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1011. 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

1012. 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

1013. 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

1014. 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

1015. Nongovernmental Terrorism in Latin America: Re-examining Old Assumptions

Author:
Andreas Feldmann and Maiju Perälä
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
For years nongovernmental terrorism in Latin America was considered to be an epiphenomenon of the Cold War, and consequently explained in terms of that war. The persistence of terrorism throughout the region in the 1990s not only has indicated that many of our assumptions concerning the causes of terrorism were misleading, but also has lead scholars to reexamine the phenomenon of nongovernmental political violence. This paper investigates the validity of a number of hypotheses recently explored in the literature by applying a pooled time series cross section regression analysis to data from seventeen Latin American countries between 1980 and 1995. Findings indicate that nongovernmental terrorist acts in Latin America are more likely to occur in countries characterized by widespread state human rights violations. Likewise, evidence is found that nongovernmental terrorism in the region tends to be more prevalent in countries characterized by electoral and associational liberties than by restrictive dictatorships. Association between economic performance or structural economic conditions and the incidence of terrorism is not substantiated by the findings.
Topic:
Cold War, Democratization, and Terrorism
Political Geography:
South America and Latin America

1016. Transforming Labor-Based Parties in Latin America: The Argentine Justicialista Party In Comparative Perspective

Author:
Steven Levitsky
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
This article seeks to explain the success or failure of Latin American labor-based parties in adapting to the contemporary challenges of economic liberalization and working class decline. It focuses on party organization, and specifically, on informal and under-institutionalized organizational forms. The article's central claim is that under-institutionalized organizational structures may facilitate party adaptation in a context of environmental crisis. Thus, mass populist parties, which lack the bureaucratic constraints that tend to inhibit change in better institutionalized labor-based parties, may possess a distinctive advantage in the neoliberal period. Although these parties' deep roots in society provide them with relative electoral stability, other populist legacies, such as fluid internal structures, non-bureaucratic hierarchies, and centralized leaderships, yield a high degree of strategic flexibility. The article applies this argument to the case of the Argentine Justicialista Party (PJ), a mass populist party that adapted with striking success in the 1980s and 1990s. In the coalitional realm, the poorly institutionalized nature of the PJ's party-union linkage allowed reformers to easily dismantle traditional mechanisms of labor participation, which contributed to the PJ's rapid transformation from a labor-dominated party into a patronage-based party. In the programmatic realm, the PJ's non-bureaucratic hierarchy and under-institutionalized leadership bodies provided President Carlos Menem with substantial room for maneuver in carrying out a neoliberal strategy that, while at odds with Peronism's traditional program, was critical to the party's survival as a major political force.
Topic:
Government and Politics
Political Geography:
South America and Latin America

1017. Managing Security Challenges in Post-Conflict Peacebuilding

Author:
Sheila Coutts and Kelvin Ong
Publication Date:
06-2001
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
While a functioning security sector provides the cornerstone for stable and democratic post-conflict societies, the record of the international community in establishing this critical function is mixed. Despite repeatedly having to manage the immediate post-conflict situation in various peace operations in Europe, Africa, Asia and Latin America, the international community still fails to take the state of the local security sector adequately into account when planning its own intervention.
Topic:
Conflict Resolution, Security, Human Rights, International Law, International Organization, Migration, and United Nations
Political Geography:
Africa, Europe, Asia, and Latin America

1018. The Guatemalan Peace Process: The Accords and Their Accomplishments

Author:
Luis Pásara
Publication Date:
12-2001
Content Type:
Working Paper
Institution:
Kroc Institute for International Peace Studies, University of Notre Dame
Abstract:
Guatemala, one of the poorest countries in Latin America, suffered an internal armed conflict for 36 years. A long and difficult peace negotiation process ended in 1996 with the signing of the most comprehensive and ambitious peace accords in the history of peace agreements. Five years later, the accomplishments of the accords are limited. This article examines the social context in which the accords were negotiated and implemented. It also explores some of its accomplishments and shortcomings, and suggests the first lessons learned.
Topic:
Conflict Resolution, International Law, and Peace Studies
Political Geography:
Latin America and Central America

1019. Caribbean Tourism: Igniting the Engines of Sustainable Growth

Author:
Anthony T. Bryan
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
The North-South Center, University of Miami
Abstract:
Tourism drives economic growth in ways that make it one of the best engines for job creation and development for poor countries that possess natural beauty and relevant infrastructure. The industry is highly labor intensive and encourages entrepreneurship. Under its ambit, property owners, restaurants, and local suppliers of goods and services, among others, develop the habits of risk taking without which no economy can realize its full potential. Tourism holds out the prospect of a better life for those stakeholders who make money from it. Not unlike trade, it improves an economy's competitiveness. Trade does so because it stimulates local suppliers to match the quality and variety of imported goods. Tourism does so because returning travelers to a destination demand the goods and services they have seen in other countries (Elliott 2001).
Topic:
Development, Environment, and International Trade and Finance
Political Geography:
United States, Latin America, and Caribbean

1020. Protest and Collaboration: Transnational Civil Society Networks and the Politics of Summitry and Free Trade in the Americas

Author:
Patricio Korzeniewicz and William C. Smith
Publication Date:
09-2001
Content Type:
Working Paper
Institution:
The North-South Center, University of Miami
Abstract:
This paper examines the politics of hemispheric integration exemplified by the Summits of the Americas held in Miami (1994), Santiago (1998), and Quebec (2001) and the negotiations over the creation of a Free Trade Area of the Americas (FTAA). Our basic premise is that political and institutional arrangements articulating state, society, and economy in Latin America are currently in the midst of a process of reconfiguration unleashed by the acceleration of globalization and attendant crises of state-centered development strategies. More specifically, we believe the Americas are witnessing the emergence of an ensemble of new social and political actors, among the most salient of which are new social movements and civil society organizations (CSOs), organized in networks operating at the domestic, regional, and global levels.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States, America, South America, Latin America, Central America, Caribbean, North America, and Miami