Financing social security : issues and options for the long run.

"November 1982"--Cover.

Simulating the long-run aggregate economic and intergenerational redistributive effects of social security policy /

"August 1992."

Long-run effects of unfunded social security with earnings-dependent benefits

This paper examines the effects of unfunded social security with bequests, fertility and human capital by considering a mix of earnings-dependent and universal social security benefits. We show that social security is more likely to promote growth by reducing fertility and increasing human capital investment if its benefits are more dependent on individuals' own earnings. Through simulations, we find that the differences in the effects of social security resulting from variations in the benefit formula can be too substantial to be ignored. We also investigate the welfare effect in calibrated economies. (C) 2003 Elsevier B.V. All rights reserved.

Pre-colonial institutions and long-run development in Latin America

The present doctoral thesis studies the association between pre-colonial institutions and long-run development in Latin America. The thesis is organised as follows: Chapter 1 places the motivation of the thesis by underlying relevant contributions in the literature on long-run development. I then set out the main objective of the thesis, followed by a brief outline of it. In Chapter 2, I study the effects of pre-colonial institutions on present-day socioeconomic outcomes for Latin America. The main thesis of this chapter is that more advanced pre-colonial institutions relate to better socioeconomic outcomes today - principally, but not only, through their effects on the Amerindian population. I test such hypothesis with a dataset of 324 sub-national administrative units covering all mainland Latin American countries. The extensive range of controls covers factors such as climate, location, natural resources, colonial activities and pre-colonial characteristics - plus country fixed effects. Results strongly support the main thesis. In Chapter 3, I further analyse the association between pre-colonial institutions and present-day economic development in Latin America by using the historical ethnic homelands as my main unit of analysis. The main hypothesis is that ethnic homelands inhabited by more advanced ethnic groups -as measured by their levels of institutional complexity- relate to better economic development today. To track these long-run effects, I construct a new dataset by digitising historiographical maps allowing me to pinpoint the geospatial location of ethnic homelands as of the XVI century. As a result, 375 ethnic homelands are created. I then capture the levels of economic development at the ethnic homeland level by making use of alternative economic measures --satellite light density data. After controlling for country-specific characteristics and applying a large battery of geographical, locational, and historical factors, I found that the effects of pre-colonial institutions relate to a higher light density --as a proxy for economic activity- in ethnic homelands where more advanced ethnic groups lived. In Chapter 4, I explore a mechanism linking the persistence of pre-colonial institutions in Latin America over the long-run: Colonial and post-colonial strategies along with the ethnic political capacity worked in tandem allowing larger Amerindian groups to "support" the new political systems in ways that would benefit their respective ethnic groups as well as the population at large. This mechanism may have allowed the effects of pre-colonial institutions to influence socioeconomic development outcomes up to today. To shed lights on this mechanism, I combine the index of pre-colonial institutions prepared for the second chapter of the present thesis with individual-level survey data on people's attitudes. By controlling for key observable and unobservable country-specific characteristics, the main empirical results show that areas with a history of more advanced pre-colonial institutions increase the probability of individuals supporting present-day political institutions. Finally, in Chapter 5, I summarise the main findings of the thesis, and emphasise the key weaknesses of the study as well as potential avenues for future research.

Long-term relationship between energy consumption and GDP in Latin America: an empirical assessment using panel data

The main objetive of this research is to evaluate the long term relationship between energy consumption and GDP for some Latin American countries in the period 1980-2009 -- The estimation has been done through the non-stationary panel approach, using the production function in order to control other sources of GDP variation, such as capital and labor -- In addition to this, a panel unit root tests are used in order to identify the non-stationarity of these variables, followed by the application of panel cointegration test proposed by Pedroni (2004) to avoid a spurious regression (Entorf, 1997; Kao, 1999)

