Forecasting Brazilian inflation by its aggregate and disaggregated data: a test of predictive power by forecast horizon

This work aims to compare the forecast efficiency of different types of methodologies applied to Brazilian Consumer inflation (IPCA). We will compare forecasting models using disaggregated and aggregated data over twelve months ahead. The disaggregated models were estimated by SARIMA and will have different levels of disaggregation. Aggregated models will be estimated by time series techniques such as SARIMA, state-space structural models and Markov-switching. The forecasting accuracy comparison will be made by the selection model procedure known as Model Confidence Set and by Diebold-Mariano procedure. We were able to find evidence of forecast accuracy gains in models using more disaggregated data

The consequences of the culture aspect and the power distance in the execution of global strategies in multinational companies in Brazil

One of the challenges presented by the current conjecture in Global Companies is to recognize and understand that the culture and levels in structure of the Power Distance in Organizations in different countries contribute, significantly, toward the failure or success of their strategies. The alignment between the implementation and execution of new strategies for projects intended for the success of the Organization as a whole, rather than as an individual part thereof, is an important step towards reducing the impacts of Power Distance (PDI) on the success of business strategies. A position at odds with this understanding by Companies creates boundaries that increase organizational chasms, also taking into consideration relevant aspects such as, FSAs (Firm-Specific Advantages) and CSAs (Country-Specific Advantages). It is also important that the Organizations based in countries or regions of low Power Distance (PDI) between its individuals be more flexible and prepared to ask and to hear the suggestions from Regional and Local Offices. Thus, the purpose of this study is to highlight the elements of effective strategy implementation considering the relevant aspects at all levels of global corporate culture that justify the influences of power distance when implementing new strategies and also to minimize the impacts of this internal business relationship. This study also recognizes that other corporate and cultural aspects are relevant for the success of business strategies so consider, for instance, the lack of alignment between global and regional/local organizations, the need for competent leadership resources, as well as the challenges that indicate the distance between the hierarchical levels ─ Headquarters and Regional Office ─ as some of the various causes that prevent the successful execution of global strategies. Finally, we show that the execution of the strategy cannot be treated as a construction solely created by the Headquarters or by only one Board and that it needs to be understood as a system aimed at interacting with the surroundings.

A family of autoregressive conditional duration models

This paper develops a family of autoregressive conditional duration (ACD) models that encompasses most specifications in the literature. The nesting relies on a Box-Cox transformation with shape parameter λ to the conditional duration process and a possibly asymmetric shocks impact curve. We establish conditions for the existence of higher-order moments, strict stationarity, geometric ergodicity and β-mixing property with exponential decay. We next derive moment recursion relations and the autocovariance function of the power λ of the duration process. Finally, we assess the practical usefulness of our family of ACD models using NYSE transactions data, with special attention to IBM price durations. The results warrant the extra flexibility provided either by the Box-Cox transformation or by the asymmetric response to shocks.

A family of autoregressive conditional duration models

This paper develops a family of autoregressive conditional duration (ACD) models that encompasses most specifications in the literature. The nesting relies on a Box-Cox transformation with shape parameter λ to the conditional duration process and a possibly asymmetric shocks impact curve. We establish conditions for the existence of higher-order moments, strict stationarity, geometric ergodicity and β-mixing property with exponential decay. We next derive moment recursion relations and the autocovariance function of the power λ of the duration process. Finally, we assess the practical usefulness of our family of ACD models using NYSE price duration data on the IBM stock. The results warrant the extra flexibility provided either by the Box-Cox transformation or by the asymmetric response to shocks.

Monopoly power, trade protection and growth: cross industry evidence

This paper investigates the impact of monopoly power on trade policy. Annual panel-databases of Brazilian industries for the years 1988 through 1994 were used. The regressions reported here are robust to openness indicator, concentration index, control variables and sample size, and suggest that industries with higher monopoly power are more protected than competitive sectors. In the period of study the country experienced a major trade liberalization, but the results in the paper show that the reduction in protection was smaller in sectors with higher monopoly power. We thus have evidence favoring recent growth literature which stresses that interest groups with control over creasing productivity. The results here confirm the first part of this argument and show that organized groups in fact are able to obtain policy advantages that reduce competition.

