The international impact of productivity shocks

Even though many studies have confirmed the Feldstein-Horioka (1980) finding that savings and investment rates are highly correlated, there is no consensus on the major reason for this correlation. The purpose of this dissertation is to develop theoretical models and calibrate and simulate these to compare their implications to explain the observed time-series comovement between savings and investment in an attempt to show that this high correlation may stem from technological shocks.^ The dissertation is comprised of three studies. The first two studies construct overlapping-generations, two-economy models of saving and investment under conditions of perfect international capital mobility. The second study differs from the first by endogenizing the labor supply. Employing simulations, the models are used to generate time-series for savings and investment. These are then compared with the actual data for specific economies. The models show that productivity shocks produce a high correlation between savings and investment. Further, while the model with exogenous labor supply displays monotonic adjustment, the economy with endogenous labor supply adjusts cyclically.^ The third model, on the other hand, constructs a general equilibrium model for a small open economy. The study is based on two important elements: adjustment costs in investment and endogenous, recursive time preferences. Again, the simulation results show that the model generates, at least in a significant part of the adjustment path, a positive correlation between domestic savings and investment in response to a supply shock. ^

Ex Ante Cost Benefit Analyses of Community-Based DRR Interventions in the Caribbean

This report presents a study on the cost benefit analyses (CBA) and cost effectiveness analysis (CEA) of community-based disaster risk reduction (DRR) interventions in the Caribbean. The DRR interventions, implemented by the International Federation of Red Cross (IFRC), Port of Spain, in three Caribbean countries, Jamaica, Antigua & Barbuda, and Suriname, comprised the pilot phase of the Red Cross (RC) Project, Improving Climate Change Resilience of Caribbean Communities. This study is part of the endeavor by the DRR Program of Florida International University (FIU) and the United States Agency for International Development’s Office of the U.S. Foreign Disaster Assistance (USAID/OFDA) to develop and foster DRR measures in the Latin American and Caribbean region since 2008.