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.

An incident at sea: The historic combat between U.S. Navy Blimp K-74 and U-Boat 134

This thesis studies the historic encounter between United States Navy airship K-74 and Nazi submarine U-134 in World War II. The Battle of the Atlantic is examined through case study of this one U-boat and its voyage. In all things except her fight with the American blimp, the patrol was perfectly typical. Looked at from start to finish, both her reports and the reports of the Allies encountered, many realities of the war can be studied. U-134 sailed to attack shipping between Florida and Cuba. She was challenged by the attack of United States Navy airship K-74 over the Florida Straits. It is the only documented instance of battle between two such combatants in history. That merits attention. Thesis finding disprove historian William Eliot Morison’s contention that the K-74 airship bombs were not dropped and did not damage the U-boat. Study of this U-boat and its antagonist broadens our understanding of the Battle of the Atlantic. It is a contribution to our knowledge of military, naval, aviation, and local history.

Todo nordeste que couber a gente publica: o The New York Times e as representações do nordeste brasileiro na era da política da boa vizinhança (1933-1945)

The Brazilian Northeast has been a constant subject for journalists of one of the world's leading media companies - The New York Times - between 1933 and 1945. This time, the US government implemented a new foreign policy for Latin America - known as the Good Neighbor Policy. It preached, various points including more respect and attention to the countries south of U.S. borders. Because of her geostrategic importance, Brazil was one of the countries that received the most attention of the bureaucracy and American press. This study investigates the multiple Northeast representations formulated in The New York Times' pages when the Americans were spotlight is on the region. It delineates similarities and differences between the NYT, the press and the governments of the United States and Brazil from the ways of conceiving this particular part of Brazil. Through the analysis of texts, photographs and maps, it is dedicated to establish connections between spaces, press and politics of the 1930s and 1940s. These decades there were relevant changes in the political landscape of both countries that permeated the news, reports and articles of NYT. Circumstances such as the 1935 armed uprisings - known as Communist Conspiracy - the installation and operation of the New State, and especially the Brazilian and US participation in World War II and the bilateral negotiations on the installation of US bases in Brazil were cardinal for the various Northeast images that circulated in the publication. The region was repeatedly subject of correspondent of the New York newspaper in Brazil, Frank M. Garcia, but also present on matters of professionals responsible for various sections: review of books, publishing, tourism, foreign affairs, etc. Along the investigated period, the visions of the region made in the articles published in the newspaper that suffered major metamorphoses. Starting with Northeast of the drought, famine and death recurrent in Brazilian literature to the most dangerous point for hemispheric defense, passing through representations of the American West lawless nineteenth century and the Latin America marked by the dominance of exotic nature and stagnation, a space to be transformed by the US technical knowledge.

O jornal Tribuna do Norte e a publicidade do crime na esfera pública (1950-1970)

The study aims to analyze the crime of the advertising process in the post-World War II period in Brazil, considering the Tribuna do Norte newspaper as one of the main vectors of this production in the public sphere of Rio Grande do Norte. The theoretical discussion is based on sociologists Jürgen Habermas and John Thompson, among others, that bring ideas about the relationship between the press and the public space. Our research in the journal is during the period from 1950, the year of the creation of this press, to 1970, in the context of AI-5 law. This period is considered the consolidation of this periodic in the populist context of Aluízio Alves, as well as the articulation with political changes after and before military coup in 1964. The publicity of crime is showed as a historical building, involving journalistic procedures, subjects and spaces. The publicity is related to commercial and political questions when some facts turned into a public event. In this sense, this research focuses on the publicity in its political dimensions. Related to the methodology, it is an empirical and qualitative study, based on literature, with a descriptive and interpretative approach, according to historian Tânia de Luca. The corpus of analyze is composed by notes, titles, news, reports, advertisements, image texts, among another textual genres. The chapters present a study about the building and changes of the populist journalism; the publicity of crime in democratic times; besides the military coup in 1964 and the changes of publicity of crime. The results of analyzes show that Tribuna do Norte, although has adopted more liberal pattern from North American presses, during the analyzed period has yet conservative and authoritative patterns from old potiguar presses. In this period, the political practice, in spite of diverse commercial interests, was an important element in the trajectory of this ambiguous journalism that has influencing, in a significant way, the production of news of crime.

