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1242. The Epidemiology of Microeconomic Expectations
- Author:
- Christopher D. Carroll
- Publication Date:
- 12-2001
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Since the foundational work of Keynes (1936), macroeconomists have emphasized the importance of agents' expectations in determining macroeconomic outcomes. Yet in recent decades macroeconomists have devoted almost no effort to modeling actual empirical expectations data, instead assuming all agents' expectations are 'rational.' This paper takes up the challenge of modeling empirical household expectations data, and shows that a simple, standard model from epidemiology does a remarkably good job of explaining the deviations of household inflation and unemployment expectations from the 'rational expectations' benchmark. Furthermore, a microfoundations or 'agent-based' version of the model may be able to explain, in a way that still permits aggregation, stark rejections of the pure rational expectations framework like Souleles's (2002) finding that members of different demographic groups have sharply different predictions for macroeconomic aggregates like the inflation rate.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States and Latin America
1243. Complementarity and Social Networks
- Author:
- Yann Bramoulle
- Publication Date:
- 10-2001
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- I investigate complementarity games played on graphs, which model negative externalities embedded in structures of interaction. On the complete graph, the traditional economic analysis applies: the number of agents playing one strategy is proportional to its payoff. I show that, in general and contrary to coordination games, the structure crucially influences the equilibria. On an important class of graphs, called bipartite graphs, the equilibria do not depend on strategies' payoffs. On certain highly asymmetric graphs, an increase in the payoff of a strategy even decreases the number of agents playing this strategy. In most cases, equilibria do not maximize welfare.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States and Latin America
1244. Open Doors
- Author:
- Paul Masson, Michael Pomerleano, and Robert E Litan
- Publication Date:
- 06-2001
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- Foreign direct investment in financial firms in emerging markets surged in the 1990s, although not equally in all places. The main beneficiaries: Latin America and Central Europe, with Asia a distant third. This conference report summarizes findings on the impacts—mainly positive—of this significant inflow of funds and managerial and technical know-how, as well as recommendations for policies toward foreign direct investment (FDI) in the future. The main recommendation: countries with restrictions generally should relax them, even when their own financial systems are weak. At the same time, foreign entry gives rise to new policy challenges, supervisory and competitive, which emerging markets need to confront both unilaterally and with cooperation from source country governments.
- Topic:
- Emerging Markets, International Trade and Finance, and Third World
- Political Geography:
- Asia, Latin America, and Central Europe
1245. Report from Havana: Time for a Reality Check on U.S. Policy toward Cuba
- Author:
- Jonathan G. Clarke and William Ratliff
- Publication Date:
- 10-2001
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Official U.S. and Cuban depictions of the effects of the U.S. embargo differ notably from Cuban economic reality. This report, based on the authors' recent visits to Havana and interviews with top Cuban officials, dissidents, and other private citizens, shows that the embargo is not responsible for Cuba's poor economic condition—as Havana claims—nor has it been effective at achieving Washington's goal of isolating the Cuban regime.
- Topic:
- Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- United States, Cuba, Latin America, Caribbean, and Havana
1246. Rating Banks in Emerging Markets: What Credit Rating Agencies Should Learn From Financial Indicators
- Author:
- Liliana Rojas-Suarez
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The rating agencies' and bank supervisors' records of prompt identification of banking problems in emerging markets has not been satisfactory. This paper suggests that such deficiencies could be explained by the use of financial indicators that, while appropriate for industrial countries, do not work in emerging markets. Among the conclusions, this paper shows that the most commonly used indicator of banking problems in industrial countries, the capital-to-asset ratio, has performed poorly as an indicator of banking problems in Latin America and East Asia. This is because of (a) severe deficiencies in the accounting and regulatory framework and (b) lack of liquid markets for bank shares, subordinated debt and other bank liabilities and assets needed to validate the “real” worth of a bank as opposed to its accounting value.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- East Asia and Latin America
1247. Observing the 2002 Mexico Elections
- Author:
- Marcela Szymanski
- Publication Date:
- 03-2001
- Content Type:
- Working Paper
- Institution:
- The Carter Center
- Abstract:
- The Carter Center has a long history of engagement with Mexico with the shared goal of improving the electoral system in that country. In the early 1990s, the Center helped national observer groups to form and sent international observers to assist in domestic election monitoring. It also invited Mexicans to observe the U.S. elections in 1992. In 1994, the Center was among the first international observers to monitor elections in Mexico, and its observations helped shape electoral reforms that framed those and the 1997 elections, which the Center also observed.
