JEL Code F: International Economics - 2006

Título Author Date Source Abstract
Trade Openness and Wage Distribution in Chile. Borghi, E. 2006 CESPRI Working Paper N°173, Centre for Research on Innovation and Internationalisation, Universita’ Bocconi.

This article analyses the effect of trade openness, implemented in Chile after 1974, on wage inequality. In the first part, this study analyses inequality and wage distribution in Chile. Workers are grouped in three categories, according to the educational level reached, in order to discriminate between skilled and unskilled labor and calculate the wage gap. The wage gap between workers with a university degree and laborers that completed the secondary school increased during the period analyzed. The wage gap between workers with secondary education completed and laborers that completed the first cycle of education decreased in the period. The second part of this article investigates the relationship between wage inequality dynamics of different groups of workers and trade openness. The empirical results suggest that trade liberalization increased wage differences between workers with a university degree and workers with a high school degree, while it did not affect the decreasing wage gap between laborers with secondary school completed and laborers with primary school completed.
Fear of Sudden Stops: Lessons from Australia and Chile. Caballero R., K. Cowan y J. Kearns 2005 The Journal of Policy Reform 8(4): 313-54.

Latin American economies are exposed to substantial external vulnerability. Domestic imbalances and terms of trade shocks are often exacerbated by sharp shifts in the net supply of external capital (sudden stops). At times, these suddenstops can be the main shock. In this paper we explore ways of overcoming external vulnerability, drawing lessons from a detailed comparison of the response of Chile and Australia to recent external shocks and from Australia’s historical experience. We argue that in order to understand sudden stops and the mechanisms to smooth them it is useful to identify and then distinguish between two inter-related dimensions of investor’s confidence: country-trust and currency-trust. Lack of countrytrust is the fundamental problem behind sudden stops. Lack of currency-trust in turn weakens a country’s ability to deal with sudden stops and real external shocks. We discuss steps to improve along these two dimensions of investors’ confidence in the medium run, and policies to reduce the impact of country-trust and currency-trust weaknesses in the short run.
Análisis del Tipo de Cambio Real: Chile 1986-1999. Cerda, R., A. Donoso y A. Lema 2005 Cuadernos de Econom&icute;a 42, N°126: 329-56.

Este trabajo incorpora fundamentos tanto de oferta como de demanda en la determinación de largo plazo del TCR. En nuestras estimaciones se confirma la influencia negativa de la relación gasto-producto y de los t&ecute;rminos del intercambio, pero, además, se encuentra evidencia robusta de la presencia del efecto Balassa- Samuelson. En contraste, se descarta la existencia de un impacto negativo del gasto público sobre el TCR, añadidura al recogido en el efecto Salter-Swan. Se encuentra que el efecto de esta última variable difiere según la composición sectorial de la producción (tamaño relativo del sector transable) y niveles de desempleo.
Capital Controls: An Evaluation Magud, N. y C.M. Reinhart 2006 NBER Working Paper N°11973

The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is not unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a “success” and (iv) the empirical studies lack a common methodology -- furthermore these are significantly “overweighted” by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to “standardize” the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies only in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia.