An evaluation of exchange rate policy and economic adjustment in Nicaragua, 1993--1995

Since the late 1970's, but particularly since the mid-1980s, the economy of Nicaragua has had persistent and large macroeconomic imbalances, while GDP per-capita has declined to 1950s' levels. By the second half of the 1990s, huge fiscal deficits and a reduction of foreign financing resulted in record hyperinflation. The Sandinista government's (1979–1990) harsh stabilization program in 1988–89 had only modest and short-lived success. It was doomed by their inability to lower the public sector deficit due to the war, plus diminishing financial support from abroad. Hyperinflation stopped only after their 1990 electoral defeat ended the war and massive aid began to flow in. Five years later, macroeconomic stability is still very fragile. A sluggish recovery of export agriculture plus import liberalization, have impeded a reduction of huge trade and current account deficits. Facing the prospects of diminished aid flows, the government's strategy has hinged on the achievement of a real devaluation through a crawling-peg adjustment of the nominal rate. However, at the end of 1995 the situation of the external accounts was still critical, and the modest progress achieved was attributable to cyclical terms-of-trade improvement and changes in the political outlook of agricultural producers. Using a Computable General Equilibrium Model and a Social Accounting Matrix constructed for this dissertation, the importance of structural rigidities in production and demand in explaining such outcome is shown. It is shown that under the plausible structural assumptions incorporated in the model, the role of devaluation in the adjustment process is restricted by structural rigidities. Moreover, contrary to the premise of the orthodox economic thinking behind the economic program, it is the contractionary effect of devaluation more than its expenditure-switching effects that provide the basis for is use in solving the external sector's problems. A fixed nominal exchange rate is found to lead to adverse results. The broader conclusion that emerges from the study is that a new social compact and a rapid increase in infrastructure spending plus fiscal support for the traditional agro-export activities is at the center of a successful adjustment towards external viability in Nicaragua. ^

Essays in open economy macroeconomics

Research macroeconomists have witnessed remarkable methodological developments in mathematical, statistical, and computational tools during the last two decades. The three essays in this dissertation took advantage of these advances to analyze important macroeconomic issues. ^ The first essay, “ Habit Formation, Adjustments Costs, and International Business Cycle Puzzles” analyzes the extent to which incorporating habit formation and adjustment costs in investment in a one-good two-country general equilibrium model would help overcome some of the international business cycle puzzles. Unlike standard results in the literature, the model generates persistent, cyclical adjustment paths in response to shocks. It also yields positive cross-country correlations in consumption, employment, investment, and output. Cross-country correlations in output are higher than the ones in consumption. This is qualitatively consistent with the stylized facts. These results are particularly striking given the predicted negative correlations in investment, employment, and output that are typically found in the literature. ^ The second essay, “Comparison Utility, Endogenous Time Preference, and Economic Growth,” uses World War II as a natural experiment to analyze the degree to which a model where consumers' preferences exhibit comparison-based utility and endogenous discounting is able to improve upon existing models in mimicking the transitional dynamics of an economy after a shock that destroys part of its capital stock. The model outperforms existing ones in replicating the behavior of the saving rate (both on impact and along the transient paths) after this historical event. This result brings additional support to the endogenous rate of time preference being a crucial element in growth models. ^ The last essay, “Monetary Policy under Fear of Floating: Modeling the Dominican Economy,” presents a small scale macroeconomic model for a country (Dominican Republic) characterized by a strong presence of fear of floating (reluctance to have a flexible exchange rate regime) in the conduct of monetary policy. The dynamic responses of this economy to external shocks that are of interest for monetary policy purposes are analyzed under two alternative interest rate policy rules: One being the standard Taylor rule and another that responds explicitly to deviations of the exchange rate with respect to its long-term trend. ^

Challenges in using siliceous subfossils as a tool for inferring past water level and hydroperiod in Everglades marshes

