Anyway, one should be cautious at the time of giving a categorical verdict on the link between fiscal costs and the realeffectsof a crisis. First of all, saying that the government measures are unable to diminish the social costs of the crisis is not the same as proving that such social costs would have been lower without any public action whatsoever. Markets do not work properly whenever uncertainty, panic, and pessimism takes over the private sector decision-making process, and so the fact that the government is willing to intervene might encourage more optimistic expectations and ameliorate the typical coordination problems among pr ivate agents. This would require counterfactual evidence showing that crisis countries with totally passive governments perform better, everything else equal, than those with active anti-crisis policies., but it is difficult to find cases in which the government was fully prescident. 21 A related historical episode is the Great Depression in the U.S. beginning in the late 1920s, where the Federal Reserve was blamed of the crisis depth because it refused to inject enough liquidity to the system, but even this case remains controversial. In any event, from Honohan and Klingebiel’s database, it is observed that the only countries not pursuing massive rescue packages (over a total of 40 cases) were Argentina 1995, Phillipines 1998-present, and Turkey
The difference in stress transmission to LAC-6 countries, both in tranquil times and crises pe- riods, has an interesting implication, as it highlights the importance of deeper financial markets in absorbing foreign shocks. For instance, due to the geographical proximity and high commercial in- tegration (among other aspects) between the United States and Mexico, one might expect the latter to be more affected by financial shocks in the former than the other LAC-6 countries. However, this is not the case. According to the results, the stress transmission coefficients were larger with Colombia and Chile. Mexico’s lower sensibility to shocks in the United States can be understood when considering that it has deeper financial markets than the rest ofLatinAmerica.
An appealing feature of the subprime crisis for research purposes is that it stands as a purely exogenous shock on the corporate sector, and even more so for LatinAmerica – after all, the crisis had its origin in the U.S. housing sector. In inquiring about the influence of financing factors on real investments, it is extremely difficult to disentangle supply and demand forces. For instance, a given observed contraction inreal assets may be forced by the withdrawal of lending flows by their suppliers or to a voluntary corporate decision to stay aside from the credit market after the reevaluation of expected cash flows in the midst of an economic downturn. Even an exogenous credit supply shock like the one taking place since 2007-2008 may have reshaped the demand for funds in response to a widespread wave of pessimism. Notwithstanding, we can exploit the fact that the pre-crisis debt maturity structure is independent of the largely unforeseen subsequent tightening of credit conditions. In such circumstances, firms with an ex-ante large portion of short-term debt relative to long-term debt, unable to roll-over their credit lines, should have been forced to reduce real assets by a larger amount (or to pay a higher interest rate) than otherwise similar firms but less exposed to short-term debt. Using a matching estimator, we should be able to identify the effect of the credit supply shock on corporate investment.
Even if the ECB had performed from the beginning of the crises as a credible lender of last resort for governments and the negative feedback mechanisms had been consequently neutralized, the GIPSI countries would be anyway trapped in contexts of debt deflation and low international competitiveness. Has the experience of the emerging market economies something to teach us in this regard? As was already mentioned, all emerging market economies crises ended up in devaluations, and so, a more depreciated real exchange rate was the general condition for the following recovery processes. But devaluation was not a sufficient condition. For instance, the LatinAmericacrisesof the early 1980s were followed by big devaluations and a number of rounds of foreign debts restructurings. But none of the debt restructurings in the 1980s included substantial alleviation of the debt burdens. As a consequence, the biggest countries in the region experienced about eight years of stagnation, high inflation and hyperinflation: the stabilization and the recovery of growth were inconsistent with the fulfillment of the debt obligations. In other more successful crisis resolutions (for instance, Mexico in 1995 and the East Asian countries in 1998) the debts restructurings did not include significant haircuts, but were facilitated by massive international rescue packages led by the IMF. Almost in all cases the resolution of the crisesin the emerging market economies comprised the bail out and deep restructuring of the domestic financial systems, which included the refinancing of private debts in favorable terms (subsidized with fiscal resources) and involved significant fiscal costs.
The empirical definition of entrepreneurship is in itself a debatable issue. The literature has used two basic approaches: self employment and business ownership with employees. In this paper, we follow the second approach since the self employed inLatinAmerica are for the most part necessity entrepreneurs (see Bukstein and Gandelman 2014 for Uruguay). Necessity entrepreneurs tend to have less human capital and less financial capital (Ardagna and Lusardi 2008, Caliendo and Kritikos 2009), their business are less likely to growth (Shane 2009) and have lower investment rates (Evans and Jovanovic 1989, Santarelli and Vivarelli 2007). With our definition we also follow EUROSTAT-OECD definition of entrepreneurs as “those persons (business owners) who seek to generate value through the creation or expansion of economic activity, by identifying and exploiting new products, process or markets”. In our operational definition the added restriction of employing at least one person drops the self employed.