- Topic:
- Democratization and Development
- Political Geography:
- Latin America and Mexico
1248. Observing Political Change in Venezuela: The Bolivarian Constitution and 2000 Elections
- Author:
- Laura Neuman and Jennifer McCoy
- Publication Date:
- 02-2001
- Content Type:
- Working Paper
- Institution:
- The Carter Center
- Abstract:
- Venezuela under President Hugo Chávez undertook a bold experiment to revamp its political system and address economic inequities and poverty. The country held seven votes in two years as voters chose Hugo Chávez to lead them in December 1998 and then supported his radical reform program, beginning with a new constitution. A Constitutional Assembly was elected in July 1999 to draft a new constitution, which voters approved in December 1999. Every elected position in the country was then presented to the voters again in a two-stage election in July and December 2000. While we do not believe that the election irregularities would have changed the 2000 presidential results, the significant politicization of the elections and organizational deficiencies contributed to a lack of confidence in the process and the nonpresidential results, thus leading us to characterize the July 2000 elections as flawed.
- Topic:
- Democratization and Development
- Political Geography:
- South America, Latin America, and Venezuela
1249. The Bush Administration and the Future of Transatlantic Relations
- Author:
- Peter Trubowitz
- Publication Date:
- 01-2001
- Content Type:
- Working Paper
- Institution:
- Centro de Investigación y Docencia Económicas
- Abstract:
- This paper, the first of a planned two-part analysis, examines the institutions of paramilitarism, death squads, and warlords in Latin America, with a focus on the case-studies of Mexico and Peru. It begins with an overview of the small comparative literature on paramilitary movements and death squads around the world, seeking to define and clarify the terminology. The literature on "warlordism" is then reviewed, and the similarities and distinctions between paramilitaries and warlords are considered. Lastly, I examine two case-studies that have not, as yet, received extended attention in the comparative literature: Mexico and Colombia. The paper concludes by summarizing the findings and charting a course for future investigations.
- Topic:
- International Relations, Foreign Policy, and Government
- Political Geography:
- United States, Colombia, Latin America, and Mexico
1250. A New Era in Mexico?
- Author:
- Mark Falcoff
- Publication Date:
- 02-2001
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Last July, Mexico underwent a medium-sized political earthquake—it elected Vicente Fox, candidate of an opposition alliance, to a six-year presidential term. In so doing, it ended seventy-one years of hegemonic rule by the Institutional Revolutionary Party (PRI) and unleashed a host of possibilities for the nation’s future. What are those possibilities, and what do they mean—for Mexico and the United States? The truth is that nobody—not even veteran Mexico-watchers—is quite sure. Fox himself is a man of paradox: His relationship with his own party is ambiguous, to say the least, and the platform on which he ran points both left and right, as do his cabinet appointments. Moreover, Mexico itself, long in the thrall of a kind of benevolent authoritarianism, is new to the art of divided government. While there may be some changes in the relationship with the United States, tensions and conflicts based on history, geography, and the vast asymmetries of wealth are bound to persist.
- Topic:
- Foreign Policy, Defense Policy, Politics, Authoritarianism, and Elections
- Political Geography:
- Latin America and Mexico
1251. An Emerging Populist Threat?
- Author:
- Mark Falcoff
- Publication Date:
- 06-2001
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- On May 14, Jackson Diehl, the deputy foreign editor of the Washington Post, raised an intriguing question in an op-ed for that newspaper: Is Latin America about to “drift back toward its one-time status as semi-hostile territory for the United States”? Some of the evidence he cited was certainly enough to give pause. In Nicaragua, Daniel Ortega, that country’s former Marxist president—voted out of office in 1990—seemed poised to finally regain power later this year. In Peru, Alan García, the leftist-populist windbag—the consummate Latin demagogue, almost a caricature of the type—who drove his country to the verge of collapse in the 1980s, has reemerged as a presidential possibility in a runoff scheduled for June 3. In Brazil, Luiz Inácio Lula da Silva, the perennial standard-bearer of the Left, is leading in the polls for next year’s presidential race. “Even in El Salvador,” Diehl writes, President Bush “may see the election of former FMLN guerrillas.” As to Venezuela, the machinations of its president, Hugo Chávez, hardly require comment; he makes no secret of the fact that his principal foreign policy objective is to forge a new, worldwide, anti-U.S. alliance.
