Departamento de Economía

This paper analyzes the impact that social public policies might have had on the  economic growth of Argentina, Brazil, Colombia, Chile, Mexico, and Venezuela during the period of 1980 to 2010. It also examines the hypothesis of convergence in these countries. To accomplish this goal, it uses panel data analysis on data extracted  from the CEPAL and the Penn World Table databases. Empirical results are consistent with those found by Barro and Lee (1991), Caselli, Esquivel, and Lefort (1996), and Barro and Sala-i-Martin (2004). In other words, it was found that social public policies have positively influenced growth in these economies. Particularly, it was found that there are non-observed variables (fixed effects) that positively affect the economic growth in Venezuela and Chile; meanwhile there are other non-observed variables that might be negatively affecting growth in Brazil and Mexico. Regarding the convergence hypothesis, results reveal that the speed of convergence diminishes as real income rises, implying that these countries might be converging to their steady states.

By means of an economic convergence index and the analysis of correlations between several macroeconomic aggregates, this paper approaches the problem of economic convergence among country members of the Pacific Alliance and MERCOSUR. Data were extracted from different sources and refers to the 1980 – 2014 period. Empirical results are not conclusive. It is not possible to determine the path that these two major blocs must follow to conquer an expanded and deeper economic integration, although the patterns followed by the member country decisions for a greater economic convergence suggest that this may be feasible in the medium and long run. The economic convergence index shows this tendency. However, correlation analysis does not allow establishing a definite answer.

Given the lack of consensus on the impact of financial innovations on money demand, this paper investigates on the stability of the long-run demand for real balances in Venezuela facing financial innovations for the period 1984Q1- 2008Q4 and by means of cointegration analysis. Two proxys for financial innovation were used: the ratio currency/deposits (CD) and a ratchet variable (RCD) built on the previous one. Empirical evidence suggests that there exist a stable long-run relationship among the log of real balances, the log of real income, the real interest rate, the inflation rate, the depreciation of domestic currency and RCD and this relationship could be interpreted as a demand for real balances. Results reveal that when new financial instruments are introduced, the demand for real balances diminishes. This suggests that economic agents allocate resources differently affecting their portfolio composition and the demand for real money. This result is typical in economies with high and persistent inflation rates, balance of payment crisis, exchange rate instability and political and economic uncertainty.

This paper presents a theoretical model of aggregate supply and demand that helps
explain the propagation effects of economic policy and the terms of trade on macroeconomic aggregates in a small open economy with two sectors and under a fixed exchange rate regime. Contrary to traditional results, a devaluation does not affect real economic activity but causes inflation. Likewise, an increase in the price of export product causes two simultaneous effects. Increases aggregate supply because by increasing output in the export sector and rises aggregate demand. Depending on which effect dominates, domestic prices might increase, decrease or remain constant.

This paper studies the link between savings and international trade as determinants of investment in some Latin American countries during 1951-2000 using the panel data technique. The empirical results show that investment rate differentials among Latin American countries are explained, among others, by these determinants. We show that by each 10 points of increase of the saving rate, it makes the investment rate increase by 0.05 points. Regarding international trade, if the rate of international trade to GDP rises by 10 percent points, then the investment rate will increase by 0.01 percent points. Finally, the results allow us to conclude that the potency of
economic policies aimed to increase the rate of investment in Latin American countries could be improved if these come accompanied by other long lasting incentives on savings, international trade and economic growth, otherwise these effects would be diluted through time.

This paper presents a theoretical model of aggregate supply and demand in a small
economy with two productive sectors, under a flexible exchange regime and imperfect capital mobility. Only one of the production sectors is assumed to produce an exportable commodity sold at world market prices, while the production of the other sector is assumed to supply the domestic market. This model helps to explain how the impact of both domestic (economic policy, productivity, etc.) and foreign (changes in exchange terms) shocks is spread. In every case studied, results show that real output increases consistently with those cases postulated by economic theory. Conversely, the effects on the price level, the exchange rate and the real interest rate are ambiguous. In terms of domestic shocks, fiscal or monetary policy may be seen as a way to stabilize or stimulate the economy but the costs involved raise the price level.

El presente trabajo utiliza la técnica de Growth Accounting para determinar las fuentes del crecimiento económico de Venezuela durante 1950-2002. Los resultados empíricos muestran que aun cuando el stock neto de capital creció a una tasa superior al 3,8% y el empleo al 3,6%, el producto interno bruto sólo lo hizo a una tasa del 3,3%. Una posible explicación de este fenómeno se debe a la tendencia decreciente mostrada por la productividad multifactorial, cuya tasa de crecimiento interanual oscila entre 0,05% y -0,48% para el periodo completo (-0.89% y -1,31% cuando el capital humano es incluido). Es decir, que las fuentes del crecimiento económico experimentado por la economía venezolana durante 1950-2002 se encuentran en un acelerado proceso de acumulación de factores; no obstante, el cambio en la tendencia del producto observada después de 1980 podría tener su origen en la caída de la inversión neta como consecuencia del aumento continuo y sostenido del costo del capital y sus consecuencias sobre la productividad.

This paper studies how the socialpolitical and judicial factors have affected private investment in Venezuela and Latin America for the period 1995-2003 by means of panel data analysis. In the case of Venezuela, there is evidence that the fall in the investment rate in Venezuela has been caused by these factors. In this way, it is necessary that not only the Venezuelan government but also the other Latin
American governments begin working on the creation and strengthening of institutions so that risks are reduced and stability is enhanced. In this way, it is
possible to endorse a sustained economic growth and better standards of living for Latin American citizens.

