The government spending multiplier in Latin American countries: Does the institutional environment matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rafael Acevedo ◽  
Jose U. Mora ◽  
Andrew T. Young
Keyword(s):  
International Trade ◽  
Latin American ◽  
Government Spending ◽  
Capital Mobility ◽  
Economic Freedom ◽  
Institutional Environment ◽  
Content Type ◽  
The Government ◽  
Trade Share ◽  
Latin American Countries

PurposeMora and Acevedo (2019) report that the government spending multipliers in Latin American countries are notably higher than what is typically reported for developed economies. Latin American countries have been inclined toward using procyclical fiscal policies. Those policies have been perceived as being effective at mitigating the effects of the 2008–2009 Great Recession. This study aims to estimate the government spending multiplier using Latin American panel data from 19 Latin American countries from 2000 to 2018. The estimates are conditional on the extent of openness, capital mobility and economic freedom. Based on the results, the latter is important: the less economically free a country, the larger its spending multiplier. Lower economic freedom in Latin American countries can help to account for their large spending multipliers. In particular, restrictions on international trade are positively associated with multipliers. This is the case even while controlling the trade share of GDP. Design/methodology/approachThe authors provide regression results that are conditional on the extent of openness, capital mobility and economic freedom. FindingsThe less economically free a country, the larger its spending multiplier. Lower economic freedom in Latin American countries can help to account for their large spending multipliers. In particular, restrictions on international trade are positively associated with multipliers. This is the case even while controlling the trade share of GDP. Originality/valueTo the best of the authors’ knowledge, this is first study to estimate the fiscal multiplier conditional on economic freedom levels. The authors provide correctly calculated multipliers conditional on different levels of economic freedom. The authors point the way to future studies considering the effectiveness of fiscal policy conditional on institutional/policy quality.

Venezuelan early election call raises a range of risks

2018 ◽  
Keyword(s):  
Latin American ◽  
Presidential Elections ◽  
Content Type ◽  
Political Situation ◽  
Constituent Assembly ◽  
State Of The Union ◽  
Secretary Of State ◽  
The Government ◽  
To Come ◽  
Latin American Countries

Significance On January 23, Venezuela’s National Constituent Assembly (ANC) called for presidential elections to be brought forward to before April 30. The move has exacerbated an already fraught political situation and undermined dialogue between the government and opposition parties. Impacts US Secretary of State Rex Tillerson will visit Mexico, Argentina, Colombia, Peru and Jamaica from February 1; Venezuela is a key issue. Oil sanctions would have a catastrophic effect on ordinary Venezuelans; Latin American countries are unlikely to come on board. US President Donald Trump’s State of the Union speech today will be scrutinised for what he says (or does not say) about Venezuela.

Mexico's weak GDP growth will outlast Pena Nieto

2016 ◽  
Keyword(s):  
Latin American ◽  
Economic Reforms ◽  
Gdp Growth ◽  
Short Term ◽  
Severe Problem ◽  
Content Type ◽  
World Economic ◽  
The Government ◽  
Latin American Countries ◽  
Economic Outlook

Subject GDP growth shows no sign of improving in the short-term. Significance In its most recent update to its World Economic Outlook, the IMF lowered its forecast for Mexico's 2016 GDP growth to 2.4% from 2.6% foreseen in January. This figure compares well with other Latin American countries -- notably Brazil and Venezuela -- yet it marks the continuation of a trend of meagre expansion that has characterised President Enrique Pena Nieto's time in office despite his efforts to introduce economic reforms. Impacts Further reform to encourage greater flexibility in the labour market will be key to increasing small business productivity. Low growth and a lack of prospects for the young will feed into Mexico's rising crime rates. The lack of growth could become a severe problem for the government both directly and indirectly in the 2018 election.

Ecuador prison system poses challenges for Moreno

2019 ◽  
Keyword(s):  
Latin American ◽  
Relative Stability ◽  
Public Spending ◽  
Prison System ◽  
Security Policies ◽  
Economic Conditions ◽  
Right Wing ◽  
Content Type ◽  
The Government ◽  
Latin American Countries

Subject Ecuador's crumbling prison system. Significance Ecuador experiences lower levels of crime than many Latin American countries but insecurity is mounting. A wave of protests that swept the country in October was accompanied by widespread looting and vandalism, indicating the difficulties facing President Lenin Moreno in maintaining order after a decade of relative stability under his predecessor, Rafael Correa. Prison conditions have deteriorated and violence is increasing. The capacity of the government to strengthen the prison system and curb criminality is hindered by its lack of legitimacy and its efforts to cut public spending. Impacts Mounting crime and violence will favour right-wing politicians and parties who promise hard-line security policies. Correa will seize on rising disorder to discredit Moreno, pointing to the relative stability achieved during his presidency. Weak economic conditions and escalating drug trafficking will continue to fuel crime, placing pressure on the prison system.

