Inflation Targeting Matters: Evidence from OECD Economies` Sacrifice Ratios

Using data from OECD economies, we show that inflation targeters suffered smaller output losses during disinflations when compared to nontargeters. We also study why some countries choose to inflation target while others do not and find that higher average inflation and smaller debt levels render the adoption of the regime more likely. Applying Heckman`s procedure to control for selection bias does not alter the link between inflation targeting and less costly disinflations.

Inflation targeting in emerging economies: What do the data say?

In a recent thought-provoking paper, Ball and Sheridan [Ball, L., Sheridan, N., 2005. Does inflation targeting matter? In: Bernanke, B.S., Woodford, M. (Eds.), The Inflation-Targeting Debate, University of Chicago Press] show that the available evidence for a group of developed economies does not lend credence to the belief that adopting an inflation targeting regime (IT) was instrumental in bringing inflation and inflation volatility down. Here, we extend Ball and Sheridan`s analysis for a subset of 36 emerging market economies and find that, for them, the story is quite different. Compared to non-targeters, developing countries adopting the IT regime not only experienced greater drops in inflation, but also in growth volatility, thus corroborating the view that the regime`s ""constrained flexibility"" to deal with adverse shocks delivered concrete welfare gains. (c) 2006 Elsevier B.V. All rights reserved.

Cooperation, interaction and learning in local production systems: Evidence in Brazilian firms

In a local production system (LPS), besides external economies, the interaction, cooperation, and learning are indicated by the literature as complementary ways of enhancing the LPS's competitiveness and gains. In Brazil, the greater part of LPSs, mostly composed by small enterprises, displays incipient relationships and low levels of interaction and cooperation among their actors. The size of the participating enterprises itself for specificities that engender organizational constraints, which, in turn, can have a considerable impact on their relationships and learning dynamics. For that reason, it is the purpose of this article to present an analysis of interaction, cooperation, and learning relationships among several types of actors pertaining to an LPS in the farming equipment and machinery sector, bearing in mind the specificities of small enterprises. To this end, the fieldwork carried out in this study aimed at: (i) investigating external and internal knowledge sources conducive to learning and (ii) identifying and analyzing motivating and inhibiting factors related to specificities of small enterprises in order to bring the LPS members closer together and increase their cooperation and interaction. Empirical evidence shows that internal aspects of the enterprises, related to management and infrastructure, can have a strong bearing on their joint actions, interaction and learning processes.

Biofuels and Sustainable Energy Development in Brazil

Through the assessment of three decades of the Alcohol Program in Brazil, the paper shows that adequate public policies regarding biomass production can deliver direct benefits like energy security improvement, foreign exchange savings, and local employment generation, reduced urban air pollution and avoided CO(2) emissions. Moreover, the paper shows that Brazilian produced ethanol has faced economies of scale, technical progress and productivity gains and is no longer dependent on subsidies to be competitive. The paper also examines the potential in Brazil for fostering other biofuels, namely biodiesel obtained from vegetable oils, as well as their implications on sustainable energy development. (C) 2011 Elsevier Ltd. All rights reserved.

Using economic instruments to address emissions from air transport in the European Union

Air transport has become a vital component of the global economy. However, greenhouse-gas emissions from this sector have a significant impact on global climate, being responsible for over 3.5% of all anthropogenic radiative forcing. Also, the accrued visibility of aircraft emissions greatly affects the public image of the industry. In this context, incentive-based regulations, in the form of price or quantity controls, can be envisaged as alternatives to mitigate these emissions. The use of environmental charges in air transport, and the inclusion of the sector in the European Union Emissions Trading Scheme (EU ETS), are considered under a range of scenarios. The impacts of these measures on demand are estimated, and results suggest that they are likely to be minimal-mainly due to the high willingness to pay for air transport. In particular, in the EU ETS scenario currently favoured by the EU, demand reductions are less than 2%. This may not be true in the longer run, for short trips, or if future caps become more stringent. Furthermore, given current estimates of the social Cost Of CO2 as well as typical EU ETS prices, supply-side abatement would be too costly to be encouraged by these policies in the short term. The magnitude of aviation CO2 emissions in the EU is estimated, both in physical and monetary terms; the results are consistent with Eurocontrol estimates and, for the EU-25, the total social cost of these emissions represents only 0.03% of the region`s GDP. It is concluded that the use of multisector policies, such as the EU ETS, is unsuitable for curbing emissions from air transport, and that stringent emission charges or an isolated ETS would be better instruments. However, the inclusion of aviation in the EU ETS has advantages under target-oriented post-2012 scenarios, such as policy-costs dilution, certainty in reductions, and flexibility in abatement allocation. This solution is also attractive to airlines, as it would improve their public image but require virtually no reduction of their own emissions, as they would be fully capable of passing on policy costs to their customers.

