Employment Protection and Business Cycles in Emerging Economies

We build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in recessions. In a quantitative version of the model calibrated to the Mexican economy we find that reducing separation costs to a level consistent with developed economies would reduce output volatility by 15 percent. We also use the model to analyze the Mexican crisis episode of 2008 and conclude that an economy with lower separation costs would have experienced a smaller drop in output and in measured total factor productivity with no significant change in aggregate employment.

Optimal Monetary Policy in a Small Open Economy Under Segmented Asset Markets and Sticky Prices

This paper studies optimal monetary policy in a two-sector small open economy model under segmented asset markets and sticky prices. We solve the Ramsey problem under full commitment, and characterize the optimal monetary policy in a version of the model calibrated to the Chilean economy. The contributions of the paper are twofold. First, under the optimal policy the volatility of nontradable inflation is near zero. Second, stabilizing non-tradable inflation is optimal regardless of the financial structure of the small open economy. Even for a moderate degree of price stickiness, implementing a monetary policy that mitigates asset market segmentation is highly distortionary. This last result suggests that policymakers should resort to other instruments in order to correct financial imperfections.

Administración del riesgo cambiario en el sistema bancario peruano.

Clasificación JEL:

Optimización dinámica y teoría económica

Presenta las técnicas matemáticas de optimización aplicadas al análisis económico y cubre los tópicos de programación matemática, optimización dinámica y teoría de juegos

Evaluación de portafolio de inversionistas institucionales: fondos mutuos y fondos de pensionistas

Clasificación JEL:

Neuroprotective Role of SRT1720 Against Hydrogen Peroxide Induced Oxidative Stress in NT2 Cells

Neurodegenerative diseases such as Alzheimer’s disease (AD) and Parkinson’s disease (PD) are characterized by a significant increase in neuronal loss. Oxidative stress (OS) plays a significant role on neuronal damage. Reactive oxygen species (ROS) generated from agents such as hydrogen peroxide (H2O2) leads to cell damage and reduction of cell viability. Sirtuin 1 (SIRT1) is a therapeutic target for neurodegenerative disorders because it regulates several cellular functions and biological processes that promote cellular longevity. This study was undertaken to examine the role of SRT1720 in protecting cells from H2O2 induced stress in Ntera-2 cl.D1(NT2), which has been proven to be a useful in vitro system for the investigation of functions related to human neuronal and glial systems. The results provide evidence that H2O2 significantly induced oxidative stress in a concentration dependent manner. Moreover, pre-treatment with low concentrations of SRT1720 for 48 hours protected against the effects of H2O2. Also, a combination of H2O2 and SRT1720 improved cell viability. Interestingly, apoptotic or necrotic cell death was not detected after H2O2 treatment in the cell culture model system employed

Accounting for Output Drops in Latin America

This paper evaluates which type of models can account for recent episodes of output drops in Latin America. I develop an open economy version of the business cycle accounting methodology (Chari, Kehoe, and McGrattan, 2007) in which output fluctuations are decomposed into four sources: total factor productivity (TFP), a labor wedge, a capital wedge, and a bond wedge. The paper shows that the most promising models are the ones that induce fluctuations of TFP and the labor wedge. On the other hand, models of financial frictions that translate into a bond or capital wedge are not successful in explaining output drops in Latin America. The paper also discusses the implications of these results for policy analysis using alternative DSGE models. (Copyright: Elsevier)Business cycle accounting; DSGE models; Small open economy; Sudden stops

Code and data files for "Accounting for Output Drops in Latin America"

Code and data to replicate the results of the article.

Accounting for Output Drops in Latin America

This paper evaluates what type of models can account for the recent episodes of output drops in Latin America. I develop an open economy version of the business cycle accounting methodology (Chari, Kehoe, and McGrattan, 2007) in which output fluctuations are decomposed into four sources: total factor productivity (TFP), a labor wedge, a capital wedge, and a bond wedge. The paper shows that the most promising models are the ones that induce fluctuations of TFP and the labor wedge. On the other hand, models of fnancial frictions that translate into a bond or capital wedge are not successful in explaining output drops in Latin America. The paper also discusses the implications of these results for policy analysis using alternative DSGE models.Latin America;Emerging markets;Labor productivity;Economic models;bond, business cycle, business cycles, total factor productivity, bonds, growth model, gdp per capita, neoclassical growth model, international bond, international bonds, money market, costs of business cycles, stock of capital, money market interest, money market interest rate, growth rate, financial markets, international capital markets, international interest rates, international capital, real business cycle, foreign bonds, currency crises, currency crisis, international financial statistics, growth rates, business cycle fluctuations, real business cycles

Employment Protection and Business Cycles in Emerging Economies

We build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in recessions. In a quantitative version of the model calibrated to the Mexican economy we find that reducing separation costs to a level consistent with developed economies would reduce output volatility by 15 percent. We also use the model to analyze the Mexican crisis episode of 2008 and conclude that an economy with lower separation costs would have experienced a smaller drop in output and in measured total factor productivity with no significant change in aggregate employment.Economic models;Economic recession;Emerging markets;External shocks;Labor markets;employment, labor market, jobs, employment protection, labor supply, unemployed, unemployment, job creation, aggregate employment, labor efficiency, job destruction, labor force, labor flows, employment volatility, unemployed workers, labor market tightness, unemployment rate, labor market policies, labor market distortions, unemployed worker, labor regulation, informal labor markets, labor adjustment, employment opportunity, labor market regulations, effect on employment, equilibrium unemployment, beveridge curve, self-employment, labor regulations, job vacancies, labour, total labor force, job flows, labor market regulation, labor organization, job security, job security regulation, labor market outcomes, labour market, flexibility of labor markets