New models of old(?) payment questions

Is private money feasible and desirable? In its absence, is there a central bank policy that partially or fully substitutes for private money? In this paper, some recent modeling ideas about how to address these questioned are reviewed and applied. The main ideas are that people cannot commit to future actions and that their histories are to some extent unknown - are not common knowledge. Under the additional assumption that the private monies issued by diferent people are distinct, a strong recognizability assumption, it is shown that there is a role for private money.

Comparing value-at-risk methodologies

In this paper, we compare four different Value-at-Risk (V aR) methodologies through Monte Carlo experiments. Our results indicate that the method based on quantile regression with ARCH effect dominates other methods that require distributional assumption. In particular, we show that the non-robust methodologies have higher probability to predict V aRs with too many violations. We illustrate our findings with an empirical exercise in which we estimate V aR for returns of S˜ao Paulo stock exchange index, IBOVESPA, during periods of market turmoil. Our results indicate that the robust method based on quantile regression presents the least number of violations.

Land taxes in a Latin American context

Since Henry George (1839-1897) economists have been arguing that a tax on unimproved land is an ideal tax on efficiency grounds. Output taxes, on the other hand, have distortionary effects on the economy. This paper shows that under asymmetric information output taxes might be used along with land tax in order to implement an optimal taxation scheme in a Latin American context, i.e., where land rental markets are relatively thin, land property provides non-agricultural payoffs and there is nonrevenue objectives of land taxation. Also, the model has two implications that can be tested empirically: (i) there is evasion when schemes based only on land taxes are implemented; (ii) this evasion is more severe for large landholders.

The EU-Mercosul free trade agreement: Quantifying mutual gains

We identify trade in goods opportunities in a EU-Mercosul free trade area. Gains for Mercosul are rather concentrated, being mostly associated to a few agricultural commodities nowadays facing high protection barriers. EU gains are evenly spread, comprising a variety of market penetration possibilities. Trade deviation by the EU products is never higher than trade creation, confirming their international competitiveness and signalling that a great distortion of Mercosul’s imports won’t take place. Balanced gains exist for both sides; for Mercosul, the agreement can act as a first serious trial for future liberalisations with other developed partners, and as a warning on needed competitiveness improvements.

É possível reduzir as mortes no trânsito? O efeito do novo Código Brasileiro de Trânsito

Segurança no trânsito é uma preocupação constante de todos os governos. Se por um lado evita a perda de capital humano através da redução do número de mortos e feridos em acidentes de trânsito, por outro, diminuí os custos hospitalares. Através de dados em painel para estados brasileiros, este trabalho apresenta evidências de que o Código Brasileiro de Trânsito, em vigor a partir de 1998, reduziu as mortes de trânsito no Brasil em pelo menos 5% através de punições mais severas. Isso representa mais de 14 mil vidas salvas entre 1998 e 2004. As mulheres demonstram uma maior sensibilidade a leis de trânsito mais rígidas em relação aos homens. Além disso, existe uma diferença das mortes de trânsito entre sexos que é explicada pela concentração de rapazes na população. As estimativas apontam que a proporção de homens entre 15 e 29 anos é responsável por um aumento em torno de 0,30 das mortes de trânsito por 100 mil habitantes.

The political economy of exchange rate in Brazil

This paper reviews part of the political economy literature on exchange rate policy relevant to understanding the political motivations behind the Brazilian exchange rate policy. We shall first examine the distributive role of the exchange rate, and the way it unfolds in terms of the desired political goals. We will follow by analyzing exchange policy as indicative of government effciency prior to elections. Finally, we discuss fiscal policy from the point of view of political economy, in which the exchange rate results from the macroeconomic equilibrium. Over this review, the Brazilian exchange rate policy is discussed in light of the theories presented.