Import substitution and economic growth

Despite Latin America`s dismal performance between the 1950s and 1980s, the region experienced strong capital deepening. We suggest that these facts can be explained as a consequence of the restrictive trade regime adopted at that time. Our framework is based on a dynamic Heckscher-Ohlin model, with scale economies in the capital-intensive sector. Initially, the economy is open and produces only the labor-intensive good. The trade regime is modeled as a move to a closed economy. The model produces results consistent with the Latin American experience. Specifically, a Sufficiently small Country experiences no long-run income growth, but an increase in capital. (C) 2009 Elsevier B.V. All rights reserved.

STRUCTURAL INTERDEPENDENCE AMONG COLOMBIAN DEPARTMENTS

This paper analyzes structural interdependence among Colombian departments. The results show that Bogota has a large influence on the other regional economies through the power of its purchases. Additionally, a center-periphery pattern emerges in the spatial concentration of the effects of the hypothetical extraction of any territory. From a policy point of view, the main findings reaffirm the role played by Bogota in the recent polarization process observed in the regional economies in Colombia. Any policy action oriented to reduce these regional disparities should take into account that, given the structural interdependence among Colombian departments, the effects of new investment in the lagged regions would flow through Bogota and the major regional economies.

Spatial aspects of trade liberalization in Colombia: A general equilibrium approach

This paper offers some preliminary steps in the marriage of some of the theoretical foundations of new economic geography with spatial computable general equilibrium models. Modelling the spatial economy of Colombia using the traditional assumptions of computable general equilibrium (CGE) models makes little sense when one territorial unit, Bogota, accounts for over one quarter of GDP and where transportation costs are high and accessibility low compared to European or North American standards. Hence, handling market imperfections becomes imperative as does the need to address internal spatial issues from the perspective of Colombia`s increasing involvement with external markets. The paper builds on the Centro de Estudios de Economia Regional (CEER) model, a spatial CGE model of the Colombian economy; non-constant returns and non-iceberg transportation costs are introduced and some simulation exercises carried out. The results confirm the asymmetric impacts that trade liberalization has on a spatial economy in which one region, Bogota, is able to more fully exploit scale economies vis--vis the rest of Colombia. The analysis also reveals the importance of different hypotheses on factor mobility and the role of price effects to better understand the consequences of trade opening in a developing economy.

Correlation of business cycles in the euro zone

In this short article we use a simple differences-in-clifferences technique to investigate whether bilateral correlation of business cycles increased more amongst members of the European Monetary Union (EMU) after the implementation of the Euro than amidst other OECD economies. We present evidence suggesting this to be the case. (C) 2008 Elsevier B.V. All rights reserved.

Assessing the ex ante economic impacts of transportation infrastructure policies in Brazil

This paper uses a fully operational inter-regional computable general equilibrium (CGE) model implemented for the Brazilian economy, based on previous work by Haddad and Hewings, in order to assess the likely economic effects of road transportation policy changes in Brazil. Among the features embedded in this framework, modelling of external scale economies and transportation costs provides an innovative way of dealing explicitly with theoretical issues related to integrated regional systems. The model is calibrated for 109 regions. The explicit modelling of transportation costs built into the inter-regional CGE model, based on origin-destination flows, which takes into account the spatial structure of the Brazilian economy, creates the capability of integrating the inter-regional CGE model with a geo-coded transportation network model enhancing the potential of the framework in understanding the role of infrastructure on regional development. The transportation model used is the so-called Highway Development and Management, developed by the World Bank, implemented using the software TransCAD. Further extensions of the current model specification for integrating other features of transport planning in a continental industrialising country like Brazil are discussed, with the goal of building a bridge between conventional transport planning practices and the innovative use of CGE models. In order to illustrate the analytical power of the integrated system, the authors present a set of simulations, which evaluate the ex ante economic impacts of physical/qualitative changes in the Brazilian road network (for example, a highway improvement), in accordance with recent policy developments in Brazil. Rather than providing a critical evaluation of this debate, they intend to emphasise the likely structural impacts of such policies. They expect that the results will reinforce the need to better specifying spatial interactions in inter-regional CGE models.