This paper presents an evaluation of how feasible would the establishment of a monetary union amongst the South American countries considering the methodology of the macroeconomic convergence degree. The empirical results indicate that a monetary union in South America is possible only if the governments commit themselves to establish and fulfill the rules of previous agreements on regional economic integration with the purpose of improving not only multilateral trade but also economic cooperation among them. According to the economic convergence index, it was found that South American economies, excluding Bolivia, have degrees of convergence similar to the corresponding for members of EMU, excluding Portugal and Ireland. Brazil is the economy that exhibits the best (the lowest) convergence index while Bolivia reveals the highest. The analysis of partial correlations does not show results as promising as the ones shown by the degree of convergence. On the contrary, these contrast with the ones obtained for European countries.

This paper studies the relationship between social-political and judicial factors and private investment in Latin America during 1995-2003 by means of panel data analysis. The empirical evidence suggests that investment rate differentials, not only among Latin American countries but also with developed countries might have been caused by these factors. Countries with a neutral and strong judicial system might see their investment rates increase by as much as 2.29 percentage points. Regarding the social-political factor, it is worth to emphasize that significant improvement in political institutions, control on corruption, and better access to political and civil rights could cause the investment rate to increase by 1.84 percentage points. At last, if Latin American countries want to attract new investments, increase their economic growth possibilities, and improve their
population standard of living, their governments must start working on the strengthening and creation of political institutions that permit to abolish or at least diminish corruption levels, civil rights repression, the loss of political rights, and on enhancing the judicial system.

El presente trabajo examina los costos y beneficios de diferentes alternativas de unificación monetaria y los compara con los correspondientes costos y beneficios de mantener la discrecionalidad de una política monetaria independiente para los países suramericanos. De manera más precisa, se pretende evaluar mediante el análisis de correlaciones entre las tasas de inflación, correlaciones de los ciclos económicos, volatilidad del crecimiento económico y correlaciones entre la variabilidad de la tasas de cambio cuál o cuáles de los escenarios u opciones alternativas propuestas se consideraría más efectiva por sus efectos macroeconómicos. Los principales resultados de esta investigación señalan que dolarizar la economía sin conformar una unión monetaria es la alternativa más factible para algunos países suramericanos ya que representa menores costos en términos de volatilidad del producto y una menor tasa de inflación. Por otra parte, dadas las asimetrías existentes entre los países y la posibilidad de shocks asimétricos y el bajo grado de intercambio comercial entre los mismos, imponen severas restricciones a la unificación monetaria ya que los costos superan los beneficios que los países pudieran obtener en caso de seleccionarse esta alternativa.

This paper uses a Cholesky Factorization in a var analysis to investigate the relative
importance of foreign and domestic shocks in the Venezuelan economy during the 1960:i-2004:ii period. The economy is assumed to be driven by foreign (U. S. gdp and oil prices) and domestic (exchange rate, fiscal, monetary, inflation, and output) orthogonal shocks. As shown by the empirical evidence foreign shocks tend to be relatively more important than domestic shocks. Precisely, oil price and U. S. gdp shocks tend to have permanent effects on the main macroeconomic aggregates. Monetary policy only has temporary effects on output and the nominal exchange rate.

El presente análisis examina la factibilidad de adoptar una moneda común, o  mantener un régimen monetario independiente, para los países sudamericanos  desde la perspectiva de dos metodologías diferentes: los criterios de convergencia económica y el análisis de costos y beneficios. En otras palabras, se pretende evaluar, haciendo uso del índice de convergencia económica y de los análisis de correlaciones y de cointegración entre las tasas de inflación, ciclos económicos, volatilidad del crecimiento económico y variabilidad de la tasas de cambio, cuán factible es la conformación de un área monetaria óptima para la región.

Este trabajo presenta un análisis de las ventajas y desventajas para que los países miembros de UNASUR adopten el sucre, la moneda virtual del ALBA (Alternativa Bolivariana para las Américas) bien como moneda virtual o como moneda común, dando por hecho que los avances en la integración suramericana hacia una unión monetaria continuarán progresivamente. Para ello, se presenta, en primer lugar, una revisión de la literatura sobre la factibilidad de una unión monetaria suramericana y de la utilización de una moneda común. En segundo lugar, el análisis se centrará en determinar las ventajas y desventajas de que, por una parte, cada país continúe  manteniendo su moneda (independiente) y fije su paridad cambiaria respecto al SUCRE, manteniéndose este último como moneda virtual para las transacciones comerciales y financieras, y por la otra, la adopción del sucre como moneda común para los países de UNASUR, cumpliendo con las tres funciones que se le asignan al dinero: medio de pago, reserva de valor y unidad de cuenta.

This paper presents an aggregate demand and supply model for the Venezuelan economy assuming two productive sectors (oil and non-oil), a fixed exchange rate regime and cero capital mobility. This model helps explain the impacts that domestic (fiscal, monetary productivity, etc.) and foreign shocks have on real output and the price level. Although results are consistent with economic theory, it is necessary to emphasize that a Bolivar devaluation contracts real output and raises the price level and that an oil price increase causes an increase in real output but triggers an ambiguous effect on the price level.

This paper analyzes the convergence hypothesis and the impact of social policy on the economic growth of the six largest countries in Latin America between 1980 and 2010. Results suggest that social public policies have positively influenced growth  in  these  economies.  Particularly,  there  are  non-observed  variables  (fixed  effects) that positively affect the economic growth in Venezuela and Chile; however, there are other non-observed variables that may be negatively affecting growth in Brazil and Mexico. Regarding the convergence hypothesis, results reveal that the speed of convergence diminishes as real income rises, implying that these countries might be converging to their stable states.