- Topic:
- Foreign Policy, Economics, Populism, and Hugo Chavez
- Political Geography:
- South America, Latin America, and Venezuela
1252. Venezuela’s Tinfoil “Revolution”
- Author:
- Mark Falcoff
- Publication Date:
- 04-2001
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- After forty years of politics as usual, Venezuela has suddenly become an object of curiosity to the world’s press. The reason is President Hugo Chávez, a forty-six-year-old former lieutenant colonel who first came to the attention of Venezuelans in 1992 when he and a group of other junior officers attempted to overthrow the government of President Carlos Andrés Pérez. Amnestied by Pérez’s successor, Chávez began a political career of his own, and in 1998, running as the candidate of the so-called Fifth Republic Revolutionary Movement (MVR), he was elected by a decisive majority. Two and a half years later, he is still an enigma—to Venezuelans, to the United States, and to everyone else. Given the centrality of his country to the oil producers’ cartel and, even more, given the current dependence of the United States on Venezuelan oil, he merits a closer look.
- Topic:
- Foreign Policy, Defense Policy, Government, Natural Resources, and Hugo Chavez
- Political Geography:
- South America, Latin America, and Venezuela
1253. Peru: Yet Another Transition
- Author:
- Mark Falcoff
- Publication Date:
- 03-2001
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Last November Peruvian politics were turned upside down by the revelation that the president’s security chief had been bribing members of congress, other prominent political personalities, and the media. The “smoking gun” was a series of filmed videos actually recording the shady transactions, involving millions of dollars in one of Latin America’s poorest nations. Popular indignation was so great that the president, Alberto Fujimori, diverted a flight to the Asia-Pacific conference in Brunei and went to Tokyo instead, where he precipitously claimed Japanese citizenship and asked for political asylum. At home, one of the strongest political machines in Latin America was dismantled almost overnight. Congress deposed the president, named an interim chief executive and prime minister, and called for new elections on April 8. Thus ends an era in Peruvian politics, one rich in paradox and moral ambiguity. What, one wonders, is next?
- Topic:
- Foreign Policy, Defense Policy, Corruption, and Politics
- Political Geography:
- Latin America and Peru
1254. Latin Democracy and Its (Increasing) Discontents
- Author:
- Mark Falcoff
- Publication Date:
- 09-2001
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Though summer is still with us in the northern hemisphere, Latin America languishes deep in the winter of its discontent. Ten years after the international scene was transformed by the collapse of the Soviet Union and the end of the cold war, many Latin Americans have become disillusioned with their role in the new world order. The principal problem is that in spite of vigorous, in some cases drastic, market reforms, most of the region’s economies are in the doldrums. More to the point, in spite of a significant return of foreign investment to the area in the early 1990s, the number of Latin Americans living in poverty has increased. Public services have deteriorated or in some cases even disappeared. And crime is rampant everywhere, even in cities such as Buenos Aires, where until ten years ago inhabitants boasted-with reason-that their streets were safer at 3 a.m. than those of New York or Los Angeles in daytime.
- Topic:
- Foreign Policy, Defense Policy, Democracy, and Investment
- Political Geography:
- South America and Latin America
1255. Nicaragua on the Brink–of What?
- Author:
- Mark Falcoff
- Publication Date:
- 10-2001
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- On November 4, Nicaraguans will go to the polls to select a president, vice president, and all sixty-six members of their unicameral congress–an event that on its own merits would hardly deserve much attention on the part of foreign observers. But the drama unfolding in that tiny country is characteristic of many small (and not so small) Latin American countries today: the inability of democracy alone to address effectively some of the fundamental problems of society. Nicaragua also provides some interesting insight into the peculiar pathologies that afflict postrevolutionary states, and as such may provide some light on what we can expect in post-Castro Cuba and even, eventually, in post—Chávez Venezuela.
