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This article presents abstracts of several papers published in the February 1965 issue of the journal Bulletin of Economics and Statistics. In the paper Notes on Public Investment Criteria in the United Kingdom, P. D. Henderson discussed the problem of devising a reasonable set of criteria for appraising public investment projects in Great Britain. While in the article The Absorption of Manpower by the Urban and Rural sectors of Brazil, Raouf Kahil examined the available data concerning urban and rural populations in Brazil and argues that the basis of a valid judgment of the job opportunities offered by the urban and rural sectors were cannot be seen.

There is a wide variety in the capital account policies of emerging markets and developing economies. Some countries, such as Brazil, have recently experimented with prudential controls on capital inflows, whereas others, such as China, have continued to maintain tight controls. This paper reviews the recent theoretical literature explaining the motivations behind capital account policies, and whether there is a case for international coordination in this area. [ABSTRACT FROM AUTHOR]

This paper develops and estimates an equilibrium model where heterogeneous firms can exploit two margins of informality: (i) not register their business, the extensive margin; and (ii) hire workers “off the books,” the intensive margin. The model encompasses the main competing frameworks for understanding informality and provides a natural setting to infer their empirical relevance. The counterfactual analysis shows that once the intensive margin is accounted for, firm and labor informality need not move in the same direction as a result of policy changes. Lower informality can be, but is not necessarily associated with higher output, TFP, or welfare. (JEL D22, E26, H26, J46, O14, O17) [ABSTRACT FROM AUTHOR]

This paper studies the impact of a regional free trade agreement, MERCOSUR, on technology upgrading by Argentinean firms. To guide empirical work, I introduce technology choice in a model of trade with heterogeneous firms. The joint treatment of the technology and exporting choices shows that the increase in revenues produced by trade integration can induce exporters to upgrade technology. An empirical test of the model reveals that firms in industries facing higher reductions in Brazil's tariffs increase investment in technology faster. The effect of tariffs is highest in the upper-middle range of the firm-size distribution, as predicted by the model. (JEL F13, F15, O19, O24, O33). [ABSTRACT FROM AUTHOR]

In this paper, we explore the costs and benefits of hosting the Olympic Games. On the cost side, there are three major categories: general infrastructure such as transportation and housing to accommodate athletes and fans; specific sports infrastructure required for competition venues; and operational costs, including general administration as well as the opening and closing ceremony and security. Three major categories of benefits also exist: the short-run benefits of tourist spending during the Games; the long-run benefits or the 'Olympic legacy' which might include improvements in infrastructure and increased trade, foreign investment, or tourism after the Games; and intangible benefits such as the 'feel-good effect' or civic pride. Each of these costs and benefits will be addressed in turn, but the overwhelming conclusion is that in most cases the Olympics are a money-losing proposition for host cities; they result in positive net benefits only under very specific and unusual circumstances. Furthermore, the cost-benefit proposition is worse for cities in developing countries than for those in the industrialized world. In closing, we discuss why what looks like an increasingly poor investment decision on the part of cities still receives significant bidding interest and whether changes in the bidding process of the International Olympic Committee (IOC) will improve outcomes for potential hosts. [ABSTRACT FROM AUTHOR]

The article presents information about the book "Investment in Women's Human Capital," edited by T. Paul Schultz. The book focuses on the experience of high-income countries; labor markets, uncertainty and family behavior; and household structure and labor markets in Brazil.

