Papers by Arturo Porzecanski
The pattern of recent legal and illegal Mexican gross migration to the U.S. is surveyed and its p... more The pattern of recent legal and illegal Mexican gross migration to the U.S. is surveyed and its principal economic determinants are analyzed empirically. Concern is with the economics of the migratory flow per se rather than with the estimation of short-run effects and/or long-run consequences of Mexican migration to the U.S. on either the Mexican or the American economies. The major findings of the econometric analysis can be summarized as follows: 1) it appears that the economic determinants of legal illegal and total Mexican migration to the U.S. are essentially the same although the magnitude of the consequence of a percentage change in a given economic determinant is considerably different depending on which migratory flow is being examined; 2) the main variable affecting the number of legal illegal and total immigrants is the differential in the rate of unemployment between Mexico and the U.S. especially the rate of unemployment in Mexico; 3) the elasticity of migration with respect to intercountry unemployment differentials is much higher for illegal than for legal immigrants; the same is true of the elasticity of migration with respect to the rate of unemployment in Mexico; 4) differentials in real wages do not appear to influence the number of legal illegal or total immigrants; and 5) the attempt to quantify the probability of a migrant both finding a job and earning an American salary as well as of him/her both finding a job and obtaining the existing wage differential was unsuccessful in that migratory flows continued to be determined primarily by unemployment considerations. The key to diminishing the flow of Mexican migrants - were that to become a long-run U.S. policy objective - lies in reducing the existing gap between economic opportunities in Mexico and in the U.S.
Journal of Political Economy, 1977
SSRN Electronic Journal
Links to third party websites are provided by Oxford in good faith and for information only. Oxfo... more Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work.
Estudios Demográficos y Urbanos
Development, 2017
Sovereign debt restructurings may experience marginal changes as a result of recent modifications... more Sovereign debt restructurings may experience marginal changes as a result of recent modifications in contractual terms being incorporated into new bond issues, but for the most part they will likely resemble what has generally worked so well in recent decades to the satisfaction of most governments and private creditors. The statutory reforms that have been proposed to date are highly unlikely to gain traction for a variety of reasons, including the prospect that they would have been stymied when confronted with a rogue sovereign debtor such as Argentina.
SSRN Electronic Journal, 2000
In the 1970s, while a leftist military dictatorship ruled Peru, more than 22 million acres of cul... more In the 1970s, while a leftist military dictatorship ruled Peru, more than 22 million acres of cultivated or grazing farmland-one-third of Peru's total agricultural acreage, or seven-and-a-half times the land area of Connecticut-were expropriated from thousands of large owners as part of a property reform intended to benefit up to 400,000 landless peasant families. The compensation provided to landowners was miserly, however: on average, it was less than one-tenth the thenprevailing market price of water-accessible, cultivated land. Moreover, about 85 percent of total recognized land values were settled not in cash but with long-term Agrarian Debt Bonds, which committed future governments to honor fixed coupons on obligations maturing in 20 to 30 years. These bonds became worthless during the 1980s, however, because hyperinflation raged and the Peruvian currency lost most of its value. In the wake of the filing of hundreds of lawsuits seeking judicial redress, in 2001 the country's Constitutional Tribunal ruled that the government should resume payment of the land-reform debt after updating its nominal value on an actuarial basis. And yet, successive administrations did not act on this ruling, despite the fact that since the mid-1990s Peru has exhibited vigorous economic growth, significantly strengthened public finances, and substantially improved creditworthiness, such that governments have had more than the necessary ample fiscal resources to redeem the land-reform bonds at their full, original value. It was not until July 2013 that the Constitutional Tribunal reaffirmed the government's obligation to pay the current value of the agrarian debt and gave it six months to issue a decree-law regulating the procedure for payments on the land-reform bonds. The current (Ollanta Humala) government complied, but it put forth an adjustment formula which does not revalue the bonds correctly and leaves them nearly worthless, thus adding insult to long-standing injury. Evidently, we are now in the presence of a case of blatant unwillingness to pay, one which undermines Peru's claim to be a nation that is creditworthy, investor-friendly, and respectful of the rule of law.
Brazil on the Global Stage, 2015
Sovereign Debt at the Crossroads, 2006
This chapter provides an overview of the reasons behind sovereign debt defaults. It discusses tre... more This chapter provides an overview of the reasons behind sovereign debt defaults. It discusses trends in external indebtedness (public and private) and in government indebtedness (domestic and foreign). It describes the manner in which private lenders and investors, and official bilateral and multilateral agencies, have dealt with sovereign defaults during the 1980s and 1990s. And it closes with an in-depth consideration of the case of Argentina post-2001, which promises to be the most complex sovereign default and workout in contemporary history.
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2016
The voluminous and protracted litigation and arbitration saga featuring the Republic of Argentina... more The voluminous and protracted litigation and arbitration saga featuring the Republic of Argentina (mostly as defendant or respondent, respectively) established important legal and arbitral precedents, as illustrated by three cases involving Argentina which were appealed all the way up to the US Supreme Court and were settled in 2014. At first glance, the scale of Argentina-related litigation activity might be explained by the sheer size of the government's 2001 default, the world's largest-ever up to that point. However, its true origins are to be found in the unusually coercive and aggressive way that the authorities in that country went about defaulting on, and restructuring, their sovereign debt obligations. The mass filing of arbitration claims, in turn, was prompted by Argentina's radical and seemingly irreversible changes to the "rules of the game" affecting foreign strategic investors, which broke with binding commitments prior governments had made in multiple bilateral investment treaties. In sum, a major deviation from best practices as understood and settled in the early 2000s, which codified how economic policy adjustments are to be made in a way that minimizes damage to the investment climate, preserves access to the international capital markets, and promotes rapid and sustainable economic growth, lies at the root of Argentina's litigation and arbitration saga which came to an end during 2016.