In Minsky’s model, crises are always preceded by a period of economic and financial boom. During the booming phase, there are widespread optimistic expectations about the future. Confidence increases and risk perception reduces. In this environment, agents take risky positions and the system becomes increasingly fragile. At some point, some event calls agents’ attention about the high degree of exposure to risk in the system. A phase of distress begins. The emerging perception of higher risk makes most agents switch their portfolios in favor of safer and liquid assets. The excess demand for liquidity and low-risk assets ends up pricking the bubble, which results in a massive loss of wealth. In this contractive phase, pessimistic expectations are dominant. Negative feedback effects are the rule in the contractive process, just as positive ones prevailed during the booming phase. The deflationary developments in the financial markets turn most agents either liquidity-constrained or bankrupt, affecting in either case their spending decisions negatively. Private consumption falls and investment collapses. What started as a contraction in the financial sector has now spread out to the whole economy. The financial crisis leads to a systemic economic crisis.
The findings reported for the companies listed in China with regard to the change in accounting quality with the obligatory enforcement of IFRS suggest different results. Zhang, Uchida and Bu (2013) carried out a study between the years of 2001 to 2010 using the model by Kothari et al. (2005); these authors indicate a significant increase in the level of earnings management, while Ho, Liao and Taylor (2015) suggest the opposite, a lower probability in the use of discretionary accruals (lower level of earnings management) when using the model proposed by Dechow et al. (1995) between the years of 2002 and 2011. Once again, there is evidence of the diversity in the results concerning the enforcement of IFRS for other oriental economies. For example, for the companies in the capital markets of India, there is an increase in the level of earnings management with regard to those companies that did not implemented them during the year 2010 (Rudra and Bhattacharjee, 2012). For their part, Adibah, Wan Ismail, Anuar Kamarudin, Van Zijl and Dunstan (2013) suggest a decrease in said level of manipulation for the companies of Malaysia, comparing 3 years before and 3 years after the implementation of said standards. Finally, Bryce, Ali and Mather (2015) indicate that the implementation of the IFRS does not have significant effects on the quality of the accounting information in Australia, jointly analyzing the years comprised between 2003 and 2008. All of these studies have been executed under the model proposed by Dechow et al. (1995).
Another puzzling observation is that the microfinance industry does not seem to have suffered systemic crisesof the kind that formal banking systems go through all around the world from time to time. This is all the way more shocking after pondering the much stringent regulations banks are subject to, their strict conditions for granting a loan (documentation, collateral, etc.), and the fact that systemic shocks –that have repeatedly hit the economies in the region- should have a stronger impact on MFIs, which are often poorly diversified across sectors and regions. 11 This can be explained by two factors: for one, the difference can be an spurious artifact of the different press coverage received by the formal banking system and the microfinance industry, which in turn is due to their relative size and visibility to the general public. Consequently, it could be the case that the financial distress or bankruptcy of a commercial bank rapidly becomes a massive news while the mortality of dozens of small NGOs goes unnoticed, save for market players. Secondly, and probably foremost, MFIs should be more resilient to liquidity problems than banks, as their financiers are social investors for the most part, and they are less concerned about repayment than commercial ones.
Certainly, the globalization in Brazil has shown many anomalies and symptoms of crisis over the years. As it is true that it has become the largest emerging power of Latino America, it also declares severe inner structural problems: on the one hand, it originates a major growth of the gross national product while the structural unemployment, public debt and internal differences are incremented. These problems are expressed in the differential growth of cities depending on their role or insertion in the overall network, creating luminous and bright rooms those who become part of the globalizing process with cities such as Sao Paula and Rio de Janeiro; and opaque spaces those who are excluded from the process. To sum up, there are significant differences within Brazil depending on the places where the main companies are located, being these ones the ones that take great profit obtained by commerce.
Although the urgency of the early eighties removed financial liberalization from the immediate policy debate, it reappeared on the agenda of conditionality that accompanied the external debt negotiations. This link became clear in the mid- eighties with the appearance of the adjustment-cum-growth Baker Plan. Since then, coordination between the IMF, the World Bank, and other agencies has increased and the Washington Consensus has become more clearly defined. Even so, capital market liberalization was of secondary relevance in the eighties. The history of the economic performance during that period - especially in Argentina, Brazil, and Mexio, the largest economies in the region - is basically about a sequence of attempts and failures of comprehensive macroeconomic stabilization programs. Inflation and the balance of payments were stabilized for some time before new destabilizing trends required further adjustments and stabilization measures. There were huge real fluctuations around a stagnant trend. Variations in the institutional framework of the financial sector were of secondary importance compared to these cycles.