Dissolved organic carbon in rainwater from areas heavily impacted by sugar cane burning

This work reports on rainwater dissolved organic carbon (DOC) from Ribeirao Preto (RP) and Araraquara over a period of 3 years. The economies of these two cities, located in Sao Paulo state (Brazil), are based on agriculture and related industries, and the region is strongly impacted by the burning of sugar cane foliage before harvesting. Highest DOC concentrations were obtained when air masses traversed sugar cane fields burned on the same day as the rain event. Significant increases in the DOC volume weighted means (VWM) during the harvest period, for both sites, and a good linear correlation (r=0.83) between DOC and K (a biomass burning marker) suggest that regional scale organic carbon emissions prevail over long-range transport. The DOC VWMs and standard deviations were 272 +/- 22 mu mol L-1 (n=193) and 338 +/- 40 mu mol L-1 (n=80) for RP and Araraquara, respectively, values which are at least two times higher than those reported for other regions influenced by biomass burning, such as the Amazon. These high DOC levels are discussed in terms of agricultural activities, particularly the large usage of biogenic fuels in Brazil, as well as the analytical method used in this work, which includes volatile organic carbon when reporting DOC values. Taking into account rainfall volume, estimated annual rainwater DOC fluxes for RP (4.8 g C m(-2) yr(-1)) and Araraquara (5.4 g C m(-2) yr(-1)) were close to that previously found for the Amazon region (4.8 g C m(-2) yr(-1)). This work also discusses whether previous calculations of the global rainwater carbon flux may have been underestimated, since they did not consider large inputs from biomass combustion sources, and suffered from a possible analytical bias. (c) 2008 Elsevier Ltd. All rights reserved.

Acute care surgeon South American model

Background In the World Health Organization book by Murray and Lopez (The Global Burden of Disease), the authors make the point that there are major regional differences across the world for death from injury. In the European market economies, injuries accounted for 6% of all deaths, of which the majority were the result of road traffic accidents. In stark contrast, in Latin America and the Caribbean, injuries account for 12-13% of all deaths, and most of these are the result of violence. An estimated 30% of all male deaths are from external causes, and road traffic accidents are the number two cause of death. Within South American countries, trauma is the second most common cause of death in Columbia, Venezuela, Ecuador, and Brazil. In other South American countries, it is the third or fourth most common cause of death. If one examines the Disability Adjusted Life Years, South America is the third highest in the world. Death from injury primarily affects people in the middle- and low-income group. Traffic accidents and suicide are the main causes of trauma in the high-income population. South America is made up of developing and poor countries that have trauma as a very important cause of death and disability. Methods The author has reviewed information on injury from the World Health Organization, Pan American Health Organization, and Brazilian Health Ministry. In addition, a search of injury was performed through MEDLINE. Results and Conclusions The results of this review show that trauma is a major public health problem in South America. At the present time, there is a lack of statewide system development. In addition, there are difficulties in training surgeons to cope with these problems.

Response to AIDS in Brazil: contributions of social movements and the sanitary reform

This paper briefly outlines how the political scenario and the mobilization of different actors have contributed to the construction of a public health policy in response to the AIDS epidemics in Brazil. Three factors are presented and discussed: the political context of the 1980s, characterized by redemocratization, growth of social movements, and consolidation of the Brazilian health care reform; the socio-cultural context of the 1970s and 1980s, characterized by achievement of individual freedom, which was key to the organization of the AIDS movement; and finally the actions carried out in the international scenario to support the sustainability of the Brazilian domestic policy and the reinforcement of a global response to face the epidemics in lower-middle income economies.