Carlos Alfredo Rodriguez

A Model of Exchange Rate Determination under Currency Substitution and Rational Expectations

This paper analyzes a two-sector model of exchange rate determination for a mall open economy with flexible prices. Residents are assumed to hold both domestic and foreign currency and to have rational expectations. The model satisfies the homogeneity postulate but it is shown that an increase in the rate of expansions of money supply leads to an instantaneous deterioration of the real exchange rate. In the long run, however, the latter moves back to its previous level.

Exchange Rate Dynamics and the Overshooting Hypothesis

In this paper we analyze the determinants of the evolution of ex- change rates within the context of alternative models of exchange rate dynamics. We examine the overshooting hypothesis in models which emphasize differential speeds of adjustment in asset and goods markets as well as in models which emphasize portfolio balance considerations. We show that exchange rate overshooting is not an intrinsic characteristic of the foreign exchange market and that it depends on a set of specific assumptions. We also show that the overshooting is not a characteristic of the assumption of perfect foresight nor does it depend in general on the assumption that goods and asset markets clear at different speeds. As long as the speeds of adjustment in the various markets are less than infinite, the key factor determining the short run effects of a monetary expansion is the degree of capital mobility. When capital is highly mobile, the exchange rate overshoots its long-run value and when capital is relatively immobile the exchange rate undershoots its long-run value. Within the context of the portfolio-balance model we show that the effects of a monetary expansion on the dynamics of exchange rates and in particular on whether exchange rates overshoot or undershoot their equilibrium path depend critically on the specification of asset choice, on the degree of substitution among assets, and on the quality of the various assets in being an inflation hedge, Specifically, when internationally traded goods are a better inflation hedge than nontraded goods, the nominal exchange rate overshoots the domestic price level and conversely.

Welfare-theoretical analyses of the brain drain

Abstract The paper reviews and synthesises the theoretical analyses of the brain drain in the earlier literature and in the present symposium in the Journal on the subject. Static analysis and dynamic analysis are distinguished, critical issues are raised relating to how welfare changes should be discussed in the context of migration, and possibilities of fruitful future research are outlined.

The Role of Trade Flows in Exchange Rate Determination: A Rational Expectations Approach

The purpose of this paper is to examine the interaction between the exchange rate and the trade balance within the framework of the portfolio approach to exchange rates and rational expectations. In a simplified linear version, it is shown that the difference between the spot exchange rate and its long-run equilibrium value is proportional to the current level of the trade-balance surplus normalized by the current stock of foreign-asset holdings. Therefore, the analysis provides some evidence in favor of the presumption that surplus country should have an undervalued currency (relative to its long-run level). The basic idea behind the analysis is that, in a world of high capital mobility,current flow payments disequilibria can be accommodated by capital flows without need, in principle, for exchange rate movements. Only if the public expects lasting change in the required rate of capital flows will exchange rates adjust, since in this case the expected time path of net foreign assets will be significantly affected.

The non-equivalence of tariffs and quotas under retaliation

Abstract This note shows the non-equivalence of tariffs and quotas when foreign retaliation is allowed for. Using a Cournot-Johnson type of retaliation mechanism it is shown that, contrary to the case of tariffs, quota retaliation will lead to the elimination of international trade between the countries involved.

Brain drain and economic growth: A dynamic model

Abstract The problem of the international migration of educated people is analyzed in the context of a dynamic economy where individuals are faced with three basic decisions: education, acquisition of physical capital and migration. The paper discusses the transitional and steady-state behaviour of such an economy, and in addition incorporates a detailed dynamic analysis of the effects of minimum wages and of the implementation of a migration tax.

Feasibility and safety of early discharge after transfemoral transcatheter aortic valve implantation with the Edwards SAPIEN-XT prosthesis.

There is currently no consensus on the duration of hospitalization required after transfemoral transcatheter aortic valve implantation (TAVI). We report the feasibility and safety of early discharge after TAVI with the Edwards SAPIEN-XT prosthesis. From 2009 to 2013, 337 patients underwent transfemoral TAVI with the Edwards SAPIEN-XT prosthesis using local anesthesia and were discharged home either early (≤3 days, Early Discharge group, n = 121) or after 3 days (Late Discharge group, n = 216). The primary end point of the study combined death and rehospitalization from discharge to 30-day follow-up. Patients in the Early Discharge group were less symptomatic (New York Heart Association class ≥III: 64.5% vs 75.5%, p = 0.01) and had less renal failure (creatinine: 102.1 ± 41.0 vs 113.3 ± 58.9 μmol/L, p = 0.04), atrial fibrillation (33.1% vs 46.3%, p = 0.02), and previous balloon aortic valvuloplasty (11.6% vs 23.1%, p = 0.01) and were more likely to have a pacemaker before TAVI (16.5% vs 8.3%, p = 0.02). Pre-existing pacemaker (p = 0.05) and the absence of acute kidney injury (p = 0.02) were independent predictors of an early discharge, whereas previous balloon aortic valvuloplasty (p = 0.03) and post-TAVI blood transfusions (p = 0.002) were independent predictors of late discharge. The primary end point occurred in 4 patients (3.3%) in the Early Discharge group and in 11 patients (5.1%) in the Late Discharge group (p = 0.58). In conclusion, the results of our study suggest that early discharge after transfemoral TAVI using the Edwards SAPIEN-XT prosthesis is feasible and safe in selected patients.

