5,091 research outputs found

    Innovation Shortfalls

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    There is a common perception that low productivity or low growth is due to what can be called an innovation shortfall, usually identified as a low rate of investment in research and development (R&D) compared with some high-innovation countries. The usual reaction to this perceived problem is to call for increases in R&D investment rates, usually specifying a target that can be as high as 3 percent of GDP. The problem with this analysis is that it fails to see that a low R&D investment rate may be appropriate given the economy's pattern of specialization, or may be just one manifestation of more general problems that impede accumulation of all kinds of capital. When does a country suffer from an innovation shortfall above and beyond the ones that should be expected given its specialization and accumulation patterns? This is the question tackled in this paper. First, it shows a simple way to estimate the R&D gap that can be explained by a country's specialization pattern, and illustrates this with the case of Chile. The analysis finds that although Chile's specialization in natural-resource-intensive sectors explains part of its R&D gap, a significant shortfall remains. Second, it shows how a calibrated model can be used to determine the R&D gap that should be expected given a country's investment in physical and human capital. If the actual R&D gap is above this expected gap, the country suffers from a true innovation shortfall

    A Cross-Country Analysis of the Risk Factors for Depression at the Micro and Macro Level

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    Past research has provided evidence of the role of some personal characteristics as risk factors for depression. However, few studies have examined jointly their specific impact and whether country characteristics change the probability of being depressed. In general, this is due to the use of single-country databases. The aim of this paper is to extend previous findings by employing a much larger dataset and including the country effects mentioned above. The paper estimates probit models with country effects and explores linkages between specific environmental factors and depression using data from the 2007 Gallup Public Opinion Poll. Findings indicate that depression is positively related to being a woman, adulthood, divorce, widowhood, unemployment and low income. Moreover, there is evidence of the significant positive association between inequality and depression, especially for those living in urban areas. Finally, some populations characteristics facilitate depression (age distribution and religious affiliation)

    Monetary and Exchange Rate Policies for the Perfect Storm: The Case of the Bahamas, Barbados, Guyana, Haiti, Jamaica, Suriname, and Trinidad & Tobago

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    This study provides a set of tools to analyze the monetary and exchange rate policy issues in the seven countries of the Inter-American Development Banks Caribbean region (The Bahamas, Barbados, Jamaica, Haiti, Guyana, Suriname, and Trinidad and Tobago). It then applies some of them to the analysis of the impact of the global turmoil on these economies in the last quarter of 2008. The paper also discusses, in light of both recent theoretical developments and key aspects of these economies, the monetary and exchange policy responses to the initial phase of the global turmoil

    Determinacy and Learnability of Monetary Policy Rules in Small Open Economies

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    This paper evaluates under which conditions different Taylor-type rules lead to determinacy and expectational stability (E-stability) of rational expectations equilibrium in a simple New Keynesian small open economy model, developed by Gali and Monacelli (2005). In particular, we extend the Bullard and Mitra (2002) results of determinacy and E-stability in a closed economy to this small open economy framework. Our results highlight an important link between the Taylor principle and both determinacy and learnability of equilibrium in small open economies. More importantly, the degree of openness coupled with the nature of the policy rule adopted by the monetary authorities might change this link in important ways. A key finding is that, contrary to Bullard and Mitra, expectations-based rules that involve the CPI and/or the nominal exchange rate limit the region of E-stability and the Taylor Principle does not guarantee E-stability. We also show that some forms of managed exchange rate rules can help to alleviate problems of both indeterminacy and expectational instability, yet these rules might not be desirable since they promote greater volatility in the economy

    Political Institutions and Growth Collapses

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    This paper tests whether Rodrik's (1999) results that institutions for conflict management are associated with the ability to react to economic shocks are robust to different ways of defining the quality of such institutions. We measure the quality of conflict management institutions with two different indices. The first is an index of political constraints on the ability of the executive to impose its will. These constraints limit the ability of the government to arbitrarily change the rules of the game and therefore may reduce redistributive struggles. The second index measures the degree of political particularism. We define political particularism as the policymakers' ability to further their career by catering to narrow interests rather than broader national platforms. The indices used in this paper solve the endogeneity and subjectivity biases that affect Rodrik's measure of institutional quality. We find strong support for the idea that high levels of political constraints and intermediate levels of political particularism are associated with a quick recovery from economic shocks

    Measuring Quality of Life in Latin America: What Happiness Research Can (and Cannot) Contribute

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    This paper addresses the issues involved in taking a broader, quality of life-based approach rather than an income-based approach to assessing welfare. Te paper shows how a quality of life approach can help to evaluate the welfare effects of factors ranging from health, education, and unemployment to institutional arrangements such as inequality and opportunity. Nonetheless, directly inferring policy implications is problematic because norms and expectations influence the way in which individuals respond to surveys and the definition of happiness is unclear. The latter allows for research comparisons across individuals and cultures but presents challenges as a basis for policymaking

    Booms and Busts in Latin America: The Role of External Factors

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    This paper analyzes the relevance of external factors in average quarterly GDP growth for 1990-2006 in the seven largest Latin American countries (LAC7). Modeling the relationship between LAC7 GDP and several external factors, it is found that those factors account for a significant share of variance in LAC7 GDP growth, and that external shocks produce significant responses. Likewise, a significant share of recent LAC7 growth performance can be explained by an external factor tailwind. Also evaluated is the impact of deterioration in external financial conditions. Finally, the relevance of these findings for policy evaluation is emphasized. Growth performance, the strength or weakness of macroeconomic fundamentals and the impact of domestic macro and micro policies on growth can only be properly appraised by first filtering out the effects of external factors

    The Political Economy of Fiscal Reform in Brazil: The Rationale for the Suboptimal Equilibrum

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    This project examines fiscal reforms in Brazil since the 1990s, particularly in taxation, budgeting, and fiscal federalism. While recentralizing fiscal authority and massively expanding the extractive capacity of the state, policymakers chose not to revamp an inefficient tax system that has nonetheless proven capable of generating high levels of revenue. In budgeting, the economic crises of the mid-1990s prompted the government to rein in subnational fiscal imbalances but discouraged policymakers from introducing major changes in the tax system. As the executive derives utility from fiscal stability and inflation control because of electoral incentives and credibility gains in international markets, reform initiatives can generate political benefits for incumbent politicians. The paper finally argues that the Achilles heel of the sustainability of the Fiscal Responsibility Law is its enforcement technology: the -Tribunais de Contas-

    MFIC Corporate Brochure

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    Microfinance International Corporation was founded in 2003, with the intention to work to develop a could work to develop a solution to overcome the limitations of MFIs with the goal of providing sustainable financial assistance to families in developing regions and offering an attractive business opportunity for socially conscious investors. The Microfinance International system reproduces the internal treasury operations of an international bank for the benefit of the participating MFIs and hence bundling the strength of many small institutions. Microfinance International Corporation¿s presents a Solution An Electronic Settlement System for MFIs, a remittance-backed Lending Program making remittances work for development and Mi Pueblo Financial Service Centers for Latin Immigrants in the US
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