International trade and innovation: delving in Latin American commerce

2020 ◽  
Vol 33 (3/4) ◽  
pp. 535-547
Author(s):  
Ana María Vallina-Hernandez ◽  
Hanns de la Fuente-Mella ◽  
Rodrigo Fuentes-Solís
Keyword(s):  
International Trade ◽  
Latin American ◽  
Bilateral Trade ◽  
Panel Data Analysis ◽  
Knowledge Society ◽  
Theoretical Models ◽  
American Business ◽  
Content Type ◽  
Knowledge Based Economy ◽  
Latin American Countries

PurposeThe purpose of this paper is to compare and contrast the international trade characteristics of commerce between Latin American countries and some of the top economies in the world, in order to identify new business opportunities for LATAM firms in dynamical external markets.Design/methodology/approachA triple indexed gravity model, correcting with robust standardized errors clustered, and a panel data analysis was used to obtain the relationship between Latin American countries and advanced and other emerging economies.FindingsThe main finding of this paper is that innovation overcomes gravity effects and parameters typical of a knowledge society are the significant ones to explain trade among different regions. The model that includes an innovation proxy accommodates with the new international theories of trade. Besides, communication capacity is essential to reach consumers abroad with newer and more complex products. Moreover, the constant is significant when innovation is included, which may imply intersectoral trade that behaves relatively stable in bilateral trade.Practical implicationsThe findings suggest that the economies that have some relevance in trade, have increasing numbers regarding patents. Thus, the empirical findings relate to the theoretical models which state that comparative advantages may be dynamic due to technological innovation.Originality/valueThis paper shows that innovation is a central parameter to engage in intratrade and develop a knowledge-based economy. Latin America sometimes appears to be a puzzle as to how to improve its economic performance and overcome its social and economic problems. Intratrade seems to be the route to increase Latin American business participation in world trade.

Evolution of financial inclusion in Latin America

2020 ◽  
Vol 33 (2) ◽  
pp. 261-276
Author(s):  
Lisana B. Martinez ◽  
Valeria Scherger ◽  
M. Belén Guercio ◽  
Sofía Orazi
Keyword(s):  
Latin American ◽  
Credit Cards ◽  
Financial Inclusion ◽  
Content Type ◽  
The World Bank ◽  
The Mean ◽  
Main Determinants ◽  
Binary Probit ◽  
Positive Evolution ◽  
Latin American Countries

PurposeThis paper analyses the evolution of the financial inclusion and its main determinants in seven Latin American countries.Design/methodology/approachThe database used is the Global Findex from the World Bank for the latest data released that includes the years 2011 and 2014. The variables used are formal financial accounts, formal savings and formal credit as proxies of financial inclusion for the years of study. Moreover, the use of debit and credit cards is considered. The methodologies applied are the mean difference tests, in order to contrast the hypotheses of the inclusion evolution and binary probit regressions models.FindingsThe results of the analysis show that there is a positive evolution in the use of financial instruments in the countries of the sample, especially in the use of formal accounts. On the other hand, considering the characteristics of the individuals, age, level of education and income positively affect their financial inclusion.Originality/valueThere are no similar works for the region of study that allow us to evaluate the evolution of financial inclusion considering the variables selected in the literature. It is possible to clearly fulfil the proposed objective, highlighting the importance of implementing financial inclusion policies in view of the low percentage of use of the instruments in the analyzed countries.

Energy reform will hit investor confidence in Mexico

2021 ◽  
Keyword(s):  
United States ◽  
International Trade ◽  
Trade Agreements ◽  
The United States ◽  
Energy Prices ◽  
Content Type ◽  
Investor Confidence ◽  
International Trade Agreements ◽  
The Government ◽  
Energy Reform

Significance The government will appeal the rulings, which follow action by renewables firms. With constitutional battles over energy investments already unfolding, the future of Mexico’s energy framework has been thrown into turmoil. Impacts Increasing energy prices will probably push inflation above Banxico’s upper target limit of 4%. AMLO’s apparent disregard for international trade agreements will strain relations with the United States. AMLO’s pro-austerity fiscal stance could take a toll on his popularity.

scholarly journals Smart Regulation in times of COVID 19: An introspective preliminary analysis for its application in Ecuador

2020 ◽  
pp. 120-164
Author(s):  
Jennifer Vanessa Zaldumbide Vaca ◽  
Angie Nathaly Santacruz Mediavilla ◽  
Pamela Fernanda Heredia Pazmiño
Keyword(s):  
Quality Of Life ◽  
Latin American ◽  
The United States ◽  
Better Regulation ◽  
Smart Regulation ◽  
The Government ◽  
First World ◽  
Latin American Countries ◽  
Fundamental Entity