The BoP approach and its links to main related research fields: sense-making of the current discussion

A Base-da-Pirâmide (Base ofthePyramid- BoP) é referida na literatura como sendo o segmento sócio-econômico mais baixo em termos de paridade do poder de compra. Esse segmento encontrase geralmente excluído do sistema capitalista global. Esta tese analisa o tema BoP e discute dentro de um contexto sócio-econômico, como essa abordagem se relaciona com outras áreas de pesquisa, assim como a teoria do desenvolvimento internacional e a teoria de negócios internacionais. Estas duas teorias são identificadas como tendo uma relação mais forte com BoP. No que se segue, a abordagem BoP é incorporada nessas duas teorias com o objetivo de tornar este conceito mais claro e abrangente. Seguindo este raciocínio a abordagem BoP vem identificar contribuições no tocante a cada uma dessas abordagens teóricas. O argumento principal da tese é que a abordagem BoP é capaz de ligar essas duas teorias (teoria do desenvolvimento internacional e a teoria de negócios internacionais) em um só modelo teórico, mostrando assim que essas duas abordagens teóricas distintas podem na realidade serem complementares.

Important, unimportant a critical anticipation of the assumptions of legal positivism in Alice in Wonderland

Almost a full century separates Lewis’ Alice in Wonderland (1865) and the second, lengthier and more elaborate edition of Hans Kelsen’s Pure Theory of Law (1960; first edition published in 1934). And yet, it is possible to argue that the former anticipates and critically addresses many of the philosophical assumptions that underlie and are elemental to the argument of the latter. Both texts, with the illuminating differences that arise from their disparate genre, have as one of their key themes norms and their functioning. Wonderland, as Alice soon finds out, is a world beset by rules of all kinds: from the etiquette rituals of the mad tea-party to the changing setting for the cricket game to the procedural insanity of the trial with which the novel ends. Pure Theory of Law, as Kelsen emphatically stresses, has the grundnorm as the cornerstone upon which the whole theoretical edifice rests2. This paper discusses some of the assumptions underlying Kelsen’s argument as an instance of the modern worldview which Lewis satirically scrutinizes. The first section (Sleepy and stupid) discusses Lewis critique of the idea that, to correctly apprehend an object (in the case of Kelsen’s study, law), one has to free it from its alien elements. The second section (Do bats eat cats?) discusses the notion of systemic coherence and its impact on modern ways of thinking about truth, law and society. The third section (Off with their heads!) explores the connections between readings of systems as neutral entities and the perpetuation of political power. The fourth and final section (Important, Unimportant) explains the sense in which a “critical anticipation” is both possible and useful to discuss the philosophical assumptions structuring some positivist arguments. It also discusses the reasons for choosing to focus on Kelsen’s work, rather than on that of Lewis’ contemporary, John Austin, whose The Province of Jurisprudence Determined (published in 1832) remains influential in legal debates today.

Inferring conduct under the threat of entry : the case of Brazilian cement industry

This paper demonstrates that when an industry faces potential entry and this threat of entry constrains pre-entry prices, cost and conduct are not identified from the comparative statics of equilibrium. In such a setting, the identifying assumption behind the well-established technique of relying on exogenous demand perturbations to empirically distinguish between alternative hypotheses of conduct is shown to fail. The Brazilian cement industry, where the threat of imports restrains market outcomes, provides an empirical illustration. In particular, pricecost margins estimated using this established technique are considerably biased downward, underestimating the degree of market power. A test of conduct is proposed, adapted to this constrained setting, which suggests that outcomes in the industry are collusive and characterised by market division.