Successfully rehabilitating drained wetlands through hydrologic restoration is dependent on defining restoration targets, a process that is informed by pre-drainage conditions, as well as understanding linkages between hydrology and ecosystem structure. Paleoecological records can inform restoration goals by revealing long-term patterns of change, but are dependent on preservation of biomarkers that provide meaningful interpretations of environmental change. In the Florida Everglades, paleohydrological hind-casting could improve restoration forecasting, but frequent drying of marsh soils leads to poor preservation of many biomarkers. To determine the effectiveness of employing siliceous subfossils in paleohydrological reconstructions, we examined diatoms, plant and sponge silico-sclerids from three soil cores in the central Everglades marshes. Subfossil quality varied among cores, but the abundance of recognizable specimens was sufficient to infer 1,000–3,000 years of hydrologic change at decadal to centennial resolution. Phytolith morphotypes were linked to key marsh plant species to indirectly measure fluctuations in water depth. A modern dataset was used to derive diatom-based inferences of water depth and hydroperiod (R2 = 0.63, 0.47; RMSE = 14 cm, 120 days, respectively). Changes in subfossil quality and abundances at centennial time-scales were associated with mid-Holocene climate events including the Little Ice Age and Medieval Warm Period, while decadal-scale fluctuations in assemblage structure during the twentieth century suggested co-regulation of hydrology by cyclical climate drivers (particularly the Atlantic Multidecadal Oscillation) and water management changes. The successful reconstructions based on siliceous subfossils shown here at a coarse temporal scale (i.e., decadal to centennial) advocate for their application in more highly resolved (i.e., subdecadal) records, which should improve the ability of water managers to target the quantity and variability of water flows appropriate for hydrologic restoration.

Economic Growth and Recession Time Periods: Their Effect Upon Pleasure Travelers Visiting Florida Theme Parks

Two tourism-oriented travel samples were drawn from recent time periods that represented economic growth (expansion) and recession cycles in the O: S. economy. Analysis suggests that during the recession period, a greater percentage of theme park visitors chose to travel by air. Second, theme park travelers were more likely to visit friends or fami4 during the recession period. Third, recession theme park travelers were 10 years older, on the average, than their rapid growth counterparts. The average age difference of theme park visitors was found to be significantly different during cyclical economic periods. Research findings support the need for additional studies that segment using generational markets

A visual critical ethnography of youth develoment in a Rio de Janeiro favela

Favelas are Brazilian informal housing settlements that are areas of concentrated poverty. In Rio de Janeiro, favelas are perceived as areas of heightened criminal activity and violence, and residents experience discrimination, and little access to quality education and employment opportunities. In this context, hundreds of non-formal educational arts and leisure programs work to build the self-esteem and identity of youth in Rio's favelas as a way of preventing the youth from negative local influences. The Morrinho organization, located in the Pereira da Silva favela in Rio, uses art as a way for the local male youth to communicate their lived reality. This study used a visual critical ethnographic methodology to describe the way in which the Morrinho participants interpret living in a favela. Seventeen semi-structured interviews with young men aged 15 to 29, the feature-length documentary film on the organization, 206 researcher produced documentary style photographs of the Morrinho artwork, and the researcher's field notes were analyzed. Truth claims, ways of seeing as communicated through words and actions, were induced through a cyclical process of reconstructive horizon analysis that incorporated the societal context and critical theory. The participants communicated their concerns about life in a favela; however, they did not describe their societal positions in terms of complete marginalization. They named multiple benefits of living in Pereira da Silva, discussed positive and negative experiences in school, and described ways they circumvented discrimination. Morrinho as an organization was described as an enthralling game and a social project that benefited dozens of local youth. Character development was a valuable result of participation at Morrinho. The Morrinho artwork communicates a nuanced vision of both benevolent and violent social actors, and counters the overwhelmingly negative dominant characterization of Rio de Janeiro's favelas. This study has implications for an inclusive critical pedagogy and the use of art as a means to facilitate a transformative education. Further research is recommended to explore terminology used to refer to favelas, and perceptions that favela residents have of their experiences in public education.

