The economics of wage-led recovery: analysis and policy recommendations

The financial crisis and Great Recession have been followed by a jobs shortage crisis that most forecasts predict will persist for years given current policies. This paper argues for a wage-led recovery and growth program which is the only way to remedy the deep causes of the crisis and escape the jobs crisis. Such a program is the polar opposite of the current policy orthodoxy, showing how much is at stake. Winning the argument for wage-led recovery will require winning the war of ideas about economics that has its roots going back to Keynes’ challenge of classical macroeconomics in the 1920s and 1930s. That will involve showing how the financial crisis and Great Recession were the ultimate result of three decades of neoliberal policy, which produced wage stagnation by severing the wage productivity growth link and made asset price inflation and debt the engine of demand growth in place of wages; showing how wage-led policy resolves the current problem of global demand shortage without pricing out labor; and developing a detailed set of policy proposals that flow from these understandings. The essence of a wage-led policy approach is to rebuild the link between wages and productivity growth, combined with expansionary macroeconomic policy that fills the current demand shortfall so as to push the economy on to a recovery path. Both sets of measures are necessary. Expansionary macro policy (i.e. fiscal stimulus and easy monetary policy) without rebuilding the wage mechanism will not produce sustainable recovery and may end in fiscal crisis. Rebuilding the wage mechanism without expansionary macro policy is likely to leave the economy stuck in the orbit of stagnation.

Flexible information acquisition and optimal Tobin tax in tractable dynamic global games

My dissertation focuses on dynamic aspects of coordination processes such as reversibility of early actions, option to delay decisions, and learning of the environment from the observation of other people’s actions. This study proposes the use of tractable dynamic global games where players privately and passively learn about their actions’ true payoffs and are able to adjust early investment decisions to the arrival of new information to investigate the consequences of the presence of liquidity shocks to the performance of a Tobin tax as a policy intended to foster coordination success (chapter 1), and the adequacy of the use of a Tobin tax in order to reduce an economy’s vulnerability to sudden stops (chapter 2). Then, it analyzes players’ incentive to acquire costly information in a sequential decision setting (chapter 3). In chapter 1, a continuum of foreign agents decide whether to enter or not in an investment project. A fraction λ of them are hit by liquidity restrictions in a second period and are forced to withdraw early investment or precluded from investing in the interim period, depending on the actions they chose in the first period. Players not affected by the liquidity shock are able to revise early decisions. Coordination success is increasing in the aggregate investment and decreasing in the aggregate volume of capital exit. Without liquidity shocks, aggregate investment is (in a pivotal contingency) invariant to frictions like a tax on short term capitals. In this case, a Tobin tax always increases success incidence. In the presence of liquidity shocks, this invariance result no longer holds in equilibrium. A Tobin tax becomes harmful to aggregate investment, which may reduces success incidence if the economy does not benefit enough from avoiding capital reversals. It is shown that the Tobin tax that maximizes the ex-ante probability of successfully coordinated investment is decreasing in the liquidity shock. Chapter 2 studies the effects of a Tobin tax in the same setting of the global game model proposed in chapter 1, with the exception that the liquidity shock is considered stochastic, i.e, there is also aggregate uncertainty about the extension of the liquidity restrictions. It identifies conditions under which, in the unique equilibrium of the model with low probability of liquidity shocks but large dry-ups, a Tobin tax is welfare improving, helping agents to coordinate on the good outcome. The model provides a rationale for a Tobin tax on economies that are prone to sudden stops. The optimal Tobin tax tends to be larger when capital reversals are more harmful and when the fraction of agents hit by liquidity shocks is smaller. Chapter 3 focuses on information acquisition in a sequential decision game with payoff complementar- ity and information externality. When information is cheap relatively to players’ incentive to coordinate actions, only the first player chooses to process information; the second player learns about the true payoff distribution from the observation of the first player’s decision and follows her action. Miscoordination requires that both players privately precess information, which tends to happen when it is expensive and the prior knowledge about the distribution of the payoffs has a large variance.

The effect of the ocean water immersion and UV ageing on the dynamic mechanical properties of the PPS/glass fiber composites

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Towards a theory of the small firm: theoretical aspects and some policy implications

Includes bibliography

Innovation and technology policy (ITP) for catching up: a three phase life cycle framework for industrializing economies

Includes bibliography

Regional integration in Latin America and dynamic gains from macroeconomic cooperation

Includes bibliography

Foundations of macroeconomic policy coordination: fostering dialogue as a policy tool in Latin America

Includes bibliography

Coordination of public expenditure in transport infrastructure: analysis and policy perspectives for Latin America

Includes bibliography

Chile and its "lateral" trade policy

Includes bibliography

The industrial policy debate

Includes bibliography

How domestic violence came to be viewed as a public issue and policy object

Includes bibliography

Industrial policy, comparative advantages and growth

Includes bibliography

Transaction scheduling using dynamic conflict avoidance

Software transaction memory (STM) systems have been used as an approach to improve performance, by allowing the concurrent execution of atomic blocks. However, under high-contention workloads, STM-based systems can considerably degrade performance, as transaction conflict rate increases. Contention management policies have been used as a way to select which transaction to abort when a conflict occurs. In general, contention managers are not capable of avoiding conflicts, as they can only select which transaction to abort and the moment it should restart. Since contention managers act only after a conflict is detected, it becomes harder to effectively increase transaction throughput. More proactive approaches have emerged, aiming at predicting when a transaction is likely to abort, postponing its execution. Nevertheless, most of the proposed proactive techniques are limited, as they do not replace the doomed transaction by another or, when they do, they rely on the operating system for that, having little or no control on which transaction to run. This article proposes LUTS, a lightweight user-level transaction scheduler. Unlike other techniques, LUTS provides the means for selecting another transaction to run in parallel, thus improving system throughput. We discuss LUTS design and propose a dynamic conflict-avoidance heuristic built around its scheduling capabilities. Experimental results, conducted with the STAMP and STMBench7 benchmark suites, running on TinySTM and SwissTM, show how our conflict-avoidance heuristic can effectively improve STM performance on high contention applications. © 2012 Springer Science+Business Media, LLC.

Renewable energy sources in Latin America and the Caribbean: situation and policy proposals

Includes bibliography

Pricing and spread components at the Lima Stock Exchange

This paper analyses three aspects of the share market operated by the Lima Stock Exchange: (i) the short-term relationship between the pricing, direction and volume of order flows; (ii) the components of the spread and the equilibrium point of the limit order book per share, and (iii) the pricing, order direction and trading volume dynamic resulting from shocks in the same variables when lagged. The econometric results for intraday data from 2012 show that the short-run dynamic of the most and least liquid shares in the General Index of the Lima Stock Exchange is explained by the direction of order flow, whose price impact is temporary in both cases.