Academic Papers

Objective: To examine the impact of El Salvador’s unprecedented mass incarceration policy on crime. Methods: The identification strategy of this paper exploits the launch of the incarceration policy in El Salvador, which increased the country’s prison population by 150% in just…

The global resurgence of industrial policy has revived the appeal of downstream diversification (beneficiation) – adding value to raw materials – as a development strategy. Despite this intuitive appeal, empirical evidence of its effectiveness remains scarce, with few real-world…

In this study, we propose a different approach, and argue that placespecific characteristics condition the choices and behaviors of in dividuals living in Chiapas and explain persisting wage gaps. Most importantly, place-specific characteristics limit firm-level investments in…

This case study presents a dilemma situation on how to determine the discount rate for cash flows in places where the country risk perceived by investors differs considerably from the country’s sovereign debt premiums. Specifically, we present the case of TELMEX, the Mexican…

The literature on wage gaps between Chiapas and the rest of Mexico revolves around individual factors, such as education and ethnicity. Yet, twenty years after the Zapatista rebellion, the schooling gap between Chiapas and the other Mexican entities has shrunk while the wage gap…

The literature on Dutch disease is extensive when it comes to documenting the negative impacts of natural resource exports on nonresource tradable goods as an aggregate (e.g., Corden and Neary, 1982; Corden, 1984; Sachs and Warner, 1995 ). 1 Little has been said on the impact of…

—Winston Churchill Where shall we start when it comes to describing the Venezuelan tragedy? I sat for a long while staring at the white page on my screen. After all, there is a limit to what you can convey by means of sheer words. Do we start by saying that Venezuela is on the…

I come from a family of immigrants. My father was born in rural Galicia, Spain, in 1933; he spent most of his childhood and adolescent years under an iron-fist dictatorship, a country marred by economic hardship in the aftermath of a bloody civil war.

There is no constitutional cure to the country’s descent into economic chaos. Even if Maduro succeeded in convening a Constitutional Assembly and installed himself as absolute ruler, his inability to fix the economy would keep his hold onto power tenuous at best. A Maduro…

This case presents a dilemma situation on how to determine the discount rate for cash flow in places where the country risk perceived by investors differs considerably from the nation’s sovereign bonds’ yield spreads.

Economists have long discussed the negative effect of Dutch disease episodes on the non-resource tradable sector as a whole, but little has been said on its impact on the composition of the non-resource export sector. This paper fills this gap by exploring to what extent…

1. Introduction This article examines the microeconomic determinants of the price (per square meter) of housing in Caracas, Venezuela. By doing so, it builds a framework of reference for investors who can use it to determine the price of a property based on its attributes; for…

ALTHOUGH IT IS too soon to assess late Venezuelan President Hugo Chavez’s political legacy, we argue that taking an economic perspective allows for three important conclusions to emerge: (1) his rise to power can be largely explained by the abysmal economic performance of his…

Venezuela has an oil-dependent economy subject to large exogenous shocks and a rigid labor market. These features go straight to the heart of two weaknesses of real business cycle (RBC) theory widely reported in the literature: neither shocks are volatile enough nor real…

Recent work suggests a connection between domestic debt and external default. We examine potential linkages for Venezuela, where the evidence reveals a nexus among domestic debt, financial repression, and external vulnerability. The financial repression tax (as a share of GDP)…

The theory of business cycles studies the causes leading to and consequences resulting from recurrent expansions and contractions in aggregate economic activity. The idea that a few equations can have the power to replicate means, volatilities, relative volatilities,…