Agenda power in Brazil's Câmara dos Deputados , 1989 to 1999

This paper examines the structure of agenda power in the Brazilian Câmara dos Deputados (Chamber of Deputies). Our main question concerns when consistent agenda control by a single majority coalition, as opposed to agenda control by shifting majorities, has emerged in the post-1988 Câmara. Consistent agenda control emerges routinely in parliamentary regimes: the government commands a majority in the assembly; the legislative agenda is negotiated among the governing parties, typically with each able to “veto” the placement of bills on the agenda. However, the Câmara faces an external executive, the president, with substantial formal powers to set its agenda. Consistent agenda control thus can emerge only if the president chooses to ally with a majority coalition in the assembly. If the president always chose to form such an alliance—a presidentially-led agenda cartel—then one would expect some consistently parliamentary patterns in Brazil: the appointment of legislative party leaders to the cabinet; the use of statutes rather than decrees to achieve policy goals; the avoidance of bills that would pass and split the governing coalition. We find that only the Cardoso presidency displays consistent evidence of such a presidentiallyled agenda cartel. In this sense, our argument differs from that of Figueiredo and Limongi (1999; 2000), who argue that presidents have consistently pursued a parliamentary mode of governance in Brazil. Yet it also differs from those who argue that presidents have consistently pursued a shifting-coalitions strategy. Our results suggest that presidents make a strategic choice, with much hinging on that choice.

Rent dissipation, political viability and the strategic adoption of free trade agreements

This paper studies the political viability of free trade agreements (FTAs). The key element of the analysis is the “rent dissipation” that these arrangements induce: by eliminating intra-bloc trade barriers, an FTA reduces the incentives of the local firms to lobby for higher external tariffs, thereby causing a reduction of the rents created in the lobbying process. The prospect of rent dissipation moderates the governments’ willingness to participate in FTAs; they will support only arrangements that are “substantially” welfare improving, and no FTA that reduces welfare. Rent dissipation also implies that the prospects of political turnover may create strategic reasons for the formation of FTAs. Specifically, a government facing a high enough probability of losing power may want to form a trade bloc simply to “tie the hands” of its successor. An FTA can affect the likelihood of political turnover as well. If the incumbent party has a known bias toward special interests, it may want to commit to less distortionary policies in order to reduce its electoral disadvantage; the rent dissipation effect ensures that an FTA can serve as the vehicle for such a commitment. In nascent/unstable democracies, the incumbent government can use a free trade agreement also to reduce the likelihood of a dictatorial takeover and to “consolidate” democracy – a finding that is consistent with the timing of numerous accessions to and formations of preferential arrangements.

On the efficiency of the Argentinean electricity wholesale market

This paper discusses two key aspects regarding the efficiency of the Argentinean Electricity Market. Using hourly data on prices, marginal costs, and operational status of generators, it will be argued that, unlike the former British and Californian electricity spot markets, this market is not subject to the conventional forms of exercise of market power by generators. We then use Chao's (1983) model of optimal configuation of electricity supply to evaluate the social desirability of the change in the supply pattern of the Argentinean electricity industry, which took place throughout the last ten years.

Differences in the perception of interest representation: a comparision of Brasília and Brussels lobbying activity

