Documento de Trabajo

Comparing the Net Benefits of Incentice Based and Command and Control Regulations in a Developing Context: the Case of Santiago, Chile

There are numerous studies that establish the magnitude of the static efficiency gains made possible through the use of a cost effective ambient permit system (APS) compared to command and control (CAC) or other suboptimal instruments such as an emission permit system (EPS). However the cost effectiveness of APS rests both on the efficiency gains

Firm Sponsored General Training in a Frictionless Labor Market

In this paper I show that, contrary to Becker`s (1962) Human Capital theory and consistent with the evidence, in a frictionless labor market model firms pay for general training, while the worker recives the full return on general training, and the worker and the firm share the returns on specific investments to underinvesttment in spacific

Factors that Determine the Efficiency Ranking of Second-Best Instruments for Environmental Regulation

Cost-effective policies allow minimizing the compliance costs associated to reaching a desired environmental quality target. However cost reductions associated to the use of these policies are not always significant. In this paper a conceptual model is developed to analyze explicitly the interaction among the factors that determine the compliance costs under two market based policies

Equity and Educational Performance

In this paper, we review the main issues under discussion in the field of economics of education, with a special focus on Latin America. We seek to organize the debate about educational policies by showing how these policies respond to different models based on different assumptions and hypotheses about how the educational system functions. Methodological

Bank Lending and Relationship Banking: Evidence from Chilean Firms

In this paper we empirically study bank-client relationships using a sample of manufacturing Chilean firms. We examine whether concentration and the duration of bank-firm relationships affect the terms of bank financing, evaluating both the volume of bank lending and bank loan costs. Our results indicate that lower concentration, measured by the number of banks a

How Sensitive is Volatility to Exchange Rate Regimes?

It is usually conjectured that the nominal exchange rate should be more volatileunder a free float than under a dirty float regime. This paper examines this issue for theChilean economy. Specifically, in September 1999 the Central Bank of Chile eliminated the floating band for the nominal exchange rate, which operated since 1984, and established a

Could Higher Taxes Increase the Long-Run Demand for Capital?: Theory and Evidences for Chile

Is a tax increase always detrimental for capital formation? This paper estimates a long-run demand for capital in Chile, and studies the responsiveness of firms’ desired capital stock to variations in tax rates. We combine the neoclassical model with a cointegration argument to obtain a long-run demand for capital that is valid for a general

A Decade Lost and Found: Mexico and Chile in the 1980s

Chile and Mexico experienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation based on falls in real wages and real exchange rates, and a debt

Un análisis del mercado de cobertura de riesgo en Chile y el mundo (A market analysis of hedging in Chile and worldwide)

Between the 1970`s and the 1980`s, the market of derivatives flourished. Forwards, futures and options began to be regularly traded. According to information gathered by The Bank of International Settlements, between January and April 1998, the value of over-the-counter (OTC) positions outstanding was over US$72 thousand billion, while the value of positions outstanding in organized

Trade Theory and Trade Facts

This paper quantitatively tests the «new trade theory» based on product differen-tiation, increasing returns, and imperfect competition. We employ a standard model, which allows both changes in the distribution of income among industrialized coun-tries, emphasized by Helpman and Krugman (1985), and nonhomothetic preferences, emphasized by Markusen (1986), to effect trade directions and volumes. In addition,

Environmental Taxes, Inefficient Subsidies and Income Distribution in Chile: A CGE Framework

Successful economic growth followed by Chile, based on open market and export strategy, is characterised by a high dependence on natural resources, and by polluting production and consumption patterns. There is an increasing concern about the need to make potentially significant trade-offs between economic growth and environmental improvements. Additionally, policy-makers have been reluctant to impose

Energy Prices in the Presence of Plant Indivisibilities

In several countries (Chile, Bolivia, Argentina and Peru, among others), power plants are dispatched according to merit order, i.e., based on the marginal operating costs of the plants. In this scheme, the plant with the highest marginal cost sets the spot price at which firms trade the energy requires to fulfill their contracts. The model