Search Results
Journal Article
The nominal facts and the October 1979 policy change
Working Paper
Argentina's recovery and \"excess\" capital shallowing of the 1990s
The paper examines Argentina?s economic expansion in the 1990s through the lens of a parsimonious neoclassical growth model. The main finding is that investment remained considerably weaker than what the model would have predicted. The resulting excessive ?capital shallowing? could be identified as a weakness of the rapid economic growth of the 1990s that may have played a role in Argentina?s ultimate inability to escape the crisis that started to unfold towards the end of that decade.
Working Paper
Argentina’s “Missing Capital” Puzzle and Limited Commitment Constraints
Capital accumulation in Argentina was slow in the 1990s, despite high total factor productivity (TFP) growth and low international interest rates. A possible explanation for the ?missing capital? is that foreign investors were reluctant to take advantage of the high returns to investment seemingly offered by that small open economy under such favorable conditions, on the grounds that previous historical developments had led them to perceive Argentina as a country prone to external debt ?opportunistic defaults.? The paper examines this conjecture from the perspective of an optimal contract ...
Journal Article
Price-level uncertainty and inflation targeting
In this paper, Dittmar, Gavin and Kydland make two points about commonly proposed rules for inflation targeting. First, they argue that there is a great deal of uncertainty about the price level and inflation inherent in current proposals to target inflation. They show that the degree to which the central bank cares about the real economy can have a large impact on price level (and inflation) uncertainty. They find that the magnitudes of uncertainty that prevailed across the G-10 throughout the last four decades are the expected consequence of commonly proposed inflation-targeting regimes. ...
Working Paper
Home production meets time-to-build
An innovation in this paper is to introduce a time-to-build technology for the production of market capital into a model with home production. The paper?s main finding is that the two anomalies that have plagued all household production models?the positive correlation between business and household investment, and household investment leading business investment over the business cycle?are resolved when time-to-build is added.
Journal Article
Cyclical movements of the labor input and its implicit real wage
An examination of whether a different specification for labor input and real wages leads to a reconsideration of labor force volatility during business cycles.
Working Paper
The gold standard as a rule
In this paper, we show that the monetary rule followed by a number of key countries before 1914 represented a commitment technology preventing the monetary authorities from changing planned future policy. The experiences of these major countries suggest that the gold standard was intended as a contingent rule. By that, we mean that the authorities could temporarily abandon the fixed price of gold during a wartime emergency on the understanding that convertibility at the original price of gold would be restored when the emergency passed.
Journal Article
Is the business cycle of Argentina "different?"
Despite the relative success of Real Business Cycle (RBC) models to replicate key moments of the business cycles of the United States and several European countries, economic research in Latin America tends to take the more traditional view that monetary factors play a predominant role in the economic fluctuations of countries in that part of the world. The different theoretical approach is often justified on the grounds that business cycles in Latin America are "different." However, few comparative studies have analyzed the relevant difference between the business cycles of Latin America ...
Discussion Paper
Dynamics of the trade balance and the terms of trade: the J-curve revisited
We provide a new interpretation of the statistical relation between the trade balance and the terms of trade. This relation includes the J-curve, the tendency for trade balances to be negatively correlated with contemporaneous movements in the terms of trade, positively correlated with lagged movements. We document this property in international data and show that it arises, as well, in a two-country stochastic growth model. In the model trade dynamics result, in large part, from fluctuations in investment. A favorable productivity shock in the domestic economy leads to an increase in ...
Conference Paper
Macroeconomic implications