Welfare Implications of a Second Lender in the International Markets

The role of an extra lender in the international markets – such the IMF or another similar institution - has been widely covered in academic discussions and among policy makers. However, there is neither a clear answer nor a consensus about its welfare consequences. On the one hand, it is argued that the moral hazard consequences of an extra lender could be strong enough to offset any positive effect of an additional source of funding. On the other hand, it is argued that moral hazard consequences could be negligible and, therefore, the second lender’s presence could be welfare improving. The aim of this paper is twofold. First, it provides a numerical perspective about the welfare effect of an active second lender. Second, it sheds light on the debt dynamics in the two-lender case. The main result is that the second lender is not beneficial from a welfare standpoint for a wide range of parameters. Without coordination, the estimates imply welfare losses that range from 1.5% to 6% of GDP, depending on the severity of the second lender’s penalties. On the other hand, if a coordination mechanism is imposed, such as the second lender acting as a lender of last resort, then the model will mimic a one-lender model where the first lender is crowded out from the market. l II) could be helpful on this task.

Microeconomic Evidence of Nominal Wage Rigidity in Chile

This paper presents micro evidence on the degree of downward nominal wage rigidity in Chile and also explores its consequences in terms of employment. The data used corresponds to a new panel based on 440 thousand wage histories for the period 2001.12-2007.12. The results indicate a low degree of wage flexibility, the estimated length of wage adjustment for the whole economy being around nine quarters. In terms of the determinants of wage rigidity, the degree of flexibility depends negatively on the size of the firm, the percentage of female workers, the age of workers and white-collar participation at firm level. The econometric estimations indicate that the direct consequence of wage rigidity is a higher fluctuation of employment through the business cycle.

Chinese Penetration and Importer Country Wages: Microevidence From Chile

The increasing importance of China in the world trade raises important questions on its impact on importing countries. This paper studies how import competition from China has affected wages in the Chilean Manufacturing Industry. Using plant-level data for the period 1996-2005, we find that increasing imports from China have tended to depress real wages in manufacturing plants. This negative effect on manufacturing workers is heterogeneous. We find that firms in labor-intensive industries and smaller firms have been quantitatively more affected by Chinese competition. These results hold to correction for sample selection and alternative measures of import competition from low-wages countries.

The Long And The Short Of Emerging Market Debt

Emerging economies have tried to promote long-term debt since it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. We analyze monthly asset-level portfolios of Chilean institutional investors (mutual funds, pension funds, and insurance companies) and compare their maturity structure to that of US bond mutual funds. Despite being thought to invest long term, Chilean asset-management institutions (mutual and pension funds) hold large amounts of short-term assets relative to US mutual funds and Chilean insurance companies. Shorttermism is not driven by lack of instrument availability or tactical behavior. Instead, it seems to be explained by the desire to minimize inflation risk and, more importantly, by manager incentives that tilt demand toward short-term instruments. Extending the maturity of emerging market debt may require reducing risk and reshaping investor incentives.

The long and the short of emerging market debt

Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. The authors analyze monthly asset-level portfolios of Chilean institutional investors (mutual funds, pension funds, and insurance companies) and compare their maturity structure to that of US bond mutual funds. Despite being thought to invest long term, Chilean asset-management institutions (mutual and pension funds) hold large amounts of short-term assets relative to US mutual funds and Chilean insurance companies. Short-termism is not driven by lack of instrument availability or tactical behavior. Instead, it seems to be explained by the desire to minimize inflation risk and, more importantly, by manager incentives that tilt demand toward short-term instruments. Extending the maturity of emerging market debt may require reducing risk and reshaping investor incentives.Debt Markets,Emerging Markets,,Investment and Investment Climate,Deposit Insurance

The politics of system innovation for emerging technologies: understanding the uptake of off-grid renewable electricity in rural Chile