Essays in Open Economy Macroeconomics

Research macroeconomists have witnessed remarkable methodological developments in mathematical, statistical, and computational tools during the last two decades. The three essays in this dissertation took advantage of these advances to analyze important macroeconomic issues. The first essay, “ Habit Formation, Adjustments Costs, and International Business Cycle Puzzles” analyzes the extent to which incorporating habit formation and adjustment costs in investment in a one-good two-country general equilibrium model would help overcome some of the international business cycle puzzles. Unlike standard results in the literature, the model generates persistent, cyclical adjustment paths in response to shocks. It also yields positive cross-country correlations in consumption, employment, investment, and output. Cross-country correlations in output are higher than the ones in consumption. This is qualitatively consistent with the stylized facts. These results are particularly striking given the predicted negative correlations in investment, employment, and output that are typically found in the literature. The second essay, “Comparison Utility, Endogenous Time Preference, and Economic Growth,” uses World War II as a natural experiment to analyze the degree to which a model where consumers' preferences exhibit comparison-based utility and endogenous discounting is able to improve upon existing models in mimicking the transitional dynamics of an economy after a shock that destroys part of its capital stock. The model outperforms existing ones in replicating the behavior of the saving rate (both on impact and along the transient paths) after this historical event. This result brings additional support to the endogenous rate of time preference being a crucial element in growth models. The last essay, “Monetary Policy under Fear of Floating: Modeling the Dominican Economy,” presents a small scale macroeconomic model for a country (Dominican Republic) characterized by a strong presence of fear of floating (reluctance to have a flexible exchange rate regime) in the conduct of monetary policy. The dynamic responses of this economy to external shocks that are of interest for monetary policy purposes are analyzed under two alternative interest rate policy rules: One being the standard Taylor rule and another that responds explicitly to deviations of the exchange rate with respect to its long-term trend.

Evidence of climate variability and tropical cyclone activity from diatom assemblage dynamics in coastal southwest Florida

Estuaries are dynamic on many spatial and temporal scales. Distinguishing effects of unpredictable events from cyclical patterns can be challenging but important to predict the influence of press and pulse drivers in the face of climate change. Diatom assemblages respond rapidly to changing environmental conditions and characterize change on multiple time scales. The goals of this research were to 1) characterize diatom assemblages in the Charlotte Harbor watershed, their relationships with water quality parameters, and how they change in response to climate; and 2) use assemblages in sediment cores to interpret past climate changes and tropical cyclone activity. ^ Diatom assemblages had strong relationships with salinity and nutrient concentrations, and a quantitative tool was developed to reconstruct past values of these parameters. Assemblages were stable between the wet and dry seasons, and were more similar to each other than to assemblages found following a tropical cyclone. Diatom assemblages following the storm showed a decrease in dispersion among sites, a pattern that was consistent on different spatial scales but may depend on hydrological management regimes. ^ Analysis of sediment cores from two southwest Florida estuaries showed that locally-developed diatom inference models can be applied with caution on regional scales. Large-scale climate changes were suggested by environmental reconstructions in both estuaries, but with slightly different temporal pacing. Estimates of salinity and nutrient concentrations suggested that major hydrological patterns changed at approximately 5.5 and 3 kyrs BP. A highly temporally-resolved sediment core from Charlotte Harbor provided evidence for past changes that correspond with known climate records. Diatom assemblages had significant relationships with the three-year average index values of the Atlantic Multidecadal Oscillation and the El Niño Southern Oscillation. Assemblages that predicted low salinity and high total phosphorus also had the lowest dispersion and corresponded with some major storms in the known record, which together may provide a proxy for evidence of severe storms in the paleoecological record. ^

Calle Ocho revived : artists studios commemorate the role of Cuban exiles (1960-1973) in the development of Calle Ocho

The purpose of this study was to learn about the historical development of Eight Street in order to use this information in the revitalization of this area with the new migration of artists. This study demonstrated a cyclical pattern prompted by the economical success of the immigrant group. The 1960 Cuban migration brought an era of life to Eight Street. As the Cubans became successful they left the area causing a decline. Presently the area is witnessing a migration of artists that may bring it new life. The thesis retrofits buildings in this area to create a series of artist studios. These studios are designed using elements of 1960 Cuban urbanity, an era of robust urban life for this street.