Pass-through of International food prices to domestic ination during and after the great recession: evidence from a set of Latin American economies

We examined how international food price shocks have impacted local ination processes in Brazil, Chile, Colombia, Mexico, and Peru in the past decade -- Using impulse-response analysis coming from cointegrated VARs, we wind that international food ination shocks take from one to six quarters to pass through to domestic head-line ination, depending on the country -- In addition, by calculating the elasticity of local prices to an international food price shock, we found that this pass-through is not complete -- We also take a closer look at how this type of shock affects local food and core prices separately, and asses the possibility second round effects over core ination stemming from the shock -- We wind that a transmission to headline prices does occur, and that part of the transmission is associated with rising core prices both directly and through possible second round effects, which implies a role for monetary policy when such a shock takes place -- This is especially relevant given that international food prices have recently been on an upward trend after falling considerably during the Great Recession

Real exchange rate and elasticity of labour supply in a balance-of-payments-constrained macrodynamics

A macrodynamic model is proposed in which the real exchange rate and the elasticity of labour supply interact defining different trajectories of growth and income distribution in a developing economy. Growth depends on imports of capital goods which are paid with exports (there are no capital flows) and hence is constrained by equilibrium in current account. The role of the elasticity of labour supply is to prevent the real exchange rate from appreciating as the economy grows, thereby sustaining international competitiveness. The model allows for endogenous technological change and considers the impact of migration from the subsistence to the modern sector on the cumulative (Kaldor-Verdoorn) process of learning.

Essays on international economics

This study in International Economics has three main goals. First, to indicate, among seven price indices, the one with the highest purchasing power parity (PPP) evidence; second, to suggest that the international trade theory explains to satisfaction the real exchange rate parity among countries with similar relative-factor-endowment; and third, to study the impact of the Brazilian trade openness on labor demand elasticity.

Implications of ernbodied technological change for development economics

Employing a embodied technologic change model in which the time decision of scrapping old vintages of capital and adopt newer one is endogenous we show that the elasticity of substitutions among capital and labor plays a key role in determining the optimum life span of capital. In particular, for the CD case the life span of capital does not depend on the relative price of it. The estimation of the model's long-run investment function shows, for a Panel data set consisting of 125 economies for 25 years, that the price elasticity of investment is lower than one; we rejected the CD specification. Our calibration for the US suggests 0.4 for the technical elasticity of substitution. In order to get a theoretical consistent concept of aggregate capital we derive the relative price profile for a shadow second-hand market for capital. The shape of the model's theoretical price curve reproduces the empírical estimation of it. \lVe plug the calibrate version of the long-run solution of the model to a cross-section of economies data set to get the implied TFP, that is, the part of the productivity which is not explained by the model. We show that the mo dei represent a good improvement, comparing to the standard neoc!assical growth model with CD production function and disembodied technical change, in accounting the world diversity in productivity. In addition the model describes the fact that a very poor economy can experience fast growth based on capital accumulation until the point of becoming a middle income economy; from this point on it has to rely on TFP increase in order to keep growing.

Essays in the Economics of Ageing

In the first paper, I assess if financial incentives may be used as an effective device to induce workers to postpone retirement by evaluating the Italian so called “super bonus” reform. The bonus consisted in economic incentives given for a limited period to private sector workers who had reached the requirements for seniority pension. Crucially for this study, public workers were not entitled to the bonus. Using data from the Bank of Italy Survey on Household Income andWealth, and exploiting the DID-Probit strategy proposed by Blundell et al. (JEEA, 2004), I assess the effect of the bonus on the decision to postpone retirement, by comparing private and public workers before and after the reform. Results suggest a reduction of 12ppt in the proportion of private workers who decided to retire among those qualifying for retirement. Results also suggest, not trivially, that most of the effect of the reform is driven by low-income workers. Finally, I propose an estimate of the extensive margin elasticity of Italian older workers. The second study estimates a structural reduced form of the “option value” model developed by Stock and Wise (1990) using Italian data from the Survey of Health, Ageing and Retirement in Europe (SHARE).Exploiting exogenous changes in social security wealth (SSW) results show a significant effect in the expected direction of SSW and of marginal incentives to retire. Results are robust even after controlling for individual heterogeneity and its correlation with financial incentives. Using detailed information on individuals, the results also highlights the importance of individual and job characteristics, which have been very little explored by this literature, as determinants of retirement. This suggests the potential of “tagging” in the design of social security incentives in order to reduce choice distortions and improve the overall efficiency of the system.

The price elasticity of demand for common stock

We study the price elasticity of demand for the common stock of an individual corporation. Despite the prevelance of assumptions that demand is perfectly elastic, there is little if any direct evidence in the literature to either support or reject that contention. Consistent with the notion of finite price elasticities, we find that the announcement of primary stock oferings by regulated firms depresses their stock prices and little if any evidence that this decline is the result of adverse information about future cash flows. Attempts to relate offer announcement effects directly to possible determinants of price elasticities, however, are inconclusive.

