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Research Topics


Understanding Financial Fluctuations and Their Relation to Macroeconomic Stability
Pagliacci, Carolina; Guarata, Nora
Working Papers - English - May, 2017

This paper examines how financial fluctuations and macroeconomic stability interact in the case of Venezuela, acknowledging that financial conditions deteriorating the macroeconomic environment can arise with both good and bad macroeconomic performance. An empirical methodology is provided that constructs two indexes, which are fully interpretable and are constructed with a minimum set of assumptions applied to a large number of financial time series. Structural interpretation of indexes is pursued using a structural VAR (SVAR) that associates macroeconomic stability with financial indexes. For Venezuela, a deterioration of procyclical financial conditions relates to financial margin reductions and expansions in banks’ balance sheets, which are mostly triggered by unexpected increases in net primary money creation. Such expansions tend to appear in situations of declining macroeconomic stability. Worse countercyclical financial conditions are instead associated with situations of rising bank profitability, deleveraging and increased banking instability. In this case, fragility tends to materialize in periods of ameliorated macroeconomic stability.

Related JEL Codes:
E00 - Macroeconomics and Monetary Economics: General
E30 - Prices, Business Fluctuations, and Cycles: General
G10 - General Financial Markets: General

Pollution or Crime: The Effect of Driving Restrictions on Criminal Activity
López, Andrea; Malik, Arun; Carrillo, Paul
Working Papers - English - Jul, 2016

Driving restriction programs have been implemented in many cities around the world to alleviate pollution and congestion problems. Enforcement of such programs is costly and can potentially displace policing resources used for crime prevention and crime detection. Hence, driving restrictions may increase crime. To test this hypothesis, this paper exploits both temporal and spatial variation in the implementation of Quito, Ecuador’s Pico y Placa program and evaluates its effect on crime. Both difference-in-difference and spatial regression discontinuity estimates provide credible evidence that driving restrictions can increase crime rates.

Related JEL Codes:
C20 - Single Equation Models; Single Variables: General
Q52 - Pollution Control Adoption Costs; Distributional Effects; Employment Effects
R28 - Government Policy
R48 - Government Pricing; Regulatory Policies; Transportation Planning

Do Nonmonetary Prices Target the Poor? Evidence from a Field Experiment in India
Hoffmann, Bridget
Discussion Papers - English - May, 2016

Monetary price subsidies are often used to increase take-up of health products, but monetary prices may screen out those with the highest returns, the poor. Using willingness to pay (WTP) data from a field experiment in India, this paper determines whether nonmonetary prices better target health products to the poor than monetary prices. It is found that monetary WTP is increasing in income and nonmonetary WTP is weakly decreasing in income. Comparing across price types, nonmonetary WTP falls relative to monetary WTP as income rises. Nonmonetary prices better target the poor than monetary prices (a larger fraction of total demand is poor).

Related JEL Codes:
C93 - Field Experiments
D12 - Consumer Economics: Empirical Analysis
I18 - Government Policy; Regulation; Public Health

The Challenge of Public Capabilities for Successful Productive Development Policies: Hopeless Task or Pragmatic Program?
Fernández-Arias, Eduardo; Stein, Ernesto H.; Cornick, Jorge
Working Papers - English - Mar, 2016

This paper discusses the organizational structure and technical, operational and political capabilities required for successful productive development policies (PDPs). It also discusses how countries can match their PDPs to existing capabilities, as well as expand their capabilities in the long run. The specific difficulties associated with PDPs are also discussed.

Related JEL Codes:
H10 - Structure and Scope of Government: General
H11 - Structure, Scope, and Performance of Government
L50 - Regulation and Industrial Policy: General
O25 - Industrial Policy

Climate Change and Migration: A CGE Analysis for Two Large Urban Regions of Latin America
Chisari, Omar; Miller, Sebastian
Working Papers - English - Mar, 2016

Migration is one of the strategies used by populations to adapt to natural shocks and also to respond to economic policies. Climate change will probably have an impact on the productivity of factors and on the health of the population of the Latin America and Caribbean region, triggering migrations. In addition, policies aimed at reducing emissions (like carbon taxes) will change relative prices and the remuneration of factors and, in turn, will alter the allocation of labor between urban and rural areas. This paper explores the potential quantitative relevance of those population movements using a CGE version of the Harris-Todaro model. Two paradigmatic cases are considered: i) domestic or internal migrations, focusing on the case of Sao Paulo (Brazil) and ii) international migrations, analyzing the displacement of population from Bolivia and Paraguay to Argentina.

Related JEL Codes:
C68 - Computable General Equilibrium Models
J61 - Geographic Labor Mobility; Immigrant Workers
R13 - General Equilibrium and Welfare Economic Analysis of Regional Economies
R23 - Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics

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