A note on the economics of the duty free zone

Abstract This note extends some of the results of Hamada (1974) on the economic effects of a duty free zone. It is shown that, in the presence of factor mobility between the duty free zone and the rest of the economy, the final equilibrium will yield the same trade pattern which would have prevailed under free trade; moreover, all of the trade will be done by the duty free zone.

A Stylized Model of the Devaluation-Inflation Spiral

Se traza un modelo macroeconomico sencillo a fin de analizar algunos de los elementos dinamicos de la espiral devaluacion-inflacion ante un deficit real del sector publico financiado mediante la creacion de credito por el banco central. Se llega a la conclusion de que en esas circunstancias el objetivo de estabilidad de precios y de equilibrio externo son incompatibles. Suponiendo que el gobierno devalue siempre que las reservas alcancen un nivel minimo aceptable, el resultado probable del proceso sera un ciclo tipico durante el cual el nivel de los precios pasara por tres fases distintas: 1) un alza brusca en el momento de la devaluacion, 2) inflacion positiva y en desaceleracion y, finalmente, 3) un nivel estable de precios (con disminucion de las reservas). Se demuestra que aun cuando la necesidad de devaluar el tipo de cambio pueda surgir en momentos en que haya estabilidad de precios, el tipo de cambio y el nivel de precios son variables endogenas que no tienen entre si relacion directa de causalidad durante todo el curso del periodo ciclico. Tanto el movimiento del tipo de cambio como el del nivel de precios obedecen a acontecimientos monetarios, que a su vez son determinados enteramente por la monetizacion del deficit fiscal.Se traza un modelo macroeconomico sencillo a fin de analizar algunos de los elementos dinamicos de la espiral devaluacion-inflacion ante un deficit real del sector publico financiado mediante la creacion de credito por el banco central. Se llega a la conclusion de que en esas circunstancias el objetivo de estabilidad de precios y de equilibrio externo son incompatibles. Suponiendo que el gobierno devalue siempre que las reservas alcancen un nivel minimo aceptable, el resultado probable del proceso sera un ciclo tipico durante el cual el nivel de los precios pasara por tres fases distintas: 1) un alza brusca en el momento de la devaluacion, 2) inflacion positiva y en desaceleracion y, finalmente, 3) un nivel estable de precios (con disminucion de las reservas). Se demuestra que aun cuando la necesidad de devaluar el tipo de cambio pueda surgir en momentos en que haya estabilidad de precios, el tipo de cambio y el nivel de precios son variables endogenas que no tienen entre si relacion directa de causalidad durante todo el curso del periodo ciclico. Tanto el movimiento del tipo de cambio como el del nivel de precios obedecen a acontecimientos monetarios, que a su vez son determinados enteramente por la monetizacion del deficit fiscal.

Comparison of modifiable determinants of lipids and lipoprotein levels among African-Americans, Hispanics, and non-Hispanic Caucasians ≥65 years of age living in New York City

Information on determinants of plasma lipids and lipoproteins and how these factors would differ among race/ethnic groups in elderly populations is scarce. We studied cross-sectionally the distribution and predictors of lipids and lipoproteins in 1,118 free-living elderly subjects (> or =65 years of age), in a multiethnic urban community (22% non-Hispanic Caucasian, 34% African-American, and 44% Hispanic). Mean levels of total cholesterol, total/high-density lipoprotein (HDL) cholesterol ratio, and triglycerides decreased with increasing age (p <0.001). Low-density lipoprotein cholesterol and total cholesterol were lower among men, whereas women had higher levels of HDL cholesterol (p <0.001). Hispanics had lower low-density lipoprotein cholesterol, total cholesterol, and HDL cholesterol levels, whereas African-Americans had a lower total/HDL cholesterol ratio and triglyceride levels along with higher HDL cholesterol levels (p <0.001). Diabetes was more prevalent among Hispanics and African-Americans (p = 0.002), and body mass index was higher in African-Americans (p = 0.009). Hispanics were less likely to drink alcohol (p <0.0001), but more likely to drink larger amounts of coffee (p <0.0001). A greater proportion of African-Americans were active smokers (p <0.001). In multivariate regression models, body mass index was a significant independent predictor of total cholesterol (beta = 0.74, p <0.001). Waist circumference predicted lower HDL cholesterol levels (0.57 mg/dl lower per inch, p <0.001) and a higher total/HDL cholesterol ratio (beta = 0.05, p <0.001). Alcohol intake (>2 g/day) predicted higher HDL cholesterol (beta = 6.20, p <0.001). Diabetic status predicted lower HDL cholesterol (beta = -2.47, p <0.05), higher total/HDL cholesterol ratio (beta = 0.35, p <0.001), and triglycerides (beta = 37.10, p <0.001). Physical activity, coffee intake, and a calorie-adjusted atherogenicity index did not show independent predictive value. These findings indicate that obesity, alcohol intake, and diabetes mellitus are potentially modifiable independent determinants of lipids and lipoprotein levels in an elderly multiethnic population.