Essays in Greenhouse/Nursery Economics

This dissertation focuses on the greenhouse and nursery industry in the United States. Two major issues are explored: irrigation and plant disease. The first two essays examine wireless soil-moisture sensor networks, an emerging technology that measures soil moisture and optimizes irrigation levels in real time. The first essay describes a study in which a nationwide survey of commercial growers was administered to generate estimates of grower demand and willingness to pay for sensor networks. We find that adoption rates for a base system and demand for expansion components are decreasing in price, as expected. The price elasticity of the probability of adoption suggests that sensor networks are likely to diffuse at a rate somewhat greater than that of drip irrigation. In the second essay, yields, time-to-harvest, and plant quality were analyzed to measure sensor network profitability. Sensor-based irrigation was found to increase revenue by 62% and profit by 65% per year. The third essay investigates greenhouse nursery growers’ response to a quarantine imposed on the west coast of the United States from 2002 to present for the plant pathogen that causes Sudden Oak Death. I investigate whether growers choose to 1) improve their sanitation practices, which reduces the underlying risk of disease without increasing the difficulty of detecting the pathogen, 2) increase fungicide use, which also prevents disease but makes existing infections much harder to detect, or 3) change their crop composition towards more resistant species. First, a theoretical model is derived to formalize hypotheses on grower responses to the quarantine, and then these predictions are empirically tested using several public data sources. I do not find evidence that growers improve their sanitation practices in response to the quarantine. I do, however, find evidence that growers heavily increase their fungicide use in response to a quarantine policy that requires visual (as opposed to laboratory) inspection for the disease before every crop shipment, suggesting that the quarantine may have the adverse effect of making the pathogen harder to identify. I also do find evidence that growers shift away from susceptible crops and towards resistant crops.

Study of the surface hardness and modulus of elasticity of conventional and microwave-cured acrylic resins

The aim of this study was to evaluate the following acrylic resins: Clássico®, QC-20® and Lucitone®, recommended specifically for thermal polymerization, and Acron MC® and VIPI-WAVE®, made for polymerization by microwave energy. The resins were evaluated regarding their surface nanohardness and modulus of elasticity, while varying the polymerization time recommended by the manufacturer. They were also compared as to the presence of water absorbed by the samples. The technique used was nanoindentation, using the Nano Indenter XP®, MTS. According to an intra-group analysis, when using the polymerization time recommended by the manufacturer, a variation of 0.14 to 0.23 GPa for nanohardness and 2.61 to 3.73 GPa for modulus of elasticity was observed for the thermally polymerized resins. The variation for the resins made for polymerization by microwave energy was 0.15 to 0.22 GPa for nanohardness and 2.94 to 3.73 GPa for modulus of elasticity. The conclusion was that the Classico® resin presented higher nanohardness and higher modulus of elasticity values when compared to those of the same group, while Acron MC® presented the highest values for the same characteristics when compared to those of the same group. The water absorption evaluation showed that all the thermal polymerization resins, except for Lucitone®, presented significant nanohardness differences when submitted to dehydration or rehydration, while only Acron MC® presented no significant differences when submitted to a double polymerization time. Regarding the modulus of elasticity, it was observed that all the tested materials and products, except for Lucitone®, showed a significant increase in modulus of elasticity when submitted to a lack of hydration.

Relationship between birthweight and arterial elasticity in childhood

There is a considerable debate about the potential influence of fetal programming on cardiovascular diseases in adulthood. In the present prospective epidemiological cohort study, the relationship between birthweight and arterial elasticity in 472 children between 5 and 8 years of age was assessed. LAEI (large artery elasticity index), SAEI (small artery elasticity index) and BP (blood pressure) were assessed using the HDI/PulseWave CR-2000 CardioVascular Profiling System. Blood concentrations of glucose, total cholesterol and its fractions [LDL (low-density lipoprotein)-cholesterol and HDL (high-density lipoprotein)-cholesterol] and triacylglycerols (triglycerides) were determined by automated enzymatic methods. Insulin was assessed by a chemiluminescent method, insulin resistance by HOMA (homoeostasis model assessment) and CRP (C-reactive protein) by immunonephelometry. Two linear regression models were applied to investigate the relationship between the outcomes, LAEI and SAEI, and the following variables: birthweight, gestational age, glucose, LDL-cholesterol, HDL-cholesterol, triacylglycerols, insulin, CRP, HOMA, age, gender, waist circumference, per capita income, SBP (systolic BP) and DBP (diastolic BP). LAEI was positively associated with birthweight (P=0.036), waist circumference (P<0.001) and age (P<0.001), and negatively associated with CRP (P=0.024) and SBP (P<0.001). SAEI was positively associated with birthweight (P=0.04), waist circumference (P=0.001) and age (P<0.001), and negatively associated with DBP (P<0.001). Arterial elasticity was decreased in apparently healthy children who had lower birthweights, indicating an earlier atherogenetic susceptibility to cardiovascular diseases in adolescence and adult life. Possible explanations for the results include changes in angiogenesis during critical phases of intrauterine life caused by periods of fetal growth inhibition and local haemodynamic anomalies