Essays in Long-run Development and Spatial Economics

This thesis tries to further our understanding for why some countries today are more prosperous than others. It establishes that part of today's observed variation in several proxies such as income or gender inequality have been determined in the distant past. Chapter one shows that 450 years of (Catholic) Portuguese colonisation had a long-lasting impact in India when it comes to education and female emancipation. Furthermore I use a historical quasi-experiment that happened 250 years ago in order to show that different outcomes have different degrees of persitence over time. Educational gaps between males and females seemingly wash out a few decades after the public provision of schools. The male biased sex-ratios on the other hand stay virtually unchanged despite governmental efforts. This provides evidence that deep rooted son preferences are much harder to overcome, suggesting that a differential approach is needed to tackle sex-selective abortion and female neglect. The second chapter proposes improvements for the execution of Spatial Regression Discontinuity Designs. These suggestions are accompanied by a full-fledged spatial statistical package written in R. Chapter three introduces a quantitative economic geography model in order to study the peculiar evolution of the European urban system on its way to the Industrial Revolution. It can explain the shift of economic gravity from the Mediterranean towards the North-Sea ("little divergence"). The framework provides novel insights on the importance of agricultural trade costs and the peculiar geography of Europe with its extended coastline and dense network of navigable rivers.

Fertility and female work force participation in Bangladesh: Causality and cointegration

This paper examines the causal links between fertility and female labor force participation in Bangladesh over the period 1974-2000 by specifying a bivariate and several trivariate models in a vector error correction framework. The three trivariate models alternatively include average age at first marriage for females, per capita GDP and infant mortality rate, which control for the effects of other socio-economic factors on fertility and female labor force participation. All the specified models indicate an inverse long-run relationship between fertility and female labor force participation. While the bivariate model also indicates bidirectional causality, the multivariate models confirm only a unidirectional causality – from labor force participation to fertility. Further, per capita GDP and infant mortality rate appear to Granger-cause both fertility and female labor force participation.

European Union emissions trading scheme impact on the Spanish electricity price during phase II and phase III implementation

The European Union Emissions Trading Scheme (EU ETS) is a cornerstone of the European Union's policy to combat climate change and its key tool for reducing industrial greenhouse gas emissions cost-effectively. The purpose of the present work is to evaluate the influence of CO2 opportunity cost on the Spanish wholesale electricity price. Our sample includes all Phase II of the EU ETS and the first year of Phase III implementation, from January 2008 to December 2013. A vector error correction model (VECM) is applied to estimate not only long-run equilibrium relations, but also short-run interactions between the electricity price and the fuel (natural gas and coal) and carbon prices. The four commodities prices are modeled as joint endogenous variables with air temperature and renewable energy as exogenous variables. We found a long-run relationship (cointegration) between electricity price, carbon price, and fuel prices. By estimating the dynamic pass-through of carbon price into electricity price for different periods of our sample, it is possible to observe the weakening of the link between carbon and electricity prices as a result from the collapse on CO2 prices, therefore compromising the efficacy of the system to reach proposed environmental goals. This conclusion is in line with the need to shape new policies within the framework of the EU ETS that prevent excessive low prices for carbon over extended periods of time.

The Global Dimension to Fiscal Sustainability

This paper examines the issue of fiscal sustainability in emerging market countries and industrial countries. We highlight the importance of the time series properties of the primary surplus and debt, and find evidence of a positive long run relationship. Consequently we emphasise, that especially for emerging markets, it is important to recognise the implications of global capital market shocks for fiscal sustainability, a relationship which has hitherto been ignored in the empirical literature. Using a factor model we demonstrate that the relationship between deficit and debt is conditional upon a global factor and we suggest that this global factor is related to world-wide liquidity. We also demonstrate that this acts as a constraint on emerging market economies’ fiscal policy.

The Global Side of the Investment-Savings Puzzle

In this paper we re-examine the long standing and puzzling correlation between national savings and investment in industrial countries. We apply an econometric methodology that allows us to separate idiosyncratic correlation at the country level from correlation at the global level. In a major break with the existing literature, we find no evidence of a long run relationship in the idiosyncratic components of savings and investment. We also find that the global components in savings and investments comove, indicating that they react to shocks of a global nature.