Using a matched employer-employee data set, we study the effects of trade liberalization on wage dispersion in Brazil across heterogeneous worker groups, keeping in mind that the assignment of workers to firms may be non-random and determined by the time-invariant productivity of workers specific to the firms with which they are matched. We find differential effects of trade reform on residual wage inequality across worker groups. High education workers experience greater increases in wage dispersion relative to low education workers following trade liberalization. This finding is broadly consistent with the theoretical predictions that emerge from models with heterogeneous firms, heterogeneous workers, and labor market frictions. [ABSTRACT FROM AUTHOR]

We study the evolution of trade liberalization's effects on Brazilian local labor markets. Regions facing larger tariff cuts experienced prolonged declines in formal sector employment and earnings relative to other regions. The impact of tariff changes on regional earnings 20 years after liberalization was three times the effect after 10 years. These increasing effects on regional earnings are inconsistent with conventional spatial equilibrium models, which predict declining effects due to spatial arbitrage. We investigate potential mechanisms, finding empirical support for a mechanism involving imperfect interregional labor mobility and dynamics in labor demand, driven by slow capital adjustment and agglomeration economies. This mechanism gradually amplifies the effects of liberalization, explaining the slow adjustment path of regional earnings and quantitatively accounting for the magnitude of the long-run effects. (JEL F16, J23, J31, J61, O15, O19, R23) [ABSTRACT FROM AUTHOR]

The article focuses on a paper written by the authors in 1983 in which they argued that the exclusion of schooling quality from standard earnings function estimates may cause some important misinterpretations of the impact of years or quantity of schooling. As an empirical example this article provides estimates for Brazilian males aged 15 to 35. In his comment on the paper, economist Peter Eaton agrees with the possible importance of incorporating quality into the analysis, but criticizes primarily two dimensions of the empirical analysis: 1) calculation of the social rate of return for investments in the quantity of schooling; and 2) definition of experience. He also provides micro estimates from the Brazilian metropolitan area of Fortaleza that, in his view, seem to reinforce the amended implications of the analysis. This article discusses each of these components of Eaton's comment in turn. This article presents an estimate of the social rate of return to quantity of 6.8 percent as compared to the private rate of return to quantity of 11.7 percent and a social rate of return to quality of 10.4 percent.

The article focuses on beneficiaries of economic development. The author's 1977 paper had two purposes, one methodological and one empirical. The methodological goal was to apply in the case of a less-developed country a largely overlooked class of absolute measures which gauge directly the extent to which the poor gain from economic development. At the time the author wrote the paper that is in 1975, absolute poverty measures had seldom been used in a dynamic context in studies of developing countries, to measure who benefits how much from economic development within a country. The author shows that those who wish to give predominant weight to countries' progress toward alleviating economic misery might find absolute measures like changes in proportion of income units which are poor and changes in average income among the poor, more convenient than the more familiar measures of relative inequality. The empirical goal was to reexamine the specific case of Brazilian growth in the 1960's. Toward that end, the author's results established that the same income distribution data, when analyzed from an absolute rather than from a relative perspective, yielded a qualitatively distinct and decidedly more positive picture of who benefited.

We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes. [ABSTRACT FROM AUTHOR]

We study how political turnover in mayoral elections in Brazil affects public service provision by local governments. Exploiting a regression discontinuity design for close elections, we find that municipalities with a new party in office experience upheavals in the municipal bureaucracy: new personnel are appointed across multiple service sectors, and at both managerial and non-managerial levels. In education, the increase in the replacement rate of personnel in schools controlled by the municipal government is accompanied by test scores that are 0.05–0.08 standard deviations lower. In contrast, turnover of the mayor's party does not impact local (non-municipal) schools. These findings suggest that political turnover can adversely affect the quality of public services when the bureaucracy is not shielded from the political process. (JEL D72, D73, H75, H76, J45, O17) [ABSTRACT FROM AUTHOR]

This paper studies the effect of additional government revenues on political corruption and on the quality of politicians, both with theory and data. The theory is based on a political agency model with career concerns and endogenous entry of candidates. The data refer to Brazil, where federal transfers to municipal governments change exogenously at given population thresholds, allowing us to implement a regression discontinuity design. The empirical evidence shows that larger transfers increase observed corruption and reduce the average education of candidates for mayor. These and other more specific empirical results are in line with the predictions of the theory. (JEL D72, D73, H77, O17, O18) [ABSTRACT FROM AUTHOR]

