The productive role of public infrastructure: A critical review of recent literature

The publication of two empirical articles by Aschauer in 1989 brought a renewed interest in the study of the productive role of public infrastructure. Since then, many empirical studies as well as a few surveys have been published not only in regional science journals but also in main stream economics journals. The interest in the subject and the controversy are both high, which constitute two major ingredients for our critical review of recent literature. Our purpose in this paper is to evaluate the recent contributions identifying approaches followed, results obtained, major shortcomings of the empirical evidence produced, areas of strong controversy and promising methodologies for future research.

The productive role of public infrastructure: A critical review of recent literature

The publication of two empirical articles by Aschauer in 1989 brought a renewed interest in the study of the productive role of public infrastructure. Since then, many empirical studies as well as a few surveys have been published not only in regional science journals but also in main stream economics journals. The interest in the subject and the controversy are both high, which constitute two major ingredients for our critical review of recent literature. Our purpose in this paper is to evaluate the recent contributions identifying approaches followed, results obtained, major shortcomings of the empirical evidence produced, areas of strong controversy and promising methodologies for future research

To Be or Not To Be in Office Again, That is the Question: Political Business Cycles with Local Governments

Most opportunistic -type models of political business cycles tend to posit a given objective for incumbents: maximisation of re-election chances. Though taking an opportunistic view too, we suggest a new explanation for a fiscal policy cycle: the incumbents concern with her own welfare in cases of victory and defeat. This rationale addresses local policy-making in particular. An equilibrium perfectforesight model is designed which totally dispenses with any form of irrationality (namely, on the part of voters) or the common objective functions (re-election chances). Being well grounded in basic microeconomic theory (welfare maximisation by the individual agent), our model provides another foundation for the emergence of political business cycles at the local level. The empirical plausibility of theoretical predictions is then tested on Portuguese municipal data ranging from 1977 to 1993. The estimation of an error-components econometric framework finds evidence in favour of the proposed explanation and enlightens the role played by several politicoeconomic determinants of local governments investment outlays, such as electoral calendar, re-candidacy decisions, political cohesion and intergovernmental capital transfers.local public finance; public choice; political business cycles; elections; Portugal

Capital Flows and Destabilizing Policy in Latin America

Motivated by the excessive macroeconomic volatility experienced in Latin America, we examine the possible contribution of monetary and fiscal policies to this outcome. In contrast with previous literature, we consider the possible simultaneity between policy and GDP growth by using GMM VAR econometric techniques. Additionally, we explore the direct impact international capital inflows have on these policies. Our evidence suggests that for the group of countries we consider, most practice destabilizing fiscal and monetary policy, and capital inflow consistently influences policy in a pro-cyclical direction.Fiscal and Monetary Policies, Capital Flows, Latin America

Finance and the Business Cycle: a Kalman Filter Approach with Markov Switching

This paper combines two popular econometric tools, the dynamic factor model and the Markov-Switching model, to consider three segments of the financial system- the stock market, debt, and money- and their contribution to US business cycles over the past four decades. The dynamic factor model identifies a composite factor index for each financial segment, and using Markov-switching models by Hamilton (1989) and Filardo (1994), this paper then estimates the effect of each segment index on business cycle behaviour. This reexamination of the finance-business cycle link provides results that prove strongest for the effect of stock market movements on business cycles.

The Effect of Adverse Oil Price Shocks on Monetary Policy and Output Using a Dynamic Small Open Economy General Equilibrium Model With Staggered Price for Brazil

The aim of the present research is to use a model economy built for Brazil, based on an optimizing dynamic general equilibrium model, in order to perform numerical simulations to derive the ability of the artificial economy to explain the impact of monetary policy interventions on Brazilian short run economic performance in terms of the inflation rate, output gap, interest rate and level of economic activity in the face of an adverse oil shock. It is an extension of Bugarin et al. (2005) concentrating on the consequence of energy price increases, facing different monetary policy rules. Following Hall (1988 e 1990) and Finn (2000) it is considered that an increase in energy prices acts like a negative productivity shock. The model provides an accessible description of an artificial economy with a tractable micro-founded dynamic setting with forward looking rational agents in a small open economy with a staggered pricing mechanism that generates inflation inertia and recessionary disinflations. Alternative specification of monetary reaction functions are introduced into the model economy in order to perform a sensitivity analysis of derived impulse responses to those interventions facing the negative productivity shock. The preliminary results suggest that the introduction of habit persistence into the consumption hypothesis does not make much difference. However the introduction of different monetary reaction functions does alter the impulse response of output, inflation rate, and nominal interest rate. A common result is the decline in potential output for all models. Additionally, the only case where a reduction in the output gap is observed is when using the Taylor rule that takes into consideration the output gap and past interest rates with high persistence.

In situ study of the endotaxial growth of hexagonal CoSi2 nanoplatelets in Si(001)

This investigation aims at studying-by in situ grazing-incidence small-angle x-ray scattering-the process of growth of hexagonal CoSi2 nanoplatelets endotaxially buried in a Si(001) wafer. The early formation of spherical Co nanoparticles with bimodal size distribution in the deposited silica thin film during a pretreatment at 500 °C and their subsequent growth at 700 °C were also characterized. Isothermal annealing at 700 °C promotes a drastic reduction in the number of the smallest Co nanoparticles and a continuous decrease in their volume fraction in the silica thin film. At the same time, Co atoms diffuse across the SiO2/Si(001) interface into the silicon wafer, react with Si, and build up thin hexagonal CoSi2 nanoplatelets, all of them with their main surfaces parallel to Si{111} crystallographic planes. The observed progressive growths in thickness and lateral size of the hexagonal CoSi2 nanoplatelets occur at the expense of the dissolution of the small Co nanoparticles that are formed during the pretreatment at 500 °C and become unstable at the annealing temperature (700 °C). The kinetics of growth of the volume fraction of hexagonal platelets is well described by the classical Avrami equation.Fil: Costa, Daniel Da Silva. Universidade Federal do Paraná; BrasilFil: Huck Iriart, Cristián. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas. Universidad Nacional de La Plata. Facultad de Ciencias Exactas. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas; ArgentinaFil: Kellermann, Guinther. Universidade Federal do Paraná; BrasilFil: Giovanetti, Lisandro Jose. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas. Universidad Nacional de La Plata. Facultad de Ciencias Exactas. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas; ArgentinaFil: Craievich, Aldo F.. Universidade de Sao Paulo; BrasilFil: Requejo, Felix Gregorio. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - La Plata. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas. Universidad Nacional de La Plata. Facultad de Ciencias Exactas. Instituto de Investigaciones Fisicoquímicas Teóricas y Aplicadas; Argentin