Institutional Persistence in Eastern Europe: Economic and Political Legacies of Empires and Communism

This dissertation seeks to advance our understanding of the roles that institutions play in economic development. How do institutions evolve? What mechanisms are responsible for their persistence? What effects do they have on economic development?

I address these questions using historical and contemporary data from Eastern Europe and Russia. This area is relatively understudied by development economists. It also has a very interesting history. For one thing, for several centuries it was divided between different empires. For another, it experienced wars and socialism in the 20th century. I use some of these exogenous shocks as quasi-natural social experiments to study the institutional transformations and its effects on economic development both in the short and long run.

This first chapter explores whether economic, social, and political institutions vary in their resistance to policies designed to remove them. The empirical context for the analysis is Romania from 1690 to the 2000s. Romania represents an excellent laboratory for studying the persistence of different types of historical institutional legacies. In the 18th and 19th centuries, Romania was split between the Habsburg and Ottoman Empires, where political and economic institutions differed. The Habsburgs imposed less extractive institutions relative to the Ottomans: stronger rule of law, a more stable and predictable state, a more developed civil society, and less corruption. In the 20th century, the Romanian Communist regime tried deliberately to homogenize the country along all relevant dimensions. It was only partially successful. Using a regression discontinuity design, I document the persistence of economic outcomes, social capital, and political attitudes. First, I document remarkable convergence in urbanization, education, unemployment, and income between the two former empires. Second, regarding social capital, no significant differences in organizational membership, trust in bureaucracy, and corruption persist today. Finally, even though the Communists tried to change all political attitudes, significant discontinuities exist in current voting behavior at the former Habsburg-Ottoman border. Using data from the parliamentary elections of 1996-2008, I find that former Habsburg rule decreases by around 6 percentage points the vote share of the major post-Communist left party and increases by around 2 and 5 percentage points the vote shares of the main anti-Communist and liberal parties, respectively.

The second chapter investigates the effects of Stalin’s mass deportations on distrust in central authority. Four deported ethnic groups were not rehabilitated after Stalin’s death; they remained in permanent exile until the disintegration of the Soviet Union. This allows one to distinguish between the effects of the groups that returned to their homelands and those of the groups that were not allowed to return. Using regional data from the 1991 referendum on the future of the Soviet Union, I find that deportations have a negative interim effect on trust in central authority in both the regions of destination and those of origin. The effect is stronger for ethnic groups that remained in permanent exile in the destination regions. Using data from the Life in Transition Survey, the chapter also documents a long-term effect of deportations in the destination regions.

The third chapter studies the short-term effect of Russian colonization of Central Asia on economic development. I use data on the regions of origin of Russian settlers and push factors to construct an instrument for Russian migration to Central Asia. This instrument allows me to interpret the outcomes causally. The main finding is that the massive influx of Russians into the region during the 1897-1926 period had a significant positive effect on indigenous literacy. The effect is stronger for men and in rural areas. Evidently, interactions between natives and Russians through the paid labor market was an important mechanism of human capital transmission in the context of colonization.

The findings of these chapters provide additional evidence that history and institutions do matter for economic development. Moreover, the dissertation also illuminates the relative persistence of institutions. In particular, political and social capital legacies of institutions might outlast economic legacies. I find that most economic differences between the former empires in Romania have disappeared. By the same token, there are significant discontinuities in political outcomes. People in former Habsburg Romania provide greater support for liberalization, privatization, and market economy, whereas voters in Ottoman Romania vote more for redistribution and government control over the economy.

In the former Soviet Union, Stalin’s deportations during World War II have a long-term negative effect on social capital. Today’s residents of the destination regions of deportations show significantly lower levels of trust in central authority. This is despite the fact that the Communist regime tried to eliminate any source of opposition and used propaganda to homogenize people’s political and social attitudes towards the authorities. In Central Asia, the influx of Russian settlers had a positive short-term effect on human capital of indigenous population by the 1920s, which also might have persisted over time.

From a development perspective, these findings stress the importance of institutions for future paths of development. Even if past institutional differences are not apparent for a certain period of time, as was the case with the former Communist countries, they can polarize society later on, hampering economic development in the long run. Different institutions in the past, which do not exist anymore, can thus contribute to current political instability and animosity.