A growing body of research examines the regional effects of trade liberalization using a weighted average of trade policy changes across industries. This paper develops a specific-factors model of regional economies that provides a theoretical foundation for this intuitively appealing empirical approach and also provides guidance on treatment of the nontraded sector. In the context of Brazil's early 1990s trade liberalization, I find that regions facing a 10 percentage point larger liberalization-induced price decline experienced a 4 percentage point larger wage decline. The results also confirm the empirical relevance of appropriately dealing with the nontraded sector. ( JEL F13, F16, O19, O24) [ABSTRACT FROM AUTHOR]

We show how changes in the volatility of the real interest rate at which small open emerging economies borrow have an important effect on variables like output, consumption, investment, and hours. We start by documenting the strong evidence of time-varying volatility in the real interest rates faced by four emerging economies: Argentina, Brazil, Ecuador, and Venezuela. We estimate a stochastic volatility process for real interest rates. Then, we feed this process in a standard small open economy business cycle model. We find that an increase in real interest rate volatility triggers a fall in output, consumption, investment, hours, and debt. (JEL E13, E20, E32, E43, F32, F43, 011) [ABSTRACT FROM AUTHOR]

We show that political institutions affect corruption levels. We use audit reports in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find significantly less corruption in municipalities where mayors can get reelected. Mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives. These effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punishment is lower. Overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician's corrupt behavior. (JEL D72, K42, O17) [ABSTRACT FROM AUTHOR]

Due to betrayal aversion, people take risks less willingly when the agent of uncertainty is another person rather than nature. Individuals in six countries (Brazil, China, Oman, Switzerland, Turkey, and the United States) confronted a binary-choice trust game or a risky decision offering the same payoffs and probabilities. Risk acceptance was calibrated by asking individuals their minimum acceptable probability (MAP) for securing the high payoff that would make them willing to accept the risky rather than the sure payoff. People's MAPs are generally higher when another person, rather than nature, determines the outcome. This indicates betrayal aversion. (JEL C72, D81, Z13) [ABSTRACT FROM AUTHOR]

We measure the effects of firm policies on racial pay differences in Brazil. Non-Whites are less likely to be hired by high-wage firms, explaining about 20 percent of the racial wage gap for both genders. Firm-specific pay premiums for non-Whites are also compressed relative to Whites, contributing another 5 percent for that gap. A counterfactual analysis reveals that about two-thirds of the underrepresentation of non-Whites at higher-wage firms is explained by race-neutral skill-based sorting. Non-skill-based sorting and differential wage setting are largest for college-educated workers, suggesting that the allocative costs of discriminatory hiring and pay policies may be relatively large in Brazil. (JEL J15, J24, J31, J41, J46, J71, O15) [ABSTRACT FROM AUTHOR]

The welfare effects of PTAs are most directly linked to changes in trade prices, i.e., the terms of trade. This paper employs a simple strategic pricing game in segmented markets to measure the effects of MERCOSUR on the pricing of “nonmember” exports to Brazil: As Brazil exempts its MERCOSUR partners from tariffs, the resulting competitive pressure leads other exporters to reduce their prices. Working with detailed data on unit values and tariffs we find that the creation of MERCOSUR was associated with significant declines in the prices of nonmembers' exports to the region. (JEL F13, F15). [ABSTRACT FROM AUTHOR]

We take stock of three decades of a love–hate relationship between Latin American policies and the Washington Consensus, reviewing its implementation, national debate, and outcomes. Using regional data and case studies of Brazil, Chile, and Mexico, we discuss the various degrees of the Washington Consensus implementation and evaluate performance. We find mixed results: macroeconomic stability is much improved, but economic growth has been heterogeneous and generally disappointing, despite improvement relative to the 1980s. We discuss the risk that the region could revert parts of the Washington Consensus reforms, which are necessary building blocks for a new agenda more focused on social integration, a fairer and just society, and environmentally sustainable growth based on better education. [ABSTRACT FROM AUTHOR]

