Trade liberalization and the evolution of skill earnings differentials in Brazil

Rio de Janeiro

Purchasing power parity: the choice of price index

Looking closely at the PPP argument, it states that the currencies purchasing power should not change when comparing the same basket goods across countries, and these goods should all be tradable. Hence, if PPP is valid at all, it should be captured by the relative price indices that best Öts these two features. We ran a horse race among six di§erent price indices available from the IMF database to see which one would yield higher PPP evidence, and, therefore, better Öt the two features. We used RER proxies measured as the ratio of export unit values, wholesale prices, value added deáators, unit labor costs, normalized unit labor costs and consumer prices, for a sample of 16 industrial countries, with quarterly data from 1975 to 2002. PPP was tested using both the ADF and the DFGLS unit root test of the RER series. The RER measured as WPI ratios was the one for which PPP evidence was found for the larger number of countries: six out of sixteen when we use DF-GLS test with demeaned series. The worst measure of all was the RER based on the ratio of foreign CPIs and domestic WPI. No evidence of PPP at all was found for this measure.

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.

Trade liberalization and the evolution of skill earnings differentials in Brazil

Rio de Janeiro

The political economy of exchange rate policy in Brazil: 1964-1999

This paper was developed as part of a broader research program on the political economy of exchange rate policies in Latin America and the Caribbean. We are grateful for helpful comments and suggestions from Jeff Frieden, Ernesto Stein, Jorge Streb, Marcelo Neri and seminar participants at Getulio Vargas Foundation, PUC-Rio, IDB workshop on The Political Economy of Exchange Rate Policies in Latin America and the Caribbean, and LACEA meeting in Buenos Aires. We thank René Garcia for providing us with a Fortran program for estimating the Markov Switching Model, Ilan Goldfajn for sending us updated estimates of the real exchange rate series of Goldfajn and Valdés (1996), Altamir Lopes and Ricardo Markwald for kindly furnishing data on Brazilian external accounts, and Carla Bernardes, Gabriela Domingues, Juliana Pessoa de Araújo, and, specially, Marcelo Pinheiro for excellent research assistant. Both authors thank CNPq for a research fellowship.

Essays on the general equilibrium effects of barriers to trade on economic growth, foreign trade and the location of economic activity in Brazil

This work presents a fully operational interstate CGE model implemented for the Brazilian economy that tries to quantify both the role of barriers to trade on economic growth and foreign trade performance and how the distribution of the economic activity may change as the country opens up to foreign trade. Among the distinctive features embedded in the model, modeling of external scale economies, port efficiency and land-maritime transport costs provides an innovative way of dealing explicitly with theoretical issues related to integrated regional systems. In order to illustrate the role played by the quality of infrastructure and geography on the country‟s foreign and interregional trade performance, a set of simulations is presented where barriers to trade are significantly reduced. The relative importance of trade policy, port efficiency and land-maritime transport costs for the country trade relations and regional growth is then detailed and quantified, considering both short run as well as long run scenarios. A final set of simulations shed some light on the effects of liberal trade policies on regional inequality, where the manufacturing sector in the state of São Paulo, taken as the core of industrial activity in the country, is subjected to different levels of external economies of scale. Short-run core-periphery effects are then traced out suggesting the prevalence of agglomeration forces over diversion forces could rather exacerbate regional inequality as import barriers are removed up to a certain level. Further removals can reverse this balance in favor of diversion forces, implying de-concentration of economic activity. In the long run, factor mobility allows a better characterization of the balance between agglomeration and diversion forces among regions. Regional dispersion effects are then clearly traced-out, suggesting horizontal liberal trade policies to benefit both the poorest regions in the country as well as the state of São Paulo. This long run dispersion pattern, on one hand seems to unravel the fragility of simple theoretical results from recent New Economic Geography models, once they get confronted with more complex spatially heterogeneous (real) systems. On the other hand, it seems to capture the literature‟s main insight: the possible role of horizontal liberal trade policies as diversion forces leading to a more homogeneous pattern of interregional economic growth.

