Lumpiness, capital adjustment costs and investment dynamics

Aggregate investment in the US economy displays a hump-shaped pattern in response to shocks, and the autocorrelation of aggregate investment growth is positive for the first few quarters, turning negative for the later quarters. This paper shows that this feature of the data is the natural outcome of a two-sector consumption/investment model designed and calibrated to reproduce plant-level evidence on capita: accumulation. (C) 2012 Elsevier B.V. All rights reserved.

Brazil in Africa: Another Emerging Power in the Continent?

This paper develops three basic arguments. First, it presents the basic underpinnings of Brazilian diplomacy in the past half century, concentrating on the changes adopted in the 1980s and the 1990s up to the foreign policy put forward by Lula`s government (2003-2009). It recognises that Lula`s foreign policy represents a step forward, especially where Africa is concerned. However, it does not seem to be clear whether the Brazilian economy has enough strength to sustain such a foreign policy, as is shown in the second part of the paper. This is indeed the case if comparisons are made with India, China and even South Africa, when the latter`s regional role is considered. Finally, an effort is made to summarise the recent political cooperation established between Brazil and African countries as well as to present an overview of Brazil`s trade and investment relations both with the region as a whole and with some important individual partners. Once this picture is established, we investigate whether these realmsdiplomatic/political and economictake independent tracks, or if they do interact in a coherent manner. Africa remained deep inside Brazil and Brazilians, not as something external to ourselves. But as a mythic space; neither geographical, nor historical.