We study the spending profile of workers who experience both a positive transitory income shock (lump-sum severance pay) and a negative permanent income shock (layoff). Using de-identified expenditure and employment data from Brazil, we show that workers increase spending at layoff by 35 percent despite experiencing a 14 percent long-term loss. We find high sensitivity of spending to cash-on-hand across consumption categories and for several sources of variation, including predictable income drops. A model with present-biased workers can rationalize our findings, and highlights the importance of the timing of benefit disbursement for the consumption-smoothing gains of job displacement insurance policies. (JEL D12, G51, J65, J63, O12) [ABSTRACT FROM AUTHOR]

On February 28, 1986, with inflation at 400 percent per year, Brazil embarked on her second major stabilization effort in twenty-five years. This paper highlights the institutional features of inflation and contrasts the two stabilization efforts. The interaction of supply shocks and indexation are the main elements in generating acceleration of inflation in Brazil. The two stabilization episodes demonstrate that an incomes policy is an essential ingredient to nonrecessionary stabilization. They also show that demand restraint is inevitable if disinflation is to be viable. The two Brazilian stabilization programs teach a number of lessons. First, incomes policy is a valuable means in achieving disinflation. It helps avoid dramatic unemployment. Finally, following disinflation, real interest rates turn sharply positive unless the government engages in a significant monetization. A final point concerns the budget. The possibility of financing a small deficit in a noninflationary manner depends on the growth rate of output, the prospective path of real tax revenues, and the real rate of interest.

This article studies the short-run relationship between output and inflation in the context of a macroeconomic model. In general the estimates for Argentina are more precise than the estimates obtained for Brazil. In both countries better fits were obtained for the rate of change in prices than for detrended income. The good performance of the model in explaining the rate of inflation can be illustrated by plotting the actual and fitted values from the reduced form for prices. One of the figures shown in the article describes the case for Argentina. Here it is observed that the model behaves well in explaining inflation, and only in two observations--one near the beginning and one near the end of the period--does the observed rate of inflation differ substantially from the fitted value. Although the results seem to be good relative to many other empirical studies working with highly noisy seasonally adjusted quarterly series, the authors' still are not sure that they have really separated the true signal from the noise. That is, in explaining the movements of output apart from its long run trend the authors say that they have only used monetary shocks that impeded a correct anticipation of prices, and in this sense people were surprised during short periods of time.

This article examines the distributional impact of Brazilian economic growth during the 1960's. The author shows that the poor in Brazil did participate in the rapid economic growth of the decade. Estimates presented below indicate that average real incomes among families defined as poor by Brazilian standards increased by as much as 60 percent while the comparable figure for non-poor families is around 25 percent. However, since non-poor families receive incomes, which are much greater than those of poor families, the bulk of the growth of national income over the decade was received by families whose incomes placed them above the official poverty standard. Thus, it would be incorrect to say either that, firstly in achieving a high rate of economic growth in Brazil the rich got absolutely richer while the poor got absolutely poorer, or secondly the incomes of poor families increased more slowly than those of non-poor families. In assessing the distributional consequences of Brazilian economic growth, this study explicitly adopts an absolute poverty approach.

This article analyzes some aspects of the industrialization policies followed by the Brazilian government in the post-World War II period. This article concentrates on the effects upon the structure of the economy, the rate of growth, and the performance of the principal new industries. Brazil's industrialization should be viewed against a background of declining earnings of its traditional exports, which consist principally of coffee, cocoa, sugar, and cotton. From the long-term trends in world trade, it would seem that these commodities are not among those which have a bright future. Further evidence of the dim outlook for the exports of primary producing countries and their continued reliance on specialization in those goods has recently been shown by the United Nations World Economic Survey, 1962. Although Brazil came out of the second World War with substantial amounts of foreign exchange reserves, these vanished within one year in an import spurt, a large proportion of which consisted of consumer goods.