Trade liberalization and the evolution of skill earnings differentials in Brazil

From 1988 to 1995, when trade liberalization was implemented in Brazil, relative earnings of skilled workers decreased. In this paper, we investigate the role of trade liberalization in explaining these relative earnings movements, by checking all the steps predicted by the HeckscherOhlin- style trade transmission mechanism. We find that: i) employment shifted from skilled to unskilled intensive sectors, and each Sector increased its relative share of skilled labor; ii) relative prices fell in skill intensive sectors; iii) tariff changes across sectors were not related to skill intensities, but the pass-through from tariffs to prices was stronger in skill intensive sectors; iv) the decline in skilled eamings differentials mandated by the price variation predicted by trade is very elose to the observed one. The results are compatible with trade liberalization, accounting for the observed rei ative eamings changes in Brazil.

Egg capsules of the little skate, Psammobatis extenta (Garman, 1913) (Chondrichthyes, Rajidae)

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

Anaerobic biodigestion of pigs feces in the initial, growing and finishing stages fed with diets formulated with corn or sorghum

Objetivou-se avaliar a produção e a qualidade do biogás e do biofertilizante obtidos em biodigestores abastecidos com dejetos de suínos, nas fases inicial, crescimento e terminação, alimentados com dietas formuladas à base de milho ou sorgo. Foram utilizados 20 biodigestores de bancada, com tempo de retenção hidráulica de 30 dias, e cargas diárias que continham 4,0 a 6,0% de sólidos totais (ST) e 3,6 a 5,2% de sólidos voláteis (SV). Nos efluentes dos biodigestores, foram verificados teores médios de ST variando de 1,6 a 2,0% e de SV entre 1,2 e 1,6%. As reduções médias de ST foram de 57,7 a 64,7% e de SV de 61,7 a 69,0%, sendo que houve diferença somente na fase de terminação, na qual as maiores reduções médias foram para biodigestores abastecidos com dejetos de animais alimentados com dietas à base de milho. Nos biodigestores abastecidos com dejetos de animais em fase inicial e de crescimento, alimentados com dietas formuladas à base de milho, foram verificadas maiores produções médias de biogás e os maiores potenciais médios de produção de biogás. Os potenciais médios obtidos foram 0,033; 0,181; 0,685; 0,788 e 1,132 m³ por kg de afluente, estrume, ST adicionados, SV adicionados e SV reduzidos, respectivamente. Não foram verificadas diferenças quanto ao teor médio de metano no biogás entre dietas e fases. As concentrações médias dos nutrientes N, P, K, Ca, Mg, Na, Fe, Mn, Zn e Cu no afluente e efluente dos biodigestores variaram entre as dietas e fases.

Qualitative-feed-restricted heavy swine: meat quality and morpho-histochemical characteristics of muscle fibers

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

Effect of probiotic and prebiotic inclusion in weaned piglet diets on structure and ultra-structure of small intestine

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

Effect of inclusion of citrus pulp in the diet of finishing swines

No primeiro ensaio foram utilizados 16 suínos machos castrados da linhagem Topigs, com peso inicial de 80,5±4,7 kg, para a avaliação biológica da polpa cítrica. Por apresentar 18,85% de fibra em detergente neutro e 41,18% de fibra solúvel em detergente neutro, a polpa cítrica mostrou-se como um ingrediente viável a ser utilizado em programas de restrição alimentar qualitativa. No segundo ensaio foram utilizados 36 suínos machos castrados, com peso inicial de 83,7±5,1 kg, recebendo rações com níveis de 0, 10, 20 e 30% de polpa cítrica. Os animais foram abatidos com peso próximo de 130 kg, sendo avaliados quanto ao desempenho e parâmetros séricos. Houve resposta quadrática (P<0,05) para ganho diário de peso e número de dias para atingir o peso de 130 kg, em função dos níveis de polpa cítrica na dieta, sendo observados melhores resultados com níveis de inclusão de 10,79 e 10,97%, respectivamente. Para os parâmetros séricos avaliados, não foi observado efeito (P>0,05) dos níveis de polpa cítrica sobre a uréia e triacilgliceróis, porém houve resposta quadrática (P<0,05) para o colesterol em função dos níveis de polpa cítrica.