Documento de Trabajo

Economic Performance, creditor protection and labor inflexibility

We present a static general equilibrium model of an economy with agents with heterogeneous wealth and endogenous credit constraints created by partial loan recovery rates. Higher loan recovery rates and better bankruptcy protection increase output and credit penetration, while the former raises the average interest rate spread and the latter decreases it. We also study

Effective Schools do Exist: Low Income Children’s Academic Performance in Chile

The aim of this paper is twofold. First, we show that despite students’ disadvantaged backgrounds and despite not having more financial resources than similar schools, there are schools in Chile that serve low income students and that obtain superior academic outcomes. Second, we present qualitative evidence to identify school and classroom processes that might explain

Public-Private Partnerships: when and how

When are public-private partnerships (PPPs) better than conventional provision and regulated privatization? And should PPP contracts be structured and governed when this is the case?We show that the defining features of a PPP are (i) bundling of construction and operation, (ii) private but temporary ownership of assets and (iii) intertemporal risk sharingwith the public sector.

The economics of infrastructure finance: Public-private partnerships versus public provision

We examine the economics of infrastructure finance, focusing on public provision and public-private partnerships (PPPs). We show that project finance is appropriate for PPP projects, because there are few economies of scope and assets are project specific. Furthermore, we suggest that the higher cost of finance of PPPs is not an argument in favour of

Cost of Moral Hazard and Limited Liability in the Principal-Agent Problem

In this paper we quantify the potential social-welfare loss due to the existence of limited liability in the principal-agent problem. The worst-case welfare loss is defined as the largest possible ratio between the social welfare when the agent chooses the effort that is optimal for the system and that of the sub-game perfect equilibrium of

Structural unemployment and the regulation of product market

I assess the impact of product market regulation on unemployment in a large-firm model of the labor market with search frictions and firm entry and exit. Two regulatory frictions are considered: administrative costs of establishing a new firm and the share of capital entrepreneurs recover when exiting. Product market regulation explains half the unemployment gap

Non-revelation Mechanisms in Many-to-One Markets

This paper presents a sequential admission mechanism where students are allowed to send multiple applications to colleges and colleges sequentially decide the applicants to enroll. The irreversibility of agents decisions and the sequential structure of the enrollments make truthful behavior a dominant strategy for colleges. Due to these features, the mechanism implements the set of

The Effectiveness of Private Voucher Education: Evidence from Structural School Switches

In this paper we analyze the effect of private voucher education on student academic performance using new data on Chilean students and a novel identification strategy. Most schools in Chile provide either primary or secondary education. We analyze the effect of private voucher education on students that are forced to enroll at a different school

Labor force heterogeneity: implications for the relation between aggregate volatility and government size

There is substantial evidence of a negative correlation between government size and output volatility. We put forward the hypothesis that large governments stabilize output fluctuations because in economies with high tax rates the share of total market hours supplied by demographic groups exhibiting a more volatile labor supply is lower.This hypothesis is motivated by the

Renegociación de concesiones en Chile

Este trabajo describe en forma sistemática los montos renegociados en las 50 concesiones cuyos datos han sido publicados por el MOP en su página web. Nuestra principal conclusión es que las renegociaciones son frecuentes y que involucran montos considerables. En promedio, cada concesión ha sido renegociada 3 veces, resultando en transferencias a los concesionarios de

Aggregate Implications of Employer Search and Recruiting Selection

This paper develops a general equilibrium model of nonsequential employer search with recruiting selection and heterogeneous workers, and characterizes its equilibrium. I depart from the standard search model by allowing firms to simultaneously meet several applicants and choose the best candidate. Recruiting selection is important: firms interview a median of 5 applicants per vacancy and

Inflation and welfare in long-run equilibrium with firm dynamics

We analyze the welfare cost of inflation in a model with cash-in-advance constraints and an endogenous distribution of establishments` productivities. Inflation distorts aggregate productivity through firm entry dynamics. The model is calibrated to the United States economy and the long-run equilibrium properties are compared at low and high inflation. We find that, when the period