(Un)Natural Disasters: Electoral Cycles in Disaster Relief

Emergency spending is often exempt from campaign period restrictions and procurement guidelines, making it attractive for opportunistic politicians, but natural disasters are seen as outside political business cycles. However, droughts are frequent but challenging to measure, so politicians can leverage discretion for electoral gain. This paper analyzes electoral cycles, term limits, and partisan targeting around municipal drought declaration in Northeast Brazil. Two sources of exogeneity (rainfall shocks, electoral calendar) isolate the effect of non-climatic factors on drought declarations. I find that drought declarations, which trigger relief, are more likely in mayoral election years. Incumbents are more likely to win re-election if they declare a drought in the election year, during below or even above average rainfall. The results are consistent with interviews suggesting voters reward competent mayors and mayors trade relief for votes. This study highlights the interaction between distributive and environmental politics, which has increasing consequences due to climate change.

SINCRONIZACIÓN DE LOS CICLOS ECONÓMICOS DE MÉXICO Y ESTADOS UNIDOS: UN ENFOQUE DE CORRELACIÓN DINÁMICA

<p>El objetivo de este documento es analizar la sincronización de los ciclos económicos de México y Estados Unidos durante el periodo 1981-2017 mediante la estimación de un coeficiente de correlación condicional dinámica que permite tener una estimación para cada periodo de tiempo. Los resultados, obtenidos a partir de distintos indicadores de producción y métodos de eliminación de tendencia, muestran un aumento desde la apertura de la economía mexicana a mediados de la década de 1980, especialmente durante las recesiones de 2001-2002 y 2008-2009 y también una serie de descensos aislados, explicados por diferencias en los ritmos de crecimiento de ambas economías, y una declinación sostenida en la fase pos-Gran Recesión que se explica principalmente por reducciones en el comercio exterior.</p><p> </p><p align="center">SYNCHRONIZATION OF THE BUSINESS CYCLES OF MEXICO AND THE UNITED STATES: A DYNAMIC CORRELATION APPROACH</p><p align="center"><strong>ABSTRACT</strong></p><p>The objective of this paper is to analyze the business cycle synchronization of Mexico and the United States over the period 1981-2017 by estimating a dynamic conditional correlation coefficient that allows us to have an estimate for each time period. The results, obtained from different production indicators and different de-trending methods, show an increase in this synchronization after the opening of the Mexican economy in the mid-eighties, especially during the common recessions of 2001-2002 and 2008-2009, and some isolated drops explained by differences in the growth rates of both economies as well as a sustained decline in the post-Great Recession phase resulting from the decline of international trade.</p>

Unraveling the Exogenous Forces Behind Analysts' Macroeconomic Forecasts

Modern macroeconomics focuses on the identification of the primitive exogenous forces generating business cycles. This is at odds with macroeconomic forecasts collected through surveys, which are about endogenous variables. To address this divorce, our paper uses a general equilibrium model as a multivariate filter to infer the shocks behind market analysts' forecasts and thus, unravel their implicit macroeconomic stories. By interpreting all analysts' forecasts through the same lenses, it is possible to understand the differences between projected endogenous variables as differences in the types and magnitudes of shocks. It also allows to explain market's uncertainty about the future in terms of analysts' disagreement about these shocks. The usefulness of the approach is illustrated by adapting the canonical SOE semi-structural model in Carabenciov et al. (2008a) to Colombia and then using it to filter forecasts of its Central Bank's Monthly Expectations Survey during the COVID-19 crisis.