Targeting inflation and the fiscal balance : what is the optimal policy mix?

This paper identifies optimal policy rules in the presence of explicit targets for both the inflation rate and public debt. This issue is investigated in the context of a dynamic stochastic general equilibrium model that describes a small open economy with capital accumulation, distortionary taxation and nominal price rigidities. The model is solved using a second-order approximation to the equilibrium conditions. Optimal policy features a strong anti-inflation stance and strict fiscal discipline. Targeting a domestic inflation index - as opposed to CPI - improves welfare because it reduces the inefficiencies that stem from both price stickiness and income taxes.Inflation (Finance) ; Prices ; Fiscal policy

The performance of monetary and fiscal rules in an open economy with imperfect capital mobility

This paper studies monetary and fiscal policy rules, and investigates the characteristics of optimal policies. The central focus of the paper is on the comparison of two types of fiscal rules: a balanced budget and a target for the primary surplus. Balanced budget rules (or, more generally, numeric ceilings to the overall budget deficit) are criticized because they may dictate higher taxes in periods of weak economic activity. The primary surplus rule, in contrast, has a less pro-cyclical nature, given that it does not require higher fiscal austerity in periods when the cost of servicing public debt is higher. In a nutshell, it allows a higher degree of tax smoothing. It is not clear, however, if (inevitable) fiscal adjustments should be postponed. These issues are investigated in the context of a dynamic stochastic general equilibrium model that describes an open economy, with capital accumulation, and where nominal rigidities are present. The model shows that previous findings drawn from open economy models—in particular with respect to the characteristics of optimal monetary policy—do not hold once the implications of certain fiscal regimes are taken into account, and once different scenarios concerning the degree of capital mobility are considered. The model is calibrated and simulated for the case of Brazil, a country that since 1999 has targets for inflation and for the primary surplus. The main finding is that a fiscal regime characterized by a target for the primary surplus delivers superior economic performance, a property captured by the shape of the efficient policy frontier.Monetary policy ; Fiscal policy ; Inflation (Finance)

Devolution and Accountability Effects in the Public Provision of Water Services in Indonesia

This paper separately evaluates how devolution and accountability, two distinct aspects of the decentralization reforms implemented in Indonesia in the year 2001, influenced the public provision of water services. Using household level data it is found that thedevolution of responsibility does not necessarily affect the provision of public services. Our findings show that the quality of publicly provided water decreased only in cities in which devolution was accompanied by a change in accountability. Robustness checks suggest that these results are driven by changes in the accountability framework rather than trends in the health services.Indonesia, decentralization, accountability, devolution, water

The challenge of high capital inflows to financial stability: an emerging market perspective.

High liquidity and continued economic weakness in advanced economies have led to a surge in capital flows to emerging markets with strong fundamentals and open financial accounts such as Brazil. While capital inflows have undeniable benefits to emerging economies, they are also potentially destabilising. Past experience has shown that high levels of capital inflows can lead to exchange rate volatility and credit or asset price bubbles. In the context of Brazil’s inflation-targeting regime for monetary policy, macroprudential measures have proved to be a useful complement to traditional macroeconomic policies. However, today’s imbalanced global economy presents an especially difficult challenge for policymakers. The international financial community needs to work together on two fronts: improving our macroprudential toolkit and building a stronger framework for multilateral macroeconomic cooperation.

DEBT, FINANCIAL FRAGILITY AND ECONOMIC GROWTH: A POST-KEYNESIAN MACROMODEL

It is developed a mathematical post-keynesian macromodel of capacity utilization and growth in which the supply of credit-money is endogenous and firms' debt position - and thus the financial fragility of the economy - is explicitly modeled. Both the influence of interest rate and indebtedness on capacity utilization and the rates of profit and growth, on the one hand, and the effect of the parameters of the saving and investment functions on financial fragility, on the other hand, are carefully analyzed.

A MACRODYNAMICS OF DEBT REGIMES, FINANCIAL INSTABILITY AND GROWTH

It is developed a dynamic macromodel of utilization and growth of productive capacity, in which the supply of credit-money is endogenous and firms' debt position - and thus the financial fragility of the economy à la Hyman Minsky - is explicitly modeled. The rate of interest is set as a markup over the base rate, which is exogenously determined by the monetary authority. Banking markup varies with changes in economic activity, which is measured by capacity utilization, while firms' debt position varies with the rates of interest, profit and capital accumulation. Regarding dynamics, it is shown the possibility of relating the stability properties of a system with the interest rate and the debt ratio as state variables to the type of minskyan regime - hedge, speculative, Ponzi - which prevails.

La Revolución en Asuntos Militares (Intervenção do Chile)

As alterações verificadas no tradicional contexto de "natureza de guerra" no pós-Guerra Fria, levam os países iberoamericanos a repensar o significado e alcance da RAM, bem como redefinir as suas estratégias militares. Perante as novas "guerras de 4a geração", ameaças convencionais e não convencionais no plano internacional, as Forças Armadas vêem o seu papel de dissuasores substituído por uma função de prevenção e reacção face a um inimigo desconhecido, de características imprevisíveis. Neste contexto, revela-se fundamental a profissionalização das forças militares nas operações de peace keeping, bem como o recurso a armas de precisão e emprego intensivo de tecnologias que limitam o dano colateral e diminuem a ocorrência de baixas ("zero baixas")

Soberania alimentar, agroecologia e mercados locais.

A Rede Ecovida tem estimulado a construção de uma Rede Solidária de Produção e Circulação de Produtos Ecológicos nos estados do Paraná, de Santa Catarina e do Rio Grande do Sul, cujas células de comercialização são feiras livres, cooperativas de consumidores, mercados institucionais, pontos de abastecimento popular, pequenas lojas e comerciantes. Essa iniciativa é mais uma demonstração que práticas agroecológicas, associadas a mercados locais, trazem impactos positivos à Soberania Alimentar da população