British Double Agents and Operation Fortitude: A New Perspective

On June 6th, 1944, Allied forces stormed the beaches of Normandy as a part of Operation Overlord, the Allied invasion of France. While they experienced pockets of stiff resistance, Allied troops sustained far fewer casualties than they had expected. The reason for this was due to Operation Fortitude, a deception mission that intended to fool Hitler about the time and location of the Allied invasion mission. The use of double agents by British Intelligence services was essential for the effective execution of Fortitude. The story of the double agents goes beyond their success during Fortitude. Double agents were initially recruited as German agents, but key agents immediately turned themselves in to British authorities upon reaching the nation. These agents decided to become involved with British Intelligence due to broader circumstances that were happening in Europe. The emergence of Fascist regimes disrupted the political landscape of Europe and led to widespread condemnation from political and social spheres. Their development as double agents became crucial to their effectiveness during Operation Fortitude. Their successful infiltration of German Intelligence allowed them to convince Hitler and German High Command that the main Allied invasion force would come at the Pas de Calais instead of Normandy. The result was that the Allies met an unprepared German defense force on D-Day and were able to advance past the beaches. The work of the double agents during Fortitude saved thousands of Allied lives and was vital to the success of Operation Overlord.

An Economic Analysis of Global Policy Proposals to Prohibit Compensation of Blood Plasma Donors

© 2016 International Journal of the Economics of Business.Human blood plasma and its derivative therapies have been used therapeutically for more than 50 years, after first being widely used to treat injuries during World War II. In certain countries, manufacturers of these therapies – known as plasma-derived medicinal products (PDMPs) – compensate plasma donors, raising healthcare and ethical concerns among some parties. In particular, the World Health Organization has taken a strong advocacy position that compensation for blood donations should be eliminated worldwide. This review evaluates the key economic factors underlying the supply and demand for PDMPs and the evidence pointing to the policy options that are most likely to maintain a reliable supply of life-sustaining therapies. It concludes that compensated plasma donation is important for maintaining adequate and consistent supplies of plasma and limits the risk of under-treatment for the foreseeable future.

José Aricó y la "crisis de civilización" : La búsqueda de una imbricación democrático-socialista para un desarrollo de la "dilatación de la subjetividad" (1979-1986)

Moviéndonos entre la sociología política y la historia intelectual, abordaremos en este trabajo aspectos de la obra del "gramsciano argentino" José María Aricó (1931-1991). Con una reconocida actividad político-intelectual desarrollada en su país durante tres décadas, el golpe militar de 1976 obliga a Aricó a marchar al exilio. Anclado en México, la temática de la transición a la democracia, acuciante en distintos países de América Latina y de Europa, lo hace desembocar en una serie de estudios sobre vínculos entre la tradición democrática y la socialista, sobre la noción de progreso y sobre el preocupante divorcio que entre cultura y política se viene profundizando desde los tiempos de la Segunda Guerra Mundial. Siempre con los escritos de Gramsci latiendo en el núcleo de sus preocupaciones, Aricó regresa a la Argentina en 1983. Considerando que ni el liberalismo, ni el marxismo-leninismo, ni el populismo, ni la socialdemocracia pueden ya contribuir al montaje de un "pensamiento fuerte" de expectativas emancipatorias, profundizando además en la temática de la "dilatación de la subjetividad" y en un manejo desprejuiciado de la obra del intelectual reaccionario alemán Carl Schmitt, Aricó ensaya un recorrido inédito, estimulado por la idea-fuerza de una "democracia social avanzada", capaz de dar respuestas ambiciosas a aquello que viene señalando como una crisis de civilización.