Better regulation is a public policy that governments implement to improve the quality of life of their citizens. These policies bring significant benefits to all market players, among the most palpable are innovation, administrative simplification, a clear commitment by the government, and competitiveness. A fundamental entity for the development of this type of regulation is the Organization for Economic Cooperation and Development (OECD), whose main objective is to create policies that improve the quality of life of citizens around the world. Among the members of this organization are first world countries such as the United States and Spain, as well as third world Latin American countries such as Mexico and Colombia, whose government administration serves as a model for the Ecuadorian people. It is because, without considering that their economies are not as large, developed, and stable, they have managed with the commitment, perseverance, and responsibility to be supported by this international institution. Nowadays, the problem of over and deregulation that has remained in Ecuador. Since the beginning of its history, it serves as an axis of study to propose the implementation of regulatory improvement within its political system. In order do this, it must be considering the principles of governance, proper preparation for its application, and the professionalism of all market players.

Job flexibility and job satisfaction among Mexican professionals: a socio-cultural explanation

2018 ◽  
Vol 40 (5) ◽  
pp. 921-942 ◽  
Author(s):  
Miguel A. Baeza ◽  
Jorge A. Gonzalez ◽  
Yong Wang
Keyword(s):  
Job Satisfaction ◽  
Latin American ◽  
Content Type ◽  
Women Employees ◽  
Mexican Society ◽  
Job Flexibility ◽  
Cultural Explanation ◽  
The Relationship ◽  
Latin American Countries

Purpose The purpose of this paper is to study how job flexibility influences job satisfaction among Mexican professionals, and focus on the role of key socio-cultural moderators relevant to Mexican society. Design/methodology/approach The paper explore how this relationship may be more important for women, employees with dependents such as children and elder parents and younger generations of professionals (e.g. Millennials). Findings The authors find that job flexibility is positively related to job satisfaction. This relationship is stronger for employees without dependents, as well as for younger generations of professionals (e.g. Millennials). Surprisingly, the relationship between job flexibility and job satisfaction does not differ by gender. The findings explain why job flexibility is more conductive to job satisfaction for employees without dependents, who tend to belong to younger generations. Originality/value Overall, the findings present important implications for managing job flexibility in Mexico and other Latin American countries, particularly for younger professionals.

Kaizen, a continuous improvement practice in organizations

2018 ◽  
Vol 30 (4) ◽  
pp. 255-268 ◽  
Author(s):  
Karla María Alvarado-Ramírez ◽  
Víctor Hipólito Pumisacho-Álvaro ◽  
José Ángel Miguel-Davila ◽  
Manuel F. Suárez Barraza
Keyword(s):  
Empirical Evidence ◽  
Continuous Improvement ◽  
Latin American ◽  
The State ◽  
Structured Interviews ◽  
Managerial Behavior ◽  
Content Type ◽  
Service Companies ◽  
The Impact ◽  
Latin American Countries

PurposeThe purpose of this paper is to compare the practices of continuous improvement that are applied in medium and large manufacturing and service companies in two Latin American countries. At the same time, benefits and barriers experienced by these companies with regard to sustainability of continuous improvement are explored.Design/methodology/approachIn order to generate a comparative study between two Latin American countries, interviews were conducted with managers linked to continuous improvement in medium and large companies in the State of Puebla and the Metropolitan District of Quito, which are important areas in Mexico and Ecuador, respectively. Data were collected by means of document analysis, semi-structured interviews, and direct observation.FindingsCompanies in both countries identify the use of various techniques and/or tools for continuous improvement. The results of the empirical evidence show how the impact of the application of the techniques has been beneficial in economic and human terms. Thus, the exploratory study has permitted the identification of the drivers and inhibitors in the maintenance of continuous improvement.Research limitations/implicationsThe research is based on only two areas of the Latin American countries: Mexico and Ecuador. Their results can therefore not be generalized. The approach is applied in a specific environment, namely, the State of Puebla and the Metropolitan District of Quito. This study incorporates the perception of managers, directors, and/or supervisors involved in continuous improvement processes.Practical implicationsThis paper seeks to provide analytical input. The study is of great interest to researchers, managers, consultants, and professionals linked to projects of continuous improvement who wish to incorporate continuous improvement practices which are sustainable over time. A new managerial behavior is the basis of continuous improvement, where the training and development of the human resource increases the commitment to achieve organizational changes.Originality/valueThis research makes an empirical contribution to the literature through the understanding of practices of continuous improvement in a Latin American context, highlighting the factors that improve or impede the process of continuous improvement. Particularly in Mexico and Ecuador, the empirical evidence on this subject is still scarce despite the existence of theoretical academic literature.

Sign in / Sign up

Export Citation Format

Share Document