This paper studies the impact offinancial development on economic growth in the short and long run and the determinants offinancial development inLatinAmerica. This analysis contributes to the literature in several ways. First, it expands on Loayza and Ranciere’s (2006) study of the impact offinancial development on economic growth by focusing only on the Latin American region and expanding the sample period. Second, along the lines of the work of Rioja and Valev (2004a), this analysis considers dif ferent income groups when determining the long- and short-term ef fect offinancial development on economic growth. Third, in relation to the study of the determinants offinancial development, this paper expands on the work of Chin and Ito (2006) and Baltagi et al. (2009) by focusing on Latin American countries, expanding the sample period, and considering other factors related to institutions and country stability as possible determinants offinancial development. This paper answers the following questions for the Latin American region: 1) What is the ef fect offinancial development on economic growth for dif ferent time frames and across countries with varying income levels? 2) What factors lead to greater financial development? Studying financial development inLatinAmerica is relevant for several reasons. First, countries inLatinAmerica share a common set of coef ficients due to their shared experience, which is not necessarily the case for other regions (Grier and Tullock, 1989). Second, LatinAmerica
The second perspective, by contrast, suggests that prior experiences of judicial instability are likely to encourage new episodes in the future. Following the logic outlined in other fields, we argue that countries will fall in a judicial instability trap, with the probability of reshuffles increasing after previous purges of the high courts. Judicial reshuffles erode the legitimacy of legal institutions, facilitating subsequent attacks, and politicize the bench, creating stronger incentives for additional takeovers in the future (Helmke 2005; Pérez- Liñán 2011). Scholars have demonstrated that the independence of the judiciary is not always the most preferred outcome in developing countries because politicians have short-term horizons and manipulation of the judiciary becomes a resource to retain power (Aydın 2013; Popova 2012). Partisan loyalties have proven to be a relevant explanatory variable to account for judicial turnover inLatin American countries (Pérez-Liñán and Castagnola 2009). Therefore, governments confronting a judiciary packed by prior incumbents will have strong incentives to restructure the courts during their early years in office. This perspective can be linked to the idea of positive feedback in theories of path dependence and regime legacies (Pérez-Liñán and Mainwaring 2013; Pierson 2000), since every purge of the court ends up reinforcing an increasing risk of further purges.
Nanotechnology development inLatinAmerica is at its primary stage with associated individual investigators mostly in the academia in thematic areas of nanomaterial, bionanotechnology, nanoelectronics, nanoeducation, etc. This report highlights the distribution of such development in Costa Rica, Argentina, Peru, Brazil, Columbia, Venezuela, Cuba, Chile, Mexico, Uruguay, etc. Keywords: LatinAmerica, bionanotechnology, nanoelectronics and nanoeducation
emerging market games was the reduced relevance of domestic economic factors in the Argentine case. Given the mentioned features of the macroeconomic performance, what counted most for sustainability were external factors. These factors included, for instance, the main external circumstances affecting the pros- pects of the trade balance: export commodity prices and Brazil- ian demand for Argentine imports. But fundamentals contributed only partially to the formation of the players’ conjectures. Given that the bulk of the financial needs originated in inertial sources (debt rollover and the deficit in the factor services account), the most important conjecture for each individual player had to fo- cus on the future behavior of the international financial market with respect to the country, that is, the behavior of other play- ers. The signals about the prospects of the trade balance—like any other signals—were valued mainly for their expected influ- ence on the financial market’s future behavior.
