Argentina's capital gap puzzle
Argentinas GDP per working age person in 2003 was about the same as it was twenty years earlier and around fifteen percent below trend. By international standards that has been a dismal performance whose ultimate sources are important to uncover to eventually reverse that countrys seemingly secular decline. The purpose of this paper is precisely to take a first step towards that understanding. To that effect, we examine Argentinas recent growth experience, which includes two deep recessions and a recovery, with the lens of a neoclassical growth model that takes total factor productivity as exogenous.
AUTHORS: Kydland, Finn E.; Zarazaga, Carlos E.
Are labor markets segmented in Argentina? a semiparametric approach
A large part of the theoretical literature on informal economic activities in developing nations is founded on the assumption that labor markets are segmented. In this paper, we evaluate this premise with data from Argentina's permanent household survey for the 1993-1995 time period. We consider various definitions of informality based on the benefits mandated by Argentina's labor laws. We find that average wages are significantly higher in the formal sector than in the informal sector. We proceed to use a matching estimator to correct for the possible endogeneity of employment outcomes. The wage premium becomes much smaller when one controls for individual characteristics such as age, education and gender, and establishment characteristics, notably size. We then make use to the panel structure of our data to compute a difference-indifference estimate of the formal wage premium. This estimate does not significantly differ from zero, suggesting that unobserved ability accounts for the remaining wage differences across sectors. We conclude that the assumption that labor markets are competitive in Argentina cannot be rejected. The paper also provides a list of facts with which a satisfactory theory of informality for Latin America should be consistent. ; Economic Research Working Paper 0110
AUTHORS: Quintin, Erwan; Pratap, Sangeeta
Global banks, local crises: bad news from Argentina
Banking crises have been a recurrent phenomenon in Latin America over the past few decades. Some have argued that the internationalization of the banking sector has ushered in a new era: what used to be systemic risk from the perspective of local banks with undiversified portfolios might no longer be systemic from the standpoint of large international banks. ; Argentina's experience shows that the presence of international banks was not enough to prevent local banking crises and sizable losses to depositors. The "bad news" from Argentina, this article argues, is that depositors in emerging markets may not reap the full benefits of international portfolio diversification because international banks have limited liability, at least under some circumstances-for instance, when the local government heavily intervenes in the banking system. The authors emphasize that while the limited-liability feature of international banks may seem bad ex post-and, of course, it is from the perspective of Argentine depositors-this feature may well be desirable, perhaps even necessary, ex ante. ; The article first presents evidence of the globalization of the banking sector in Latin America and the dramatic increase of the phenomenon in the late nineties. After reviewing the literature on the pros and cons of international banks in emerging markets, the authors focus on the legal issues behind the limited-liability feature. The authors examine the new evidence that Argentina's recent experiences provide and conclude by analyzing the pros and cons of the limited-liability feature.
AUTHORS: Del Negro, Marco; Kay, Stephen J.
Argentina: the end of convertibility
AUTHORS: Quispe-Agnoli, Myriam; Kay, Stephen J.
A hefty price for Argentina's sluggish recovery
AUTHORS: Holman, Julia
Argentina's outlook improves with economic reforms
AUTHORS: Chriszt, Michael J.
Latin America Research Group brief: After Argentina
Export market diversification and productivity improvements: theory and evidence from Argentinean firms
This paper examines the relationship between trade and investment in technology adoption when firms face demand uncertainty. Our model predicts that, for a given overall market size, exporting to several countries reduces firms' demand uncertainty and, hence, raises incentives to invest in productivity improvements. The effects of diversification are heterogeneous across firms: An additional foreign market matters more for firms exporting to fewer destinations. We test the proposed theory using a large sample of Argentinean manufacturing exporters. The predictions of the model find strong support in the data.
AUTHORS: Juvenal, Luciana; Monteiro, Paulo Santos
Economic growth in Argentina in the period 1900-30: some evidence from stock returns
This paper reports the first stage of a project to recover Argentine stock market data for the entire 20th century. The authors find that real rates of return on Argentine stocks and bonds after 1920 were above those in the Belle poque, and that they were consistent with the view that in the postwar period Argentina remained firmly integrated with international financial markets.
AUTHORS: Zarazaga, Carlos E.; Nakamura, Leonard I.
Revenues from the inflation tax and the Laffer curve: some preliminary empirical findings for Argentina and Israel
AUTHORS: Zarazaga, Carlos E.