The research topic of this paper is focused on the analysis of how trade associations perceive lobbying in Brussels and in Brasília. The analysis will be centered on business associations located in Brasília and Brussels as the two core centers of decision-making and as an attraction for the lobbying practice. The underlying principles behind the comparison between Brussels and Brasilia are two. Firstof all because the European Union and Brazil have maintained diplomatic relations since 1960. Through these relations they have built up close historical, cultural, economic and political ties. Their bilateral political relations culminated in 2007 with the establishment of a Strategic Partnership (EEAS website,n.d.). Over the years, Brazil has become a key interlocutor for the EU and it is the most important market for the EU in Latin America (European Commission, 2007). Taking into account the relations between EU and Brazil, this research could contribute to the reciprocal knowledge about the perception of lobby in the respective systems and the importance of the non-market strategy when conducting business. Second both EU and Brazilian systems have a multi-level governance structure: 28 Member States in the EU and 26 Member States in Brazil; in both systems there are three main institutions targeted by lobbying practice. The objective is to compare how differences in the institutional environments affect the perception and practice of lobbying, where institutions are defined as ‘‘regulative, normative, and cognitive structures and activities that provide stability and meaning to social behavior’’ (Peng et al., 2009). Brussels, the self-proclaimed "Capital of Europe”, is the headquarters of the European Union and has one of the highest concentrations of political power in the world. Four of the seven Institutions of the European Union are based in Brussels: the European Parliament, the European Council, the Council and the European Commission (EU website, n.d.). As the power of the EU institutions has grown, Brussels has become a magnet for lobbyists, with the latest estimates ranging from between 15,000 and 30,000 professionals representing companies, industry sectors, farmers, civil society groups, unions etc. (Burson Marsteller, 2013). Brasília is the capital of Brazil and the seat of government of the Federal District and the three branches of the federal government of Brazilian legislative, executive and judiciary. The 4 city also hosts 124 foreign embassies. The presence of the formal representations of companies and trade associations in Brasília is very limited, but the governmental interests remain there and the professionals dealing with government affairs commute there. In the European Union, Brussels has established a Transparency Register that allows the interactions between the European institutions and citizen’s associations, NGOs, businesses, trade and professional organizations, trade unions and think tanks. The register provides citizens with a direct and single access to information about who is engaged in This process is important for the quality of democracy, and for its capacity to deliver adequate policies, matching activities aimed at influencing the EU decision-making process, which interests are being pursued and what level of resources are invested in these activities (Celgene, n.d). It offers a single code of conduct, binding all organizations and self-employed individuals who accept to “play by the rules” in full respect of ethical principles (EC website, n.d). A complaints and sanctions mechanism ensures the enforcement of the rules and addresses suspected breaches of the code. In Brazil, there is no specific legislation regulating lobbying. The National Congress is currently discussing dozens of bills that address regulation of lobbying and the action of interest groups (De Aragão, 2012), but none of them has been enacted for the moment. This work will focus on class lobbying (Oliveira, 2004), which refers to the performance of the federation of national labour or industrial unions, like CNI (National Industry Confederation) in Brazil and the European Banking Federation (EBF) in Brussels. Their performance aims to influence the Executive and Legislative branches in order to defend the interests of their affiliates. When representing unions and federations, class entities cover a wide range of different and, more often than not, conflicting interests. That is why they are limited to defending the consensual and majority interest of their affiliates (Oliveira, 2004). The basic assumption of this work is that institutions matter (Peng et al, 2009) and that the trade associations and their affiliates, when doing business, have to take into account the institutional and regulatory framework where they do business.

Strategic options development and analysis: the case of the brazilian railways

Judging by their success in Europe, Asia and North America, passenger and cargo railways are appreciated as the key to infrastructural development in Brazil. The issues are complex and steeped in uncertainty, as well as political and economic agendas, and a wide array of intersecting issues such as business and unionized interests, agricultural and industrial geographical spreads, as well as the emergence of alternative power sources. Not only are the issues systemic, but railway development itself always comes as a physical network structure. The situation under consideration, in other words, is systemic from both the soft and hard systems point of view, thus promising a rich context for systems studies. As an initial attempt in understanding the situation at hand, the research reported here applied the problem structuring approach known as Strategic Options Development and Analysis (SODA) in order to map and analyze issues facing the Brazilian railways. Strategic options for the future development of the railways were identified and analyzed, and ways forward for future research are proposed. In addition, the report serves as an initial knowledge base that can guide future systemic planning studies in the industry.

A model of the rule of law

Economic development requires some limits on what those in power can do | the rule of law | but how can restraints be imposed on the powerful when there is no-one above them? This paper studies equilibrium rules allocating power and resources established by selfinterested incumbents under the threat of rebellions from inside and outside the group in power. Commitment to uphold individuals' rights can only be achieved if power is not as concentrated as incumbents would like it to be, ex post. Power sharing endogenously enables incumbents to commit to otherwise time-inconsistent laws by ensuring more people receive rents under the status quo, and thus want to defend it.