Floating, Official Dollarization, and Macroeconomic Volatility:An Analysis for the Chilean Economy

This paper contrasts the volatility of the main macroeconomic variables of a small open economy in two environments: an official dollarization (OD) scheme and a flexible exchange regime (FER). A simple DSGE model calibrated for the Chilean economy is used as a laboratory to study the implications of these regimes on the standard deviations of key variables. Welfare implications are also analyzed for a central bank that it is concerned with output and inflation volatility. Our findings show that OD results in: higher real volatility due to the absence of ountercyclical monetary policy; lower inflation volatility because of a less volatile foreign interest rate; and, from a welfare perspective, OD is dominated by a FER when the central bank weighs considerably the deviations of inflation and output from the steady state. Also, OD implies higher fiscal deficit volatility as a consequence of higher tax revenue volatility, and a higher reaction to terms-of-trade shocks.

The Harberger-Laursen-Metzler Effect Revisited: An Indirect-Utility-Function Approach

To study the effect of a terms-of-trade shock on the current account, Ostry and Reinhart (1992) and Cashin and McDermott (1998) estimate the intertemporal and intratemporal elasticities of substitution, for a set of countries, constructing importable and non-tradable consumption series. Unfortunately,these series are not available for most developing countries. This paper presents a dynamic stochastic framework, similar to Ostry and Reinhart’s, that maximizes a representative agent’s indirect utility function. The Euler conditions derived from the optimization problem do not depend on variables such as tradable and non-tradable consumption, avoiding the need for constructing them and adopting strong assumptions. Using GMM and Chilean quarterly data for the 1986-2002 period, I conclude that moderately low intertemporal and intratemporal substitution effects exist. The first estimated elasticity lies in the range of 0.46 to 0.56 and the latter is around 1.

Purchasing Power Parity in an Emerging Market Economy: A Long-Span Study for Chile.

Recent research has found evidence that supports the purchasing power parity (PPP) condition in developed countries using very long-span data, while evidence for developing countries is almost nonexistent. This paper tries to fulfill this void by testing the validity of PPP as a long run equilibrium condition for Chile, using data, since its birth as a nation, developed by Díaz, Lüders and Wagner (2003). A battery of unit-root and cointegration tests is applied. We found evidence in favor of PPP. Results are robust to changes in the domestic price index, to changes in the sample period, and to the econometric technique applied.

Institutions and Cyclical Properties of Macroeconomic Policies

Strong swings in business cycle conditions in industrial and emerging market economies (EMEs) alike have renewed the debate on effectiveness of stabilization policies. Traditionally it has been argued that EMEs are unable to pursue counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable political-economy equilibriums. However, we claim that EMEs with institutional features similar to those of industrial countries may be able to conduct counter-cyclical policies. Using a sample of 20 EMEs and annual data for the 1990-2003 period, we find that the level of institutional quality plays a key role in the ability of these economies to conduct stabilizing macroeconomic policies. We show that EMEs with strong institutions are able to implement counter-cyclical macroeconomic policies —reflected in extended monetary-policy (Taylor) and fiscal-policy rules.

Institutions and Cyclical Properties of Macroeconomic Policies in the Global Economy

Sharp fluctuations in cyclical conditions observed in industrial and developing countries alike have renewed the debate on the scope and the effectiveness of stabilization policies. Traditionally it has been argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable political-economy conditions. We claim that developing countries with institutional features similar to those of industrial countries are able to conduct counter-cyclical policies. Using a world sample of 115 industrial and developing countries for 1984-2008, we find that the level of institutional quality plays a key role in countries’ ability to implement counter-cyclical macroeconomic policies. The results show that countries with strong (weak) institutions adopt counter- (pro-) cyclical macroeconomic policies, reflected in extended monetary policy and fiscal policy rules. The threshold level of institutional quality at which macroeconomic policy is neutral to the business cycle is higher for fiscal policy than for monetary policy. The sensitivity of fiscal policy cyclicality to institutional quality is larger than is the case of monetary policy.Counter-cyclical macroeconomic policies, institutions, fiscal policy, monetary policy

The Role of Credibility in the Cyclical Properties of Macroeconomic Policies in Emerging Economies

Optimal stabilization policy is counter-cyclical, aiming at keeping output close to its potential. However it has been traditionally argued that emerging economies are unable to adopt counter-cyclical monetary and fiscal policy. Here we argue that the cyclical properties of macroeconomic policies depend critically on policy credibility. We test this proposition by making use of recent panel data for eleven emerging market economies and time-series data for Chile. The evidence supports that countries with higher credibility, as reflected by lower country risk levels, are able to conduct countercyclical fiscal and monetary policies. Conversely, countries with less credible policies (and, therefore, with higher country risk spreads) contribute to larger cyclical fluctuations by applying pro-cyclical policies. For Chile we find that both monetary and fiscal policies have been largely counter-cyclical after 1993.

