The brazilian education quality index (Ideb): measurement and incentives upgrades

The increasing availability of social statistics in Latin America opens new possibilities in terms of accountability and incentive mechanisms for policy makers. This paper addresses these issues within the institutional context of the Brazilian educational system. We build a theoretical model based on the theory of incentives to analyze the role of the recently launched Basic Education Development Index (Ideb) in the provision of incentives at the sub-national level. The first result is to demonstrate that an education target system has the potential to improve the allocation of resources to education through conditional transfers to municipalities and schools. Second, we analyze the local government’s decision about how to allocate its education budget when seeking to accomplish the different objectives contemplated by the index, which involves the interaction between its two components, average proficiency and the passing rate. We discuss as well policy issues concerning the implementation of the synthetic education index in the light of this model arguing that there is room for improving the Ideb’s methodology itself. In addition, we analyze the desirable properties of an ideal education index and we argue in favor of an ex-post relative learning evaluation system for different municipalities (schools) based on the value added across different grades

Government actions to support coffee producers - an investigation of possible measures from the European Union

We outline possible actions to be adopted by the European Union to ensure a better share of total coffee revenues to producers in developing countries. The way to this translates, ultimately, in producers receiving a fair price for the commodity they supply, i.e., a market price that results from fair market conditions in the whole coffee producing chain. We plead for proposals to take place in the consuming countries, as market conditions in the consuming-countries side of the coffee producing chain are not fair; market failures and ingenious distortions are responsible for the enormous asymmetry of gains in the two sides. The first of three proposals for consumer government supported actions is to help in the creation of domestic trading companies for achieving higher export volumes. These tradings would be associated to roasters that, depending on the final product envisaged, could perform the roasting in the country and export the roasted – and sometimes ground – coffee, breaking the increasing importers-exporters verticalisation. Another measure would be the systematic provision of basic intelligence on the consuming markets. Statistics of the quantities sold according to mode of consumption, by broad “categories of coffee” and point of sale, could be produced for each country. They should be matched to the exports/imports data and complemented by (aggregate) country statistics on the roasting sector. This would extremely help producing countries design their own market and producing strategies. Finally, a fund, backed by a common EU tax on roasted coffee – created within the single market tax harmonisation programme, is suggested. This European Coffee Fund would have two main projects. Together with the ICO, it would launch an advertising campaign on coffee in general, aimed at counterbalancing the increasing “brandification” of coffee. Basic information on the characteristics of the plant and the drink would be passed, and the effort could be extended to the future Eastern European members of the Union, as a further assurance that EU processors would not have a too privileged access to these new markets. A quality label for every coffee sold in the Union could complement this initiative, helping to create a level playing field for products from outside the EU. A second project would consist in a careful diversification effort, to take place in selected producing countries.

Vintage capital, distortions and development

This paper asks to what extent distortions to the adoption of new technology cause income inequality across nations. We work in the framework of embodied technological progress with an individual, C.E.S. production function. We estimate the parameters of this production function from international data and calibrate the model, using U.S. National Income statistics. Our analysis suggests that distortions account for a bigger portion of income inequality than hitherto has been assessed.

Estimating and forecasting the volatility of Brazilian finance series using arch models (Preliminary Version)

The goal of this paper is to present a comprehensive emprical analysis of the return and conditional variance of four Brazilian …nancial series using models of the ARCH class. Selected models are then compared regarding forecasting accuracy and goodness-of-…t statistics. To help understanding the empirical results, a self-contained theoretical discussion of ARCH models is also presented in such a way that it is useful for the applied researcher. Empirical results show that although all series share ARCH and are leptokurtic relative to the Normal, the return on the US$ has clearly regime switching and no asymmetry for the variance, the return on COCOA has no asymmetry, while the returns on the CBOND and TELEBRAS have clear signs of asymmetry favoring the leverage e¤ect. Regarding forecasting, the best model overall was the EGARCH(1; 1) in its Gaussian version. Regarding goodness-of-…t statistics, the SWARCH model did well, followed closely by the Student-t GARCH(1; 1)

Using common features to understand the behavior of metal-commodity prices and forecast them at different horizons

The objective of this article is to study (understand and forecast) spot metal price levels and changes at monthly, quarterly, and annual horizons. The data to be used consists of metal-commodity prices in a monthly frequency from 1957 to 2012 from the International Financial Statistics of the IMF on individual metal series. We will also employ the (relatively large) list of co-variates used in Welch and Goyal (2008) and in Hong and Yogo (2009) , which are available for download. Regarding short- and long-run comovement, we will apply the techniques and the tests proposed in the common-feature literature to build parsimonious VARs, which possibly entail quasi-structural relationships between different commodity prices and/or between a given commodity price and its potential demand determinants. These parsimonious VARs will be later used as forecasting models to be combined to yield metal-commodity prices optimal forecasts. Regarding out-of-sample forecasts, we will use a variety of models (linear and non-linear, single equation and multivariate) and a variety of co-variates to forecast the returns and prices of metal commodities. With the forecasts of a large number of models (N large) and a large number of time periods (T large), we will apply the techniques put forth by the common-feature literature on forecast combinations. The main contribution of this paper is to understand the short-run dynamics of metal prices. We show theoretically that there must be a positive correlation between metal-price variation and industrial-production variation if metal supply is held fixed in the short run when demand is optimally chosen taking into account optimal production for the industrial sector. This is simply a consequence of the derived-demand model for cost-minimizing firms. Our empirical evidence fully supports this theoretical result, with overwhelming evidence that cycles in metal prices are synchronized with those in industrial production. This evidence is stronger regarding the global economy but holds as well for the U.S. economy to a lesser degree. Regarding forecasting, we show that models incorporating (short-run) commoncycle restrictions perform better than unrestricted models, with an important role for industrial production as a predictor for metal-price variation. Still, in most cases, forecast combination techniques outperform individual models.

Approximate recursive equilibrium with minimal state space

This paper shows existence of approximate recursive equilibrium with minimal state space in an environment of incomplete markets. We prove that the approximate recursive equilibrium implements an approximate sequential equilibrium which is always close to a Magill and Quinzii equilibrium without short sales for arbitrarily small errors. This implies that the competitive equilibrium can be implemented by using forecast statistics with minimal state space provided that agents will reduce errors in their estimates in the long run. We have also developed an alternative algorithm to compute the approximate recursive equilibrium with incomplete markets and heterogeneous agents through a procedure of iterating functional equations and without using the rst order conditions of optimality.