consistent with larger leakage effects. Further direct estimates suggest that fiscal expansions in large EU economies have non-negligible consequences for economic activity in the main trading partners. This provides a rationale for the concerted fiscal expansion recently initiated by the European Commission.

Trade Spillovers of Fiscal Policy in the European Union: A Panel Analysis

We explore the international spillovers from fiscal policy shocks via trade in Europe. A fiscal expansion stimulates domestic activity, which leads to more foreign exports and, hence, higher foreign output. To quantify this, we combine a panel VAR model in government spending, net taxes and GDP with a panel trade model. On average, a public spending increase equal to 1% of GDP implies 2.3% more foreign exports over the first two years. The corresponding figure for an equal-size net tax reduction is 0.6%. Both estimates are statistically significant. As far as the effect on foreign activity is concerned, a 1% of GDP spending increase (net tax reduction) in Germany on average raises GDP of trading partners by 0.23% (0.06%) over the first two years. These figures are likely to form lower bounds for the actual effects and suggest that it may be worthwhile to further investigate the benefits from coordinated fiscal expansions (contractions) in response to European-wide cyclical downturns (upswings).trade policy

Handwritten digit classification

Pattern recognition is one of the major challenges in statistics framework. Its goal is the feature extraction to classify the patterns into categories. A well-known example in this field is the handwritten digit recognition where digits have to be assigned into one of the 10 classes using some classification method. Our purpose is to present alternative classification methods based on statistical techniques. We show a comparison between a multivariate and a probabilistic approach, concluding that both methods provide similar results in terms of test-error rate. Experiments are performed on the known MNIST and USPS databases in binary-level image. Then, as an additional contribution we introduce a novel method to binarize images, based on statistical concepts associated to the written trace of the digitDigit, Classification, Images

Political pressures and exchange rate stability in emerging market economies

This paper presents a political economy model of exchange rate policy. The theory is based on a common agency approach with rational expectations. Financial and exporter lobbies exert political pressures to influence the government’s choice of exchange rate policy, before shocks to the economy are realized. The model shows that political pressures affect exchange rate policy and create an over-commitment to exchange rate stability. This helps to rationalize the empirical evidence on fear of large currency swings that characterizes exchange rate policy of many emerging market economies. Moreover, the model suggests that the effects of political pressures on the exchange rate are lower if the quality of institutions is higher. Empirical evidence for a large sample of emerging market economies is consistent with these findings.exporters and financial lobbies, exchange rate stability

La deserción en el nivel medio de la educación en la República Argentina. Cálculo de tasas de abandono e identificación de algunos factores que se le asocian

In this paper the Argentina's secondary school drop out is studied through two aspects: the estimation of the drop out rates by regions, sex and years, and the identification, by applying a mathematic model, of some factors that are significant to explain the likelihood of an student leaves school before finishing his studies. The data used to perform the estimations were taken outside the educational system, since they were provided by the Household Survey (and its Education Module) collected in 1998 by the National Statistic Office. Consistency between results that were obtained by using estimations based on Household Survey information and the indicators produced by the educational system, was acceptable, and, in addition, the former had the advantage of allowing to add other socioeconomic variables useful for the analysis. Results revealed that the drop out rate decreased up to the middle of the 60' decade, and then began an increasing trend that became heavy from the beginning of the 80' decade. They also have showed that rates differ significantly as differences between sex, and country regions were introduced. The applied logistic model allowed to select some risk variables that account for the probability of drop out. They were: vocation for studying, need to work, the student age at the moment of accessing to the secondary school, to repeat in primary level, type of secondary school, and sex.secondary school, dropout rate, logistic model

Essays on the transmission mechanism of monetary policy

Chapter 1: The monetary version of the sticky price intertemporal model of Obstfeld and Rogoff (1995, 1996), in which unexpected and expansive monetary shocks unambiguously generate a permanent nominal exchange rate depreciation and a temporary current account surplus, is outlined. After discussing some extensions of the basic model and verifying the lack of robustness of the main theoretical predictions to the introduction of alternative assumptions, the chapter provides an empirical investigation of the role of nominal disturbances for current account and real exchange rate fluctuations within a structural VAR approach for 15 OECD countries over the period 1979-1998, using the long-run restriction identification scheme suggested by Clarida and Gali (1994). The main empirical findings suggest that nominal shocks tend to have a significant role in generating temporary current account surpluses and that these effects are proportional to the degree of openness of the country. Chapter 2: Housing systems, as a major sector of industrialised economies, might have profound effects on the transmission mechanism of monetary shock. Despite a progressive convergence, however, EU countries still differ significantly in their housing and credit market institutions. This chapter provides a theoretical discussion of the ‘housing market’ channels of the monetary transmission mechanism (MTM) and offers some evidence on institutional differences across EU countries. Using recursive and semi-structural VARs, the role of house prices in the MTM is then assessed in eight European countries over the pre-EMU period. Results show a different degree of sensitivity of house prices, partly consistent with the institutional features of the European housing systems. The importance of these policy-induced changes in house prices to the transmission of monetary shocks to private consumption are then investigated. The chapter provides some support for the view that the house price channel may be an important source of MTM to consumption in those economies where housing and mortgage markets are relatively more developed and competitive. Chapter 3: This chapter extends the existing cross-country housing empirical literature focusing on the main fundamental factors affecting house price dynamics in a number of ways. First, through the implementation of seemingly unrelated regression (SUR) techniques and heterogeneous panel estimation methods, it is shown that European house prices are asymmetrically affected by real and financial variables. Subsequently, using a recent dataset, which collects quarterly information on housing and mortgage markets of EU countries, separate house price equations are estimated within an unrestricted error correction mechanism (ECM) approach for eleven European economies over the period 1980-2001. Results show that European house prices are driven by similar factors, but that their relative importance differs very significantly across countries. In particular, while real income is this single most important determinant of real house prices, financial effects play a relatively more important role in those countries that experienced a higher degree of financial liberalisation

Can Public Policy Help to Promote Micro-Enterprises Success in the Context of an Economic Downturn? The Case of Argentina

The paper introduces the question of micro enterprises success in Argentina in the context of the 2007-2008 international financial crisis that overlaps with the lagged effects of the previous domestic downturn of 2001-2002. The work focuses on three aspects of the micro enterprises that have not been sufficiently studied in the literature on emerging economies: entrepreneurial profile of the firm-owner, performance and profile of the micro-entrepreneurs benefited by public policies. Results: according to the entrepreneurial profile four groups were identified, the performance in each group was directly related to entrepreneur’s degree of dedication and inversely related to condition of being previously unemployed and public policies were found to be pro-poor biased.micro enterprise, entrepreneur, public policies, Argentina

Clustering and classifying images with local and global variability

A procedure for clustering and classifying images determined by three classification variables is presented. A measure of global variability based on the singular value decomposition of the image matrices, and two average measures of local variability based on spatial correlation and spatial changes. The performance of the procedure is compared using three different databases.Images, Cluster, Classification