- Topic:
- Foreign Policy, Defense Policy, and Democracy
- Political Geography:
- Cuba, Latin America, and Nicaragua
1256. In Focus: Bolivia: Eradicating Democracy
- Author:
- George Ann Potter and Linda Farthing
- Publication Date:
- 10-2000
- Content Type:
- Policy Brief
- Institution:
- Foreign Policy In Focus
- Abstract:
- In September 2000, Bolivia, South America's poorest country, was rocked by a series of civilian protests, including roadblocks throughout the country. Unionists, teachers, peasant coca farmers, and others have demanded that the Bolivian and U.S. governments stop trying to completely eradicate coca growing and cease construction of three new military bases in the Chapare region. Among the other demands, protesters also want the government to improve alternative development programs in the coca growing region. In mid-October, the two sides reached a 19-point “truce”, but protesters vowed to reinstate the roadblocks in 30 days if the government did not adhere to the the agreement.
- Topic:
- Foreign Policy, Democratization, and Human Rights
- Political Geography:
- United States, South America, Latin America, and Bolivia
1257. In Focus: Peru: Democracy
- Author:
- Coletta A. Youngers
- Publication Date:
- 10-2000
- Content Type:
- Policy Brief
- Institution:
- Foreign Policy In Focus
- Abstract:
- Since taking office in 1990, President Fujimori has concentrated power in his own hands, greatly strengthened the role of the armed forces and SIN, and thwarted political opposition through bribery and intimidation. The recent Peruvian elections failed to meet even the most minimal international standards for a free and fair process, and Fujimori embarked upon an unconstitutional third term, which left the country deeply polarized. Fujimori's decision to call for new elections and dismantle SIN is an important step toward putting Peru back on the path to democratization; however, the situation remains very tense and the position of the military and intelligence services uncertain.
- Topic:
- Foreign Policy, Democratization, and Government
- Political Geography:
- United States, South America, Latin America, and Peru
1258. Foreign Policy In Focus: Colombia in Crisis
- Author:
- Carlos Salinas
- Publication Date:
- 03-2000
- Content Type:
- Policy Brief
- Institution:
- Foreign Policy In Focus
- Abstract:
- Violence and warfare in Colombia are often blamed on the drug trade, but the roots run much deeper. The overwhelming majority of victims are noncombatant civilians. Since 1987, more than 35,000 noncombatant civilians have been murdered or have “disappeared.” Despite rich natural resources, Colombia's wealth is unevenly distributed, with some sectors of the population in deep misery.
- Topic:
- Conflict Resolution, Foreign Policy, and Human Rights
- Political Geography:
- United States, Colombia, South America, and Latin America
1259. The Impact of an Indigenous Counterpublic Sphere on the Practice of Democracy: The Taller de Historia Oral Andina in Bolivia
- Author:
- Marcia Stephenson
- Publication Date:
- 09-2000
- Content Type:
- Working Paper
- Institution:
- Kellogg Institute for International Studies
- Abstract:
- This paper analyzes the impact of an indigenous counterpublic sphere in contemporary Bolivia. It argues that the elaboration of the indigenous counterpublic sphere as an arena of oppositional consciousness locates agency in indigenous peoples and challenges prevailing practices that would relegate them to the category of premodern Other. Examining specifically the work carried out by the Aymara nongovernmental organization known as the Taller de Historia Oral Andina [Andean Oral History Workshop], the essay underscores the significance of the indigenous counterpublic sphere in Bolivia not only as a discursive arena but also as an autonomous spatial or territorial arena where Andean cultural and political identities can be enacted and legitimated.
- Topic:
- Civil Society and Government
- Political Geography:
- South America, Latin America, and Bolivia
1260. Competitiveness and Environmental Policies: The Cases of Chile and Korea
- Author:
- Claudio Maggi and Kern Soo Yoon
- Publication Date:
- 03-2000
- Content Type:
- Working Paper
- Institution:
- Institute for Development and Peace
- Abstract:
- Competitiveness and sustainability share a common aim: to use resources more efficiently. In the long run, unsustainable production patterns may lead to the depletion or degradation of natural resources, and that means loss of future competitiveness.
- Topic:
- Environment and International Political Economy
- Political Geography:
- Israel, South America, Latin America, Korea, and Chile