This article provides information about the book "Fiscal Decentralisation in Emerging Economies: Governance Issues," edited by Kuchiro Fukasaku and Lutz R. De Mello. Twelve papers, presented at an international conference held in Brasilia, Brazil in June 1997, organized by the OECD Development Center and the Ministry of Finance of Brazil, explore issues of fiscal decentralization, public finance, and intergovernmental fiscal relations as they relate to the experiences of some emerging economies in Latin America and Asia. Papers focus on the changing role of the state in the economy; fiscal federalism and macroeconomic governance; decentralization and macroeconomic management; fiscal federalism in OECD member countries; difficulties and challenges in strengthening municipal financing in Latin America; experiences of decentralization and intergovernmental fiscal relations in Latin America; decentralization, intergovernmental fiscal relations, and macroeconomic governance in the case of Argentina; fiscal federalism and macroeconomic stability in Brazil; conditional transfers to promote local government participation in the case of Mexico; Asian perspectives on fiscal decentralization and macro-economic governance and fiscal federalism in India.

The article presents information on the book "The New Fiscal Federalism in Brazil," by Anwar Shah. The book examines the existing state of fiscal federalism in Brazil and suggests directions for change. Reviews the tax and expenditure assignment issues, federal transfers to states and municipalities, and state transfers to municipalities.

Reviews the journal "Planejamento e Politicas Publicas," published by the Instituto de Pesquisa Economica Aplicada, Brazil.

We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor-bias of technical change. We test the predictions of the model by studying the introduction of genetically engineered soybean seeds in Brazil, which had heterogeneous effects on agricultural productivity across areas with different soil and weather characteristics. We find that technical change in soy production was strongly labor-saving and led to industrial growth, as predicted by the model. (JEL J43, O13, O14, O33, Q15, Q16) [ABSTRACT FROM AUTHOR]

We develop an equilibrium wage-posting model with heterogeneous firms that decide to locate in the formal or the informal sector and workers who search randomly on and off the job. We estimate the model on Brazilian labor force survey data. In equilibrium, firms of equal productivity locate in different sectors, a fact observed in the data. Wages are characterized by compensating differentials. We show that tightening enforcement does not increase unemployment and increases wages, total output, and welfare by enabling better allocation of workers to higher productivity jobs and improving competition in the formal labor market. (JEL E26, J24, J31, J46, O15, O17) [ABSTRACT FROM AUTHOR]

The article provides information on the book "How Latin America Fell Behind: Essays on the Economic Histories of Brazil and Mexico, 1800-1914," edited by Stephen Haber. The book consists nine essays, which applies the methods of new economic history to Brazil and Mexico in order to illuminate the causes of the nineteenth century lag in Latin American economic development. Nathaniel H. Leff discusses economic development in Brazil, 1822-1913. Enrique Cárdenas provides a economic interpretation of nineteenth-century Mexico. William Summerhill considers transport improvements and economic growth in Brazil and Mexico. Carlos Marichal examines obstacles to the development of capital markets in nineteenth-century Mexico. Stephen Haber presents a comparative study of governmental regulation, financial innovation, and industrial structure in Brazil and Mexico, 1840-1930. Margaret Chowning reassesses the prospects for profit in Mexican agriculture in Michoacán, 1810-60.

The article presents information about the book "The Brazilian Voter: Mass Politics in Democratic Transition: 1974-1986," by Kurt von Mettenheim. The article also presents a brief sketch of the author. The book studies various aspects of Brazilian voters in democratic transition during the 1970s and 1980s. The book explores on the survey data from 1974 to 1982 to examine Brazilian opinion and voter alignment in the era of transition to democracy, focusing on the development of partisan affinity, the impact of issue positions and perceptions of government performance.

The article evaluates the periodical "Revisita de Econometria," published by Sociedade Brasileira de Econometria. Some of the topics discussed in the April 1993 issue include: econometrics and mathematical methods and applied statistics for the analysis of economic problems; cyclical component in Brazilian gross domestic product; extension of the restricted principal component analysis to a stochastic framework; aggregate measures of poverty in Brazil and an introduction to the theory of rational expectations.