José Aricó y la "crisis de civilización" : La búsqueda de una imbricación democrático-socialista para un desarrollo de la "dilatación de la subjetividad" (1979-1986)

Moviéndonos entre la sociología política y la historia intelectual, abordaremos en este trabajo aspectos de la obra del "gramsciano argentino" José María Aricó (1931-1991). Con una reconocida actividad político-intelectual desarrollada en su país durante tres décadas, el golpe militar de 1976 obliga a Aricó a marchar al exilio. Anclado en México, la temática de la transición a la democracia, acuciante en distintos países de América Latina y de Europa, lo hace desembocar en una serie de estudios sobre vínculos entre la tradición democrática y la socialista, sobre la noción de progreso y sobre el preocupante divorcio que entre cultura y política se viene profundizando desde los tiempos de la Segunda Guerra Mundial. Siempre con los escritos de Gramsci latiendo en el núcleo de sus preocupaciones, Aricó regresa a la Argentina en 1983. Considerando que ni el liberalismo, ni el marxismo-leninismo, ni el populismo, ni la socialdemocracia pueden ya contribuir al montaje de un "pensamiento fuerte" de expectativas emancipatorias, profundizando además en la temática de la "dilatación de la subjetividad" y en un manejo desprejuiciado de la obra del intelectual reaccionario alemán Carl Schmitt, Aricó ensaya un recorrido inédito, estimulado por la idea-fuerza de una "democracia social avanzada", capaz de dar respuestas ambiciosas a aquello que viene señalando como una crisis de civilización.

José Aricó y la "crisis de civilización" : La búsqueda de una imbricación democrático-socialista para un desarrollo de la "dilatación de la subjetividad" (1979-1986)

Moviéndonos entre la sociología política y la historia intelectual, abordaremos en este trabajo aspectos de la obra del "gramsciano argentino" José María Aricó (1931-1991). Con una reconocida actividad político-intelectual desarrollada en su país durante tres décadas, el golpe militar de 1976 obliga a Aricó a marchar al exilio. Anclado en México, la temática de la transición a la democracia, acuciante en distintos países de América Latina y de Europa, lo hace desembocar en una serie de estudios sobre vínculos entre la tradición democrática y la socialista, sobre la noción de progreso y sobre el preocupante divorcio que entre cultura y política se viene profundizando desde los tiempos de la Segunda Guerra Mundial. Siempre con los escritos de Gramsci latiendo en el núcleo de sus preocupaciones, Aricó regresa a la Argentina en 1983. Considerando que ni el liberalismo, ni el marxismo-leninismo, ni el populismo, ni la socialdemocracia pueden ya contribuir al montaje de un "pensamiento fuerte" de expectativas emancipatorias, profundizando además en la temática de la "dilatación de la subjetividad" y en un manejo desprejuiciado de la obra del intelectual reaccionario alemán Carl Schmitt, Aricó ensaya un recorrido inédito, estimulado por la idea-fuerza de una "democracia social avanzada", capaz de dar respuestas ambiciosas a aquello que viene señalando como una crisis de civilización.

Contemporary Transformations of the Relations between Politics, Culture and Religion in Western Europe. Some Notes on the Spanish Case

According to Tilly, two laws shaped the process of transformation undergone by Western European societies since the Peace of Westphalia until the end of the 20th century: their increasing inner homogenisation and their growing heterogeneity between them. Cultural inner homogenisation affected, fi rst, those ethnic groups living within the territories of the said states. The second phase of homogenisation impinged on those groups that immigrated after World War II. This process followed different models according to the country considered, but the 1973 oil crisis revealed their general lack of success. During the last quarter of the 20th century and onwards, these European societies have been altered by two progressive and contradictory global logics: a process of cultural homogenisation at the world level (rather than society level) and a process of cultural re-creation led by those groups with an immigrant background, who have reacted against their integration shortcomings by searching for new sources of social and personal esteem in their respective cultural and religious traditions. This paper seeks to clarify these processes from a social differentiation and political representation theory perspective. The latter becomes indispensable, as the said processes have happened in a context in which the structure of relations (i.e. communication) between civil society and the democratic political sphere have experienced a radical crisis. In this way, the complex relations that exist between civil society, culture, religion and politics in these Western European societies are depicted.

Proyección y política cultural estadounidense en argentina (1928-1941)

El objetivo del artículo es analizar algunos aspectos de los orígenes de la “política cultural” estadounidense en Argentina. La atención se concentrará en el pasaje desde las declaraciones del presidente Hoover, que contribuyeron a favorecer un clima útil y propicio a la intensificación de los intercambios, a los primeros pasos concretos realizados en el periodo de la presidencia de Roosevelt. Se tratará, en particular, de individualizar las características de la cooperación establecida entre organismos estadounidenses y argentinos para favorecer la proyección cultural estadounidense en el país y el intercambio cultural entre Estados Unidos y Argentina, donde se iba intensificando la difusión de un sentimiento anti-imperialista, y que era entonces objetivo de formas de propaganda particularmente agresivas por parte de los regímenes totalitarios.