SSRN Electronic Journal, 2000
Applications for the copyright owner's written permission to reproduce any part of this publicati... more Applications for the copyright owner's written permission to reproduce any part of this publication should be addressed to the publisher. DISCLAIMER This publication is intended as a general guide only. The information and opinions which it contains are not intended to be a comprehensive study, nor to provide legal advice, and should not be treated as a substitute for legal advice concerning particular situations. Legal advice should always be sought before taking any action based on the information provided. The publishers bear no responsibility for any errors or omissions contained herein.
* Las opiniones vertidas en el presente documento son responsabilidad exclusiva de sus autores y ... more * Las opiniones vertidas en el presente documento son responsabilidad exclusiva de sus autores y no comprometen la opinión del Banco Central del Uruguay. Los autores desean agradecer la colaboración de Juan Harksen en la conformación de la base de datos utilizada y de José Antonio Licandro por sus útiles comentarios.
ABSTRACT Course description This course deals with the implications of financial globalization fo... more ABSTRACT Course description This course deals with the implications of financial globalization for emerging-market countries, and specifically with the pros and cons of attracting direct investment and portfolio flows; the peculiarities of global capital movements, such as "contagion" and "sudden stop" phenomena; the roles of credit rating agencies and the IMF in facilitating access to international lenders and investors; the importance of currency and maturity mismatches; the effectiveness (or not) of controls on capital flows; and the relationship between capital flows, overindebtedness and sovereign debt defaults. Our readings consist of the latest empirical and policy writings on the various topics, as opposed to theoretical papers or classical works from earlier years, and they are drawn from a variety of authors around the globe that are doing state-of-the-art research. By the end of the course, you will have an in-depth understanding of the international financial problems that developing countries should strive to avoid - and of the major policy implications that follow. The learning objective of this course, which will be tested in various ways, is familiarity with the essential vocabulary, analytical tools, theoretical concepts, practical applications, institutional features, and economic policy aspects of international finance relevant to the emerging markets. Course requirements and grading During most of each class, I will cover the main ideas conveyed by the assigned readings, and during the remainder I will answer questions and guide a class discussion of the topic at hand. In order to reap the benefits from the course, you should plan on attending every class and on doing all of the required readings before coming to class. To encourage reading ahead of class, there will be a few "surprise" quizzes handed out during the semester, at the start of some of the classes. There is no need to purchase any books; all the required readings are posted on Blackboard.
This paper presents the results of a first comparative case study of exchange rate policy in coun... more This paper presents the results of a first comparative case study of exchange rate policy in countries with rates of domestic inflation significantly and persistently above the world average. The analysis centers on Argentina, Brazil, Chile, and Uruguay, countries which, for at least two decades, have had (and continue) to formulate their exchange rate policies within the context of annual inflation rates averaging over 30 percent. These countries were selected because they are the ones with the longest and most severe history of inflation in Latin America and, as such, had to follow an active exchange rate policy long before the present system of floating exchange rates came into being. A period of approximately 16 years (roughly 1957-72, depending on the available data) was chosen because it provides a sufficiently long time span to examine the evolution of exchange rate policy. On the basis of this historical analysis, some observations are made on exchange rate policy developments since 1972.
Banks and corporations accounted for 57% of the total raised. These data were kindly provided by ... more Banks and corporations accounted for 57% of the total raised. These data were kindly provided by Bloomberg, and are available upon request. 2 This author's estimates, based on official balance of payments data, are that net capital outflows excluding government and central bank transactions, and errors and omissions, averaged over $8 billion per annum in Argentina during 2004-2009. The Institute of International Finance estimates that capital flight ('net resident lending abroad') averaged nearly $7 billion per year during the same period. Estimates are available upon request.
ABSTRACT A survey of the growing significance of general indirect taxes lo macroeconomic policy ... more ABSTRACT A survey of the growing significance of general indirect taxes lo macroeconomic policy and an investigation of their properties within the context of a twelve-equation macromodel. The author shows that, even under varying labor-market assumptions, general indirect taxes have contradictory effects on the aggregate level of prices and can only be relied upon to affect unemployment levels. An additional simulation study is conducted to show how general indirect taxation compares with government spending as a policy tool, illustrating once again how the former cannot be relied upon to function as an instrument of anti-inflationary fiscal policy.
Top International Monetary Fund (IMF) and U.S. Treasury officials have put forth proposals design... more Top International Monetary Fund (IMF) and U.S. Treasury officials have put forth proposals designed to make it eventually easier for governments and bond-holders to go through a debt-workout process. Their intent is to enable the G7 governments to scale back their multi-billion-dollar bailout programs for countries in financial difficulty on the theory that, if the road to default was paved rather than bumpy, more of them would choose to take it rather than seek large-scale financial support. Experience strongly suggests, however , that the absence of better bankruptcy procedures has not impeded several debt workouts; that in cases when the bankruptcy option was available, it was nevertheless avoided; and that even if the IMF and Treasury initiatives had been in place in 2001, the tragedy in Argentina would not have been prevented. The best way for the G7 and the IMF to extricate themselves from the current morass is by curbing sharply the financial help that they offer to countries in trouble.
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Papers by Arturo Porzecanski