Hacia una musicología panameña

For many years, researchers have made studies regarding the art, culture and folklore of Panama. The inaccessibility to music sheets, transcriptions, recordings and related documentation are some of the difficulties found during their studies. Lack of documentation is one of the handicaps for the creation and practice of a Pa-namanian musicology. The establishment and development of a Panamanian musicology depends upon the training of researchers which includes a specialty in music, knowledge in areas such as art, folklore, English, abo-riginal languages, sociology, psychology, research methods, and statistics. Along with this training, the Panama-nian musicology can be established through document preservation and research duplications. Doctoral investigations made by researchers abroad, and undergraduate papers and theses made at the University of Pa-nama are good sources from which to pick up suitable duplication studies.A Panamanian music research center should assume the responsibility of publishing these investigations.Desde hace muchos años, los investigadores han realizaron estudios sobre el arte, cultura y folclore de Panamá. Una de sus dificultades al realizar estos estudios, fue la inaccesibilidad a partituras musicales, trans-cripciones, grabaciones y otros documentos. La falta de esta documentación constituye una barrera para la cre-ación y práctica de una musicología panameña. El establecimiento y desarrollo de una musicología panameña depende de una formación de investigadores que incluye una especialidad dentro de la música, conocimientos en áreas como el arte, folclore, inglés, lenguas indígenas, sociología, psicología, metodología de investigación y estadística. Complementario a esta formación, podremos establecer la musicología panameña, conservando do-cumentos y replicando estudios. Las investigaciones doctorales hechas por investigadores en el exterior y los trabajos de graduación y tesis completadas en la Universidad de Panamá son fuentes ricas para seleccionar es-tudios de replicación. Un centro de investigación musical panameña deberá asumir la responsabilidad para di-seminar estos estudios

A Case of Chronic Inflammatory Demyelinating Polyneuropathy after Pfizer COVID-19 Vaccination

Background: Chronic inflammatory demyelinating polyneuropathy is an immune-mediated polyneuropathy characterized by peripheral demyelination, resulting in symmetrical sensory loss and distal and proximal muscle weakness. While CIDP has been reported after influenza, tetanus, and other common vaccinations, this is the first reported case of CIDP after COVID-19 vaccination to our knowledge. Case Presentation: A 34-year-old right-handed male with an unremarkable past medical history presented with bilateral distal paresthesias, proximal and distal muscle weakness, and fine motor difficulties. Symptoms initially manifested with toe numbness, approximately two weeks after receiving the first dose of the Pfizer COVID-19 vaccine. Paresthesias gradually progressed from lower extremities to upper extremities. Two months after the initial COVID-19 vaccine, symptoms worsen with decreased muscle strength, difficulties with fine motor activities, difficulties climbing stairs, and lifting objects above his head. Neurologic evaluation revealed 4/5 strength in upper and lower extremities, generalized hyporeflexia, decreased vibration, and proprioception. MRI of the brain and spine revealed no abnormalities. Nerve conduction studies were consistent with demyelination and cerebral spinal fluid analysis revealed albuminocytologic dissociation. The patient was diagnosed with CIDP and began steroids after poor response to a four-day treatment course of IVIG 2g/kg which resulted in partial improvement of strength. The patient continues to follow up with long-term prednisone therapy. Conclusion: Demyelinating polyneuropathies are a rare complication of vaccination. While the benefits outweigh the risks of immunization, we aim to inform of this potential complication

A Multiscale Productivity Assessment of High Andean Peatlands across the Chilean Altiplano Using 31 Years of Landsat Imagery

The high Andean peatlands, locally known as "bofedales", are a unique type of wetland distributed across the high-elevation South American Altiplano plateau. This extensive peatland network stores significant amounts of carbon, regulates local and regional hydrological cycles, supports habitats for a variety of plant and animal species, and has provided critical water and forage resources for the livestock of the indigenous Aymara communities for thousands of years. Nevertheless, little is known about the productivity dynamics of the high Andean peatlands, particularly in the drier western Altiplano region bordering the Atacama desert. Here, we provide the first digital peatland inventory and multiscale productivity assessment for the entire western Altiplano (63,705 km(2)) using 31 years of Landsat data (about 9000 scenes) and a non-parametric approach for estimating phenological metrics. We identified 5665 peatland units, covering an area of 510 km(2), and evaluated the spatiotemporal productivity patterns at the regional, peatland polygon, and individual pixel scales. The regional assessment shows that the peatland areas and peatlands with higher productivity are concentrated towards the northern part of our study region, which is consistent with the Altiplano north-south aridity gradient. Regional patterns further reveal that the last seven years (2011-2017) have been the most productive period over the past three decades. While individual pixels show contrasting patterns of reductions and gains in local productivity during the most recent time period, most of the study area has experienced increases in annual productivity, supporting the regional results. Our novel database can be used not only to explore future research questions related to the social, biological, and hydrological influences on peatland productivity patterns, but also to provide technical support for the sustainable development of livestock practices and conservation and water management policy in the Altiplano region.Open access journalThis item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at [email protected]