Access to sustainable energy in the developing world has become a fundamental challenge in development and environmental policy in the 21st Century, and rural electrification in developing countries constitutes a central element of access to energy goals. However, traditional ways of providing electricity to dispersed rural populations (i.e. through centralised electricity infrastructure or fuel-based on-site generation) is proving to be ineffective, inefficient and less sustainable than the use of renewable energy technologies (RETs) in off-grid settings. Such ‘system innovations’ for sustainable electricity services in rural areas are the focus of this study, which seeks to understand the reasons underlying success or failure in the diffusion of radical innovations. Embracing evolutionary and constructivist theories of socio-technical change and sustainability transitions, the thesis attempts to explain the use and diffusion of PV (photovoltaic) and wind technology in off-grid rural electrification over the last 20 years in Chile, a country where access to rural electricity has increased from 53% to 95%. RETs have contributed to nearly 10% of that increment. By using a framework that combines Strategic Niche Management (SNM), systemic intermediation and power, agency and conflicts in decision making, the thesis analyses the dynamics between the development and adaptation of new technologies and their influence in regime shift through replication, scaling up and translation of new socio-technical practices. The thesis attempts to shed light on processes affecting niche construction and it concludes that internal niche processes are relevant to understanding how radical innovations are structured and stabilised from the aggregation of projects. However, those processes are not only a managerial activity that can be steered but a politically underpinned (and iterative) process between specific (socio-political) settings. The study also highlights the role of systemic intermediaries, government and incumbent actors in the dynamic interaction between emergent niche dynamics and traditional ways of improving electricity access

Benjamin y la postmetrópolis constelaciones de dirección única

Las semejanzas que Walter Benjamin establece entre su performance textual y su modo de indagación histórica respecto de la realidad urbana moderna, han proporcionado importantes orientaciones para la compresión de las ciudades. Sin embargo, hemos querido invertir la dirección interpretativa de estos aportes que, por lo general, se han dirigido desde la filosofía benjaminiana hacia los estudios urbanos contemporáneos. por el contrario, y sin desestimar tales aportes, en este caso intentamos utilizar algunos recursos metodológicos de la investigación urbana actual para proponer un marco de lectura posible de uno de los textos más em- blemáticos donde Benjamin, precisamente, construye la semejanza entre escritura y ciudad: Calle de dirección única. partir de las complejidades de lo urbano para enfrentar la interpretación de esta obra no sólo es consecuente con dicha semejanza, sino que también asume el valor heurístico que esta perspectiva puede proporcionar para el trabajo filosófico

Ailment of Project. Fictional Archive and Projectuality

La noción de proyecto, altamente cuestionada a partir de la denominada “muerte del sujeto” dada su inevitable identificación con este último, aparece como un índice de primordial importancia a la hora de repensarla desde las condiciones actuales del arte contemporáneo, sobre todo, desde el modo en que la lógica del archivo ha logrado hegemonizar un importante conjunto de sus prácticas. La pregunta por el “archivo de proyecto” vendría a colocar en juego un supuesto doble agotamiento: el del proyecto, como recurso ético-político fundamental de la modernidad; y el del arte, en tanto puesta en obra de una reflexión por los recursos de representación y significación de los códigos que intentan organizan lo que llamamos “realidad”. Archivar la promesa de liberación, lejos de concebirse como un acto de desprendimiento o abandono de esta, constituye una acción necesaria para proteger su irreductibilidad a las condiciones de lo meramente posible.The notion of project, highly questioned from the so-called “dead of the subject” due its inevitable identification with it appears as an index of primary importance when comes to rethink it from the current conditions of contemporary art, above all from the way in which the logic of the archive has achieved to hegemonise a significant group of its practices. The question regarding “archive project” would come to put in play a supposed double exhaustion: on the project, as a fundamental ethic-political resource of modernity; and on art, while staging a reflection by the resources of representations and signification of codes that attempt to organise what we call “reality.” To archive the liberation promise, far to be conceived as an act of detachment or neglect, constitutes a necessary action to protect its irreducibility to merely possible conditions