diicultades si las motivaciones y los canales institucionales hechos especíicos en la dei- nición no están ligados explícitamente con el contexto social que los rodea” (p. 5). Por consiguiente, ellos prestan atención a meca- nismos y procedimientos que van más allá de las instituciones formales. No obstante, dos condiciones que dan notoriedad a América Latina, su excluyente estructura social e in- tratables desigualdades económicas, no reci- ben la misma importancia que la democracia procesal. Esto, sin embargo, se equilibra con las conclusiones a las que arriban algunos de los estudios de caso, donde esas condiciones juegan un rol en cómo se maniiestan la par- ticipación y la respuesta a la voluntad popu- lar. Así, el capítulo sobre Chile concluye, en parte, que la presente mala distribución del ingreso es una de las razones por las cuales la calidad de la democracia en ese país, a pe- sar de ser alta, no alcanza niveles óptimos. Además, los capítulos dedicados a México y Brasil mencionan que los más pudientes son usualmente los que más participan, aña- diéndose las diferencias étnicas, raciales y de género en este último caso. Levine y Molina no se oponen a la eliminación de la pobreza extrema y de las desigualdades, pero en aras de no caer en trampas ideológicas ellos no la consideran necesaria para una democracia de calidad del modo en que sí ven necesario el reforzamiento de los mecanismos existentes de responsabilidad pública. De hecho, ellos aseveran que “las diferencias socioeconómi- cas no se traducen automáticamente en dife- rencias en educación, información o recursos políticos” (p. 14) y añaden que los gobiernos pueden implementar políticas que reduzcan las desigualdades políticas aún en condiciones de desigualdad socioeconómica. Si esto es así, ¿qué utilidad puede tener el reforzamiento de los mecanismos de responsabilidad públi- ca y el que se fomente la igualdad política si
With regard to Australian market, Richards and Simpson (2009) found positive relation between the stocks prices and exchange rate. On the one hand, Diamandis and Drakos (2011) analyzed Latin American countries during the 80’s and 90’s, finding a long-term positive relation between such variables, except in Brazil. On the other hand, Wong (2017) found a negative relation between these variables on stock markets from Singapore, South Korea, Malaysia and United Kingdom, though not significantly - at 5% - in German, Japan and Philippines. Thus, most of these researches pointed to the positive relation between exchange rate and stock return. In this context, the following hypothesis is confirmed:
Hepatic encephalopathy (HE) is a neuropsychiatric syndrome characterized by changes in cognitive func- tion, behavior, and personality, as well as by transient neurological symptoms and electroencephalogra- phic changes, which occur in the context of acute or chronic liver failure. Cirrhosis is the main disease associated to HE, and it is known that its incidence is increasing worldwide. As a cause of mortality, cirrhosis is ranked 14 worldwide, but 10 in developed countries. It has been demonstrated that the inci- dence of liver disease is increasing, in part because of the ascending prevalence of NAFLD, HCV, HCC, as well of alcohol consumption. The real incidence of cirrhosis inLatinAmerica is unknown, although in some Latin American countries that provided national data, cirrhosis death rates were between 5 and 17/100,000 for men and 3 and 5/100,000 for women. Disability, quality of life, and social aspects should be considered when assessing the impact of a disease. In this context, preliminary estimates of the global burden of disease attributable to chronic liver disease seem to be substantial. Hepatic encephalopathy, a main com- plication of liver failure, occurs in 30-45% of patients as overt encephalopathy, but when subclinical or minimal hepatic encephalopathy (MHE) is considered, estimates of the incidence of encephalopathy vary from 20 to 60%. In USA, the 2009 NIH Report on the Costs of Digestive Diseases stated that liver disease was the second most costly disease in direct and indirect costs (13.1 billion dollars). Although the economic cost of HE has not been assessed, it is obvious that the economic impact of HE on daily activities of living is extremely high, as the costs of diminished work performance and lost wages are substantial.
For the launch of their first hybrid car in Brazil, the Fusion Hybrid, Ford developed a cam- paign based entirely on the use of social media. After having shown the vehicle at the International Auto Salon in Sao Paulo in November 2010, the automobile giant created a platform to collect consumer questions. A team composed of engineers and communica- tion specialists was formed to provide answers to the questions that would be available for consultation, 24/7. Web users could also use the platform to share their questions by email or via social net- works like Twitter, Facebook, or Formspring, a question and response social network. Ford pushed the idea farther by creating a series of short films featuring the pilot Ricardo Mauricio. In the videos Maurice answered the “best” questions asked by web users, and half-way through the project, the project counted:
2010 is paid in Brazil at US$3,265 significantly higher than the average inAmerica which reaches US$2,956 in 2010. It is also highlighted that the prices of Honduras and Nicaragua are significantly higher between 2000-2009. In general, Brazil, Colombia, Nicaragua, Honduras and Dominican Republic are above this average, while Mexico and Argentina are below. In Brazil, according to the report of the socio-economic rural studies department (DESER, for its words in Portuguese) published in 2011 is related to the increase of tobacco prices in dollars with the revaluation of the real against the currency of the United States. This revaluation process, in part, also explains the phenomenon in Colombia. The foregoing, however, does not prevent from affirming that the behavior in the domestic currency of tobacco has been more favorable than other agricultural products (Graph 10).
Hereunder, a quantitative and qualitative description will be made of the elements which allow to justify why, in the exploration of the perspectives to advance in the integration between Mexico and Central America, Costa Rica has been selected, because it is among the most viable Central American countries to start the process. Among the resources used to support it, CA's main business partners were selected to calculate the Openness Index per Capita (OIC=total trade/number of inhabitants) in 2010 and 2015, and its relationship with the Income per capita (IPc). This indicator is also calculated for the relationship between Mexico and Costa Rica, and other indicators published by other sources are added. To know the role played by the entrepreneurial/business sector in advancing the process of integration as well as the degree of knowledge and acceptance of the consumers of Mexican products in Costa Rica, the results of the application of a survey will be presented.