Fiction and reality in "The Kindly Ones" of Jonathan Littell

This paper studies the novel The Kindly Ones, whose main plot charts the anguished memories of a Nazi officer. The reader of this novel is plunged into the harshest atrocities of the Holocaust and WWII, as these are recounted by a perverse conscience who is unmoved by the most terrible actions. Fiction and reality are contrasted in the novel against the framework of history writing and the subsequent debates sparked by historical elaboration. This novel perceptively captures historical truth, thus calling for critical attention upon the collective responsibility which will prevent the repetition of events.

The Collusion of Feminist and Postmodernist Impulses in E.L. Doctorow’s "Ragtime"

Many critics of Doctorow have classified him as a postmodernist writer, acknowledging that a wide number of thematic and stylistic features of his early fiction emanate from the postmodern context in which he took his first steps as a writer. Yet, these novels have an eminently social and ethical scope that may be best perceived in their intellectual engagement and support of feminist concerns. This is certainly the case of Doctorow’s fourth and most successful novel, Ragtime. The purpose of this paper will be two-fold. I will explore Ragtime’s indebtedness to postmodern aesthetics and themes, but also its feminist elements. Thus, on the one hand, I will focus on issues of uncertainty, indeterminacy of meaning, plurality and decentering of subjectivity; on the other hand, I will examine the novel’s attitude towards gender oppression, violence and objectification, its denunciation of hegemonic gender configurations and its voicing of certain feminist demands. This analysis will lead to an examination of the problematic collusion of the mostly white, male, patriarchal aesthetics of postmodernism and feminist politics in the novel. I will attempt to establish how these two traditionally conflicting modes coexist and interact in Ragtime.

Land, Power and Technology : Essays on Political Economy and Historical Development

Land Ownership and Development: Evidence from Postwar Japan This paper analyzes the effect of land ownership on technology adoption and structural transformation. A large-scale land reform in postwar Japan enforced a large number of tenant farmers who were cultivating land to become owners of this land. I find that the municipalities which had many owner farmers after the land reform tended to experience a quick entry of new agricultural machines which became available after the reform. The adoption of the machines reduced the dependence on family labor, and led to a reallocation of labor from agriculture to industries and service sectors in urban centers when these sectors were growing. I also analyze the aggregate impact of labor reallocation on economic growth by using a simple growth model and micro data. I find that it increased GDP by about 12 percent of the GDP in 1974 during 1955-74. I also find a large and positive effect on agricultural productivity. Loyalty and Treason: Theory and Evidence from Japan's Land Reform A historically large-scale land reform in Japan after World War II enforced by the occupation forces redistributed a large area of farmlands to tenant farmers. The reform demolished hierarchical structures by weakening landlords' power in villages and towns. This paper investigates how the change in the social and economic structure of small communities affects electoral outcomes in the presence of clientelism. I find that there was a considerable decrease in the vote share of conservative parties in highly affected areas after the reform. I find the supporting evidence that the effect was driven by the fact that the tenant farmers who had obtained land exited from the long-term tenancy contract and became independent landowners. The effect was relatively persistent. Finally, I also find the surprising result that there was a decrease, rather than an increase, in turnout in these areas after the reform.  Geography and State Fragmentation We examine how geography affects the location of borders between sovereign states in Europe and surrounding areas from 1500 until today at the grid-cell level. This is motivated by an observation that the richest places in this region also have the highest historical border presence, suggesting a hitherto unexplored link between geography and modern development, working through state fragmentation. The raw correlations show that borders tend to be located on mountains, by rivers, closer to coasts, and in areas suitable for rainfed, but not irrigated, agriculture. Many of these patterns also hold with rigorous spatial controls. For example, cells with more rivers and more rugged terrain than their neighboring cells have higher border densities. However, the fragmenting effects of suitability for rainfed agriculture are reversed with such neighbor controls. Moreover, we find that borders are less likely to survive over time when they separate large states from small, but this size-difference effect is mitigated by, e.g., rugged terrain.