A hybrid-Trefftz formulation for plane elasticity with selective enrichment of the approximations

This work is related to the so-called non-conventional finite element formulations. Essentially, a methodology for the enrichment of the initial approximation which is typical of the meshless methods and based on the clouds concept is introduced in the hybrid-Trefftz formulation for plane elasticity. The formulation presented allows for the approximation and direct enrichment of two independent fields: stresses in the domains and displacements on the boundaries of the elements. Defined by a set of elements and interior boundaries sharing a common node, the cloud notion is employed to select the enrichment support for the approximation fields. The numerical analysis performed reveals an excellent performance of the resulting formulation, characterized by the good approximation ability and a reduced computational effort. Copyright (C) 2009 John Wiley & Sons, Ltd.

A STUDY OF PENALTY FORMULATIONS USED IN THE NUMERICAL APPROXIMATION OF A RADIALLY SYMMETRIC ELASTICITY PROBLEM

We consider a class of two-dimensional problems in classical linear elasticity for which material overlapping occurs in the absence of singularities. Of course, material overlapping is not physically realistic, and one possible way to prevent it uses a constrained minimization theory. In this theory, a minimization problem consists of minimizing the total potential energy of a linear elastic body subject to the constraint that the deformation field must be locally invertible. Here, we use an interior and an exterior penalty formulation of the minimization problem together with both a standard finite element method and classical nonlinear programming techniques to compute the minimizers. We compare both formulations by solving a plane problem numerically in the context of the constrained minimization theory. The problem has a closed-form solution, which is used to validate the numerical results. This solution is regular everywhere, including the boundary. In particular, we show numerical results which indicate that, for a fixed finite element mesh, the sequences of numerical solutions obtained with both the interior and the exterior penalty formulations converge to the same limit function as the penalization is enforced. This limit function yields an approximate deformation field to the plane problem that is locally invertible at all points in the domain. As the mesh is refined, this field converges to the exact solution of the plane problem.

Private valuation of carbon sequestration in forest plantations

Approval of the Clean Development Mechanism, provided for in the Kyoto Protocol, enables countries with afforested land to trade in carbon emissions reduction certificates related to carbon dioxide equivalent quantities (CO(2-e)) stored within a certain forest area. Potential CO(2-e) above base line sequestration was determined for two forest sites on commercial eucalyptus plantations in northern Brazil (Bahia). Compensation values for silvicultural regimes involving rotation lengths greater than economically optimal were computed using the Faustmann formula. Mean values obtained were US$8.16 (MgCO(2-e))(-1) and US $7.19 (MgCO(2-e))(-1) for average and high site indexes, respectively. Results show that carbon supply is more cost-efficient in highly productive sites. Annuities of US$18.8 Mg C(-1) and US$35.1 Mg C(-1) and yearly payments of US$4.4 m(-3) and US$8.2 m(-3) due for each marginal cubic meter produced were computed for high and average sites, respectively. The estimated value of the tonne of carbon defines minimum values to be paid to forest owners, in order to induce a change in silvicultural management regimes. A reduction of carbon supply could be expected as a result of an increase in wood prices, although it would not respond in a regular manner. For both sites, price elasticity of supply was found to be inelastic and increased as rotation length moved further away from economically optimal: 0.24 and 0.27 for age 11 years in average- and high-productivity sites, respectively. This would be due to biomass production potential as a limiting factor; beyond a certain threshold value. an increase in price does not sustain a proportional change in carbon storage supply. The environmental service valuation model proposed might be adequate for assessing potential supply in plantation forestry, from a private landowner perspective, with an economic opportunity cost. The model is not applicable to low commercial value forest plantations. (C) 2009 Elsevier B.V. All rights reserved.

Do economists ‘compose’ economics? A comparison of the creative processes of artists and economists

This is a draft for a chapter of the book version of my Ph.D thesis. The chapter addresses the following question: Are the creative processes of musical composers and academic economists essentially the same, or are there significant differences? The paper finds that there are deep similarities between the creative processes of theoretical economists and the creative processes of artists. The chapter builds a process oriented lifecycle account of creative activity, drawing on testimonial material from the arts and the sciences, and relates the model to the creative work of economists developing economic theory.