On choice of technique in the Robinson-Solow-Srinivasan model

We report results on the optimal \choice of technique" in a model originally formulated by Robinson, Solow and Srinivasan (henceforth, the RSS model) and further discussed by Okishio and Stiglitz. By viewing this vintage-capital model without discounting as a speci c instance of the general theory of intertemporal resource allocation associated with Brock, Gale and McKenzie, we resolve longstanding conjectures in the form of theorems on the existence and price support of optimal paths, and of conditions suÆcient for the optimality of a policy rst identi ed by Stiglitz. We dispose of the necessity of these conditions in surprisingly simple examples of economies in which (i) an optimal path is periodic, (ii) a path following Stiglitz' policy is bad, and (iii) there is optimal investment in di erent vintages at di erent times. (129 words)

Optimal auctions with multidimensional types and the desirability of exclusion

Within the context of a single-unit, independent private values auction model, we show that if bidder types are multidimensional, then under the optimal auction exclusion of some bidder types will occur. A second contribution of the paper is methodological in nature. In particular, we identify conditions under which an auction model with multidimensional types can be reduced to a model with one dimensional types without loss of generality. Reduction results of this type have achieved the status of folklore in the mechanism design literature. Here, we provide a proof of the reduction result for auctions.

O Brasil precisa de política industrial? De que tipo?

Este trabalho discute a conveniência do uso de políticas industrias no Brasil. Argumenta-se que o sucesso dos países do Leste Asiático, muitas vezes relacionado ao uso de política industrial (PI), é resultado principalmente de políticas horizontais. Além disso, aponta-se que a maioria dos argumentos utilizados para justificar a adoção de PI carece de fundamentação teórica e empírica e que PI deve ser motivada por algum tipo de falha de mercado. Nesse sentido, faz-se uma breve descrição das falhas de mercado que teoricamente justificariam algum tipo de PI, avalia-se a relevância empírica destas falhas e quais as ferramentas de intervenção seriam mais adequadas (se for o caso). A partir disso, avalia-se a atual política industrial brasileira, tal como descrita em Brasil (2003). Por fim, conclui-se que políticas horizontais, além de estarem menos sujeitas à pressão de grupos organizados, possuem maior potencial para impulsionar o crescimento econômico brasileiro.

Uncertainty aversion and the optmal choice of portfolio

In this paper we apply the theory of declsion making with expected utility and non-additive priors to the choice of optimal portfolio. This theory describes the behavior of a rational agent who i5 averse to pure 'uncertainty' (as well as, possibly, to 'risk'). We study the agent's optimal allocation of wealth between a safe and an uncertain asset. We show that there is a range of prices at which the agent neither buys not sells short the uncertain asset. In contrast the standard theory of expected utility predicts that there is exactly one such price. We also provide a definition of an increase in uncertainty aversion and show that it causes the range of prices to increase.

Retornos em educação no Brasil: 1976/1986

As taxas de retorno pessoais dos investimentos em educação no Brasil são calculadas com base nos dados das PNADs, utilizando-se metodologia desenvolvida por Mincer (1974). As principais conclusões são: (i) os retornos em educação estão elevadíssimos, ao redor de 15% reais ao ano; (ii) os retornos em educação estão-se elevando ao longo do período estudado o que sinaliza que a distribuição de renda deve ter piorado; (iii) os aumentos das taxas de retorno em educação ocorreram de maneira mais incisiva sobrecursos secundários e superior, um agravante ainda maior para a distribuição de renda, já que são as faixas de rendas mais elevadas; (iv) as taxas de retorno mais elevadas são, atualmente, do secundário e do primário iniciante (1.ª a 4.ª séries); (v) o primário avançado, (5.ª a 8.ª séries, o antigo ginásio) apresenta retornos substancialmente menores que os outros níveis.

Trade and poverty in latin american countries: conceptual and methodological challenges

This paper addresses topics - either relevant or confusing or needing more attention - related to measuring the trade and poverty nexus. It sheds a critical light on the existing material and suggests needed research lines. It starts with questions akin to the LAC realities; then, keeping this view, general methodological issues are also examined. In a broader perspective, further ideas for the research agenda are formulated. The main conclusion is that relevant findings still demand considerable efforts. Moreover, the Information-measurement-model-evaluation paradigm is not enough, policy guidelines being usually too general. In LAC, it must be extended and deepened, accounting more for the heterogeneity of cases, including, whenever possible, the physical constraints and incorporating new ways of integrating both the local and global perspectives. Other aspects, like the role of specific juridical measures, should play a role. How all this can be combined into more encompassing evaluations remains open

Past and future of the bankruptcy law in Brazil and Latin America

This paper studies the Bankruptcy Law in Latin America, focusing on the Brazilian reform. We start with a review of the international literature and its evolution on this subject. Next, we examine the economic incentives associated with several aspects of bankruptcy laws and insolvency procedures in general, as well as the trade-offs involved. After this theoretical discussion, we evaluate empirically the current stage of the quality of insolvency procedures in Latin America using data from Doing Business and World Development Indicators, both from World Bank and International Financial Statistics from IMF. We find that the region is governed by an inefficient law, even when compared with regions of lower per capita income. As theoretical and econometric models predict, this inefficiency has severe consequences for credit markets and the cost of capital. Next, we focus on the recent Brazilian bankruptcy reform, analyzing its main changes and possible effects over the economic environment. The appendix describes difficulties of this process of reform in Brazil, and what other Latin American countries can possibly learn from it.