Financial Development, Financial Fragility, and Growth

This paper studies the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity. On the one hand, the empirical growth literature finds a positive effect of financial depth as measured by, for instance, private domestic credit and liquid liabilities (e.g., Levine, Loayza, and Beck 2000). On the other hand, the banking and currency crisis literature finds that monetary aggregates, such as domestic credit, are among the best predictors of crises and their related economic downturns (e.g., Kaminski and Reinhart 1999). The paper accounts for these contrasting effects based on the distinction between the short- and long-run impacts of financial intermediation. Working with a panel of cross-country and time-series observations, the paper estimates an encompassing model of short- and long-run effects using the Pooled Mean Group estimator developed by Pesaran, Shin, and Smith (1999). The conclusion from this analysis is that a positive long-run relationship between financial intermediation and output growth co-exists with a, mostly, negative short-run relationship. The paper further develops an explanation for these contrasting effects by relating them to recent theoretical models, by linking the estimated short-run effects to measures of financial fragility (namely, banking crises and financial volatility), and by jointly analyzing the effects of financial depth and fragility in classic panel growth regressions.

Financial development, financial fragility and growth

This paper studies the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity. On the one hand, the empirical growth literature finds a positive effect of financial depth as measured by, for instance, private domestic credit and liquid liabilities (e.g., Levine, Loayza, and Beck 2000). On the other hand, the banking and currency crisis literature finds that monetary aggregates, such as domestic credit, are among the best predictors of crises and their related economic downturns (e.g., Kaminski and Reinhart 1999). The paper accounts for these contrasting effects based on the distinction between the short- and long-run impacts of financial intermediation. Working with a panel of cross-country and time-series observations, the paper estimates an encompassing model of short- and long-run effects using the Pooled Mean Group estimator developed by Pesaran, Shin, and Smith (1999). The conclusion from this analysis is that a positive long-run relationship between financial intermediation and output growth co-exists with a, mostly, negative short-run relationship. The paper further develops an explanation for these contrasting effects by relating them to recent theoretical models, by linking the estimated short-run effects to measures of financial fragility(namely, banking crises and financial volatility), and by jointly analyzing the effects of financial depth and fragility in classic panel growth regressions.

Omakotitalojen hintadynamiikka Suomessa

Tämän tutkielma tutkii omakotitalojen hintadynamiikkaa Suomessa 1985Q1-2009Q2 välisenä aikana. Tarkoituksena on luoda pitkänaikavälin tasapainomalli sekä lyhyenajan vektorivirheenkorjausmalli, jonka avulla voidaan selvittää asuntojen hintojen mukautumisnopeus kohti tasapainotilaa. Pitkänajan tasapainomallin mukaan omakotitalojen hintaan vaikuttavat eniten kotitalouksien käytettävissä olevat tulot sekä suhteellinen velkaantuneisuus. Koron merkitys jäi mallissa suhteellisen pieneksi. Sekä tulot että velkaantuneisuus vaikuttavat omakotitalojen hintaan positiivisesti. Asuntojen hintojen mukautumisnopeus kohti tasapainotilaa on kohtalaisen nopeaa. Mallin mukaan Suomessa ei ole havaittavissa selvää asuntojen hintakuplaa.

Dinámica de la producción industrial e importación de bienes de capital y materias primas: relaciones de largo plazo y ajuste dinámico

El presente documento se propone estimar y analizar la existencia de una relación de equilibrio de largo plazo entre la producción industrial y la importación de bienes de capital y materias primas para el período enero de 1993 - abril de 2005, que resulta útil para monitorear la dinámica industrial en el corto plazo y las complementariedades que pueden existir entre los factores productivos del mercado interno con el externo. Para tal efecto, se desarrolla un análisis econométrico de la metodología de cointegración con componentes estacionales aplicado a las variables índice de producción real (IPR), importación de bienes de capital e importación de materias primas de la industria colombiana. A partir de un modelo de cointegración estacional se evidencia empíricamente la existencia de una relación de equilibrio de largo plazo entre estas variables durante el período analizado. Adicionalmente, se utiliza el modelo estimado para realizar ejercicios de impulso-respuesta para analizar la trayectoria futura de las variables de interés cuando son afectadas por choques exógenos en el tiempo.