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This paper highlights the amplifier mechanism that has the evolution of exchange rate on the credit cycle in an economy with high financial dollarization, one mechanism that has been called «the exchange rate accelerator». In this scenario, the natural procyclicality between the business cycle and credit cycle goes into the background, but perhaps not fade. The paper develops the theoretical framework underlying the transmission mechanism and shows some stylized facts of Peruvian credit system. The following presents an econometric model with panel data to estimate the effect of exchange rate accelerator on the evolution of credit default in the credit system institutions. From these empirical results, and under Basel II philosophy, the paper discusses how to implement, in banks and other credit institutions, prudential regulation that requires the allocation of provisions and capital for credit risk arising from exchange rate risk caused by foreign currency loans. The basic idea of these measures would help the system to internalize the externalities produced by this non-diversifiable risk factor. [ABSTRACT FROM AUTHOR]

This paper estimates the zero coupon yield curve for the Peruvian government bond market. We employ two methods of estimation proposed by Nelson y Siegel (1987) and Svensson (1994). Model performance is evaluated based on criteria of goodness of fit, flexibility and parameter stability, by using alternative objective functions for parameter estimation. The Svensson model shows on average a better adjustment; however, parameter estimates are more unstable when data availability is limited -for example when there is a small number of transactions in the secondary market- in which case is better to use the Nelson y Siegel estimates. At the end of the paper, yield curve estimates are used to derive market expectations of future short term interest rates, that are valuable sources of information for central bank's monetary policy. [ABSTRACT FROM AUTHOR]

Since its beginnings, and more clearly since the mid 1800, Economics has been resting on the assumption that economic agents make rational decisions, maximizing their utility or well-being according to their own preferences and interests. The economic order resulting from that plurality of rational decisions is regarded as an efficient and Pareto-optimum one. Several authors have questioned the validity of those assumptions, and this has entailed a gradual transformation of the assumptions. This paper discusses the problems faced by the idea of a fully rational Homo economicus, the adjustments and defensive measures adopted by various tendencies within Economics to overcome those problems and counter various related theoretical and methodological criticisms. The paper also discusses more recent conceptions of economic reality that are at variance with the traditional view, especially those linked to behavioural, institutional and evolutionary Economics. [ABSTRACT FROM AUTHOR]

This paper analyzes the experience of economic growth in Peru during the last five decades. It describes its principal characteristics, explains the changes along the period and predicts its future path. The methodological approach consists in a combination of accounting and econometric techniques, both based in comparisons between countries and periods of time. The study discovers that the most important turning points of the economic growth were caused by changes in the productivity of all inputs, instead of the simple accumulation of capital. Specifically, the paper finds out that the recover of the economic growth in Peru during the 1990's was caused by the process of structural reforms and stabilization and lasts until now. The future growth of the economy depends on the continuation and deepness of this process. [ABSTRACT FROM AUTHOR]

Using a straightforward and diverse methodology, this paper assesses and estimates the trade barriers impact on exports from the Peruvian economy. The results of the analysis indicate that Most Favored Nation (MFN) and Generalized System of Preferences (GSP) tariffs rates imposed by developed countries to Peruvian exports are relatively low and close to zero. Conversely, the number of Non-Tariff Barriers (NTB) and the average number of NTBs per export tariff line, specially the Technical Barriers to Trade (TBT), are relatively high. This difference produces a higher estimation of the export impact of the NTBs. An implication of these results is that the new wave of regional preferential trade agreements among developed and developing countries (which face similar trade barriers structure as the Peruvian case) may not have meaningful effects on trade flows unless it is accompanied by substantial reductions in the number of NTBs per export tariff line. [ABSTRACT FROM AUTHOR]

This paper deals with Viceroy Toledo's governing plan and the modern concepts of development. It is a review of Viceroy Toledo's plan genesis from 1568's Junta Magna, the Toledo's trip over the Andes and the final establishment of his two main economic policy pillars: the mita and the technological process --using mercury for extracting silver from the ore--. [ABSTRACT FROM AUTHOR]