This article applies Lance Girton and Don Roper's (G-R) monetary model of exchange market pressure to the postwar monetary experience in Brazil. In the immediate postwar period from 1947 to 1953, rigid exchange controls were in effect in Brazil. this was followed by an exchange auction system from October 1953 to March 1961, which was characterized by an official exchange rate depending upon the category of transaction involved, an exchange tax, and an auction certificate premium, which amounted to a system of multiple exchange rates. In March 1961 a single rate was introduced and has stayed in effect. Postwar Brazil provides an excellent example of an exchange market in which for over two decades exchange market pressure has been alleviated by a combination of reserve changes and exchange depreciation. The simple monetary model of exchange rate pressure tested performs fairly well in the 1955 to 1975 period and very well during 1962 to 1975, in explaining movements of reserves and the exchange rate. Its poorer performance in the early period up to 1961 resulted in part from greater exchange restrictions that were eased in March of that year. The purchasing power parity relationship also holds up well, particularly after 1961.

The article analyzes the impact of primary commodity fluctuations on economic development. An essential aspect in this type of work is to provide more than a broad aggregative link between the world commodity market and the country's economy. In the context of the country macro model, the specific commodity producing sector must be broken out and the linkages to the other sectors of the economy must be represented in the model structure. The potential for domestic policy response is another complicating element. There are probably few cases where a producing country can greatly influence the world commodity market with unilateral policy actions--the case of Brazil and coffee is said to be such a case. But in the domestic economy policy intervention may be the rule rather than the exception, so that domestic policy such as export taxes, neutralization of foreign exchange earnings and trade restrictions may be used to offset commodity market fluctuations. The principal impacts of the coffee sector on the macro economy of Brazil can be summarized as follows: (1) production-income link; (2) production-income link; (3) production-employment and input linkages; (4) export value balance-of-payments effect; (5) tax revenue; (6) monetary effects; (7) consumption effects; (8) investment effects.

This article is limited to the study of the structure of trade conducted between a semi-industrialized country and a group of countries possessing an advanced industrial base. To analyze the commodity composition of trade between a semi-industrialized country, like Brazil, that has a relatively small and unsophisticated manufacturing sector and the industrialized countries of Western Europe and North America, the neo-factor proportions theory is evoked. The factor proportions account views trade patterns as the outcome of the interaction between the production characteristics of commodities and the countries' relative availability of these factors.

The war brought many problems to Brazil. It brought also a great deal of industrial progress as traditional sources of supply were eliminated and as incomes and effective demand rose. Postwar adjustments are called for and are proving difficult to make. The cost of living is too high and the monetary unit is overvalued. Price control measures have been at best only partially effective. The year 1947 brought at least a beginning of necessary readjustments. The trend in the cost of living is tapering off and some prices have softened. Nevertheless, there would appear to be no immediate prospect of a sharp deflation or break in industrial activity, in spite of some troubles in the textile industry. Real trouble will not come until or unless the staple exports--coffee and cotton--begin to suffer. After some uncertainty in this area, the international markets for these items appear to be quite firm. The welfare of the nation is irrevocably bound up with continued high incomes in the rest of the world, particularly the United States, which is now both the largest seller to and buyer from Brazil. The Brazilian balance of payments is all-important, the export surplus performing the role customarily reserved to investment in more advanced countries. Fiscal policy is inextricably tied to this factor, even the volume of money in circulation being generally a function of it. The Brazilian's international interest, therefore, is in expanding trade at high incomes; with a continuance of such a situation, exchange stability (following the initial adjustment) will follow as a matter of course. Without it, exchange stability will be almost impossible to retain. In a very real sense, the Brazilian has a personal interest in the adoption of wise and sound economic policies in Washington and London. [ABSTRACT FROM AUTHOR]