Abstract: Markov-switching models are estimated to characterise expan- sions and contractions for Latin American countries. In general, univariate analysis results imply that recessions are deeper in absolute magnitude, less persistent, and more volatile than expansions. From an international perspective, it is found that there is not a common Latin American cycle, but there exists some evidence about common regime shifts and cycles between Brazil-Peru and Chile-United States. However, it seems that their causes are very different and related to common shocks and similar policies. Therefore, it is concluded that individual business cycles are largely independent in Latin America. Resumen: Se usan modelos de cambio de regimen para caracterizar ex- pansiones y contracciones de varios paises latinoamericanos. Del analisis univariado se obtiene que las recesiones son mas agudas en magnitud absoluta, menos persistentes y mas volatiles que las expansiones. Asi- mismo, se concluye que no hay un ciclo economico latinoamericano, pero si cambios simultaneos de regimen y, por tanto, ciclos comunes entre Brazil y Peru y entre Chile y Estados Unidos. Sin embargo, al parecer sus cau- sas son diferentes y estan relacionadas con choques comunes y politicas eco- nomicas similares. Por lo tanto, se concluye que los ciclos individuales son fundamentalmente independientes.

Abstract: This study analyzes the role of group heterogeneity on the gen- der earnings gap in Mexico. Using individual level data from the Encuesta nacional de empleo urbano, an additively decomposable index of the ex- tent of gender unexplained wage inequality is estimated. The Jenkins index is larger for those with lower levels of education, those with a col- lege/university degree, and those relatively older and with more labor market experience. The index is also inversely related to firm size and larger in the private and informal sectors. There is also some evidence of significant regional differences in unexplained gender wage inequality. The results are robust to alternative assumptions about employer discrimi- nation aversion and suggest that group-specific public policy measures would be more effective than programs targeting women as a whole, if the goal is to reduce gender pay inequities as delineated in Mexico's Na- tional Development Plan 1995-2000.

Abstract: The Mexican episode of 1992-1994 was characterized by a steep rise in consumption accompanied by a sharp fall in investment. This pa- per provides an explanation of the negative response of investment to political risk, as occurred in Mexico between 1992 and 1994. It is assumed that, inside an adjustable band, the expected rate of depreciation is driven by a mixed diffusion-jump process and the expected real rate of return on an international bond is governed by a diffusion process, both processes being correlated. This paper analyzes a small open stochastic economy. Two cases are considered: i) a cash-in-advance, Ramsey-type economy, and ii) a Sidrauski-type economy. Resumen: La experiencia mexicana de 1992-1994 estuvo caracterizada por un marcado incremento en el consumo, acompanado de una fuerte caida en la inversion. Este trabajo proporciona una explicacion de la res- puesta negativa de la inversion al riesgo politico, como ocurrio en Mexico entre 1992 y 1994. El trabajo supone que, dentro de una banda ajustable, la tasa esperada de depreciacion sigue un proceso mixto de difusion con saltos y el retorno real esperado de un bono internacional sigue un proce- so de difusion; los dos procesos se encuentran correlacionados entre si. Este trabajo analiza una economia estocastica, pequena y abierta. Se con- sideran dos casos: i) una economia "cash-in-advance" del tipo de Ramsey y ii) una economia del tipo de Sidrauski.

Abstract: This paper analyses the impact of infrastructure on the growth rate of the Mexican manufacturing sector. For such purpose, two mea- sures of infrastructure are used: highways and electricity. Further, we also estimate the degree of returns to scale and the markup. We pooled two digit industries to obtain the estimates of the whole manufacturing sec- tor. For the entire manufacturing sector, our results do not show evidence of increasing returns but the existence of market power cannot be re- jected. We find that both types of public infrastructure have a significant effect on manufacturing growth and its inclusion reduces the estimated values of returns to scale and market power. Once we use sectoral data, we obtain mixed results: public infrastructure affects significantly only some sectors. Resumen: Este trabajo analiza el impacto de la infraestructura en la tasa de crecimiento del sector manufacturero mexicano. Con tal fin, se utilizan dos medidas de infraestructura: carreteras y electricidad. Adicionalmente, se estima el nivel de retornos a escala y el markup. Se agrupan las indus- trias a nivel de dos digitos para poder obtener estimaciones para todo el sector manufacturero. Para el total del sector manufacturero, nuestros resultados no muestran evidencia de retornos crecientes, pero la existencia de poder de mercado no puede ser rechazada. Se encuentra que ambos tipos de infraestructura tienen un impacto significativo sobre el creci- miento manufacturero y su inclusion en las regresiones reduce el nivel de estimacion del indice de retornos a escala y el nivel de poder de merca- do. Al utilizar datos sectoriales, se obtienen resultados mixtos: la infraes- tructura afecta de manera significativa solo a algunos sectores.

Abstract: The analysis focuses on the short-run dynamics of several mac- roeconomic variables and their relationship with the rate of inflation. The cyclical components of the variables are obtained through the Hodrick- Prescott filter. Contemporaneous correlations between the cyclical com- ponents show that inflation rates above their long-term trend are associ- ated with below trend economic activity, employment, investment and real wages and with nominal and real interest rates above their trend. Non-contemporaneous correlations show that inflation has an adverse effect on the referred variables. Results are confirmed through "impulse- response" functions.

Abstract: We study tax policy in a two-sector model of endogenous growth. Technological change is produced only by the export sector firms. Techno- logical knowledge can be used by the import sector firms. The govern- ment taxes the output of the export and the import sector firms. First, the export and the import sector firms are taxed with a common rate. Thus, the growth rate of the model with a common rate is lower than the model without taxes. We also show that when the tax rate is reduced only in the export (import) sector firms, the growth rate increases (decreases). We show the optimal solution and the optimal economic policy.

Abstract: We analyze some of the effects of the peso’s real appreciation on the output-inflation policy dilemma. Thanks to the appreciation, it is possible to achieve simultaneously a higher real wage and a lower inflation rate without need of output loss. After the capital inflows that support the appreciation stop, though, the policy dilemma is stronger than initially, because of a rise in the country’s stock of foreign debt. We discuss the difficulties involved in trying to offset this effect through variations in the domestic interest rate and show that the positive influence from an improvement in inflation expectations is transitory. In contrast, higher levels of labor productivity tend to improve the inflation-unemployment trade-off permanently.

Abstract: Based on time-series from 1960 to 1995, we show the existence -for Latin American countries- of a short and long run negative correla- tion between economic growth and uncertainty. The probable cause of such relationship is time-variant; it is only after 1990 that investment- based theories on the link between uncertainty and growth cannot be rejected by the data. Further, the data cannot support the claim that government expenditure explains the correlation between growth and uncertainty. Our results suggest that the average growth rate is endogenous to policy innovations. This implies that the long -run depends on short- run movements in activity, thereby casting some doubts on the conventional wisdom that assumes the dichotomy between an invariant steady state path and fluctuations around it.

Abstract: In this paper optimal tax formulae are computed when con- sumption of a commodity produces poUution. Then a test of the double dividend hypothesis based on the shadow pnces of those formulae is pro- posed.