Guillermo LaGarda

Robots Are Us: Some Economics of Human Replacement

Will smart machines do to humans what the internal combustion engine did to horses – make them obsolete? If so, can putting people out of work or, at least, good work leave them unable to buy what smart machines produce? Our model’s answer is yes. Over time and under the right conditions, supply reduces demand, leaving everyone worse off in the long-run. Carefully crafted redistribution policies can prevent such immiserating growth. But blunt policies, such as limiting intellectual property rights or restricting labor supply, can make matters worse.

Capital Openness and Income Inequality: A Cross-Country Study and the Role of CCTs in Latin America

Recently, capital controls have made a comeback as both policymakers and academia have questioned the net benefits of liberalization and economic growth, especially after the 2008 Great Recession. While that literature has largely concluded that capital account liberalization may have detrimental effects on growth and accentuate financial instability in emerging markets, relatively little literature has examined the impacts of capital account liberalization on income inequality. Thus, this paper investigates the extent to which liberalization is beneficial for countries, conditional on institutional strength and financial depth. We specifically explore the differential impacts of capital account liberalization on income inequality during periods of economic expansion and contraction. The main findings suggest that the net impact of financial liberalization on income inequality is ambiguous during periods of economic expansion but detrimental during contractions. However, we also find that capital account openness needs not to be detrimental on income inequality if institutions are strong or - as it is the case in Latin America -if social safety nets are available.

Management and Execution of Investment Projects, the Task Prior to the Measurement of Development Effectiveness: The Case of the Inter-American Development Bank

The literature on development effectiveness has traditionally focused on the ex-post analysis of projects. While this is the appropriate method of measuring benefits, a previous step must be taken as a forerunner to good ex-post evaluation: the measurement of the efficiency in the execution of investment projects. This document aims to identify the determinants of good execution. Unlike previous studies, the current study analyzes execution using a project life cycle approach. Using an Inter-American Development Bank (IDB) database with information from various departments, the authors identify the factors that are associated with faster or slower disbursement on several stages of the projects’ life cycle. The basic premise is that the duration of an investment project– that is, the days elapsed from its approval to its final disbursement– is associated with preparation and execution-related factors as well as exogenous country factors. There is evidence that a sound macroeconomic and fiscal environment in countries is important for the purposes of good execution. Moreover, the authors find that delays in project planning and execution substantially extend project lives. These findings suggest the need to continue to improve efficiency in these areas. Finally, the authors find differences in project life cycles that are associated with delays caused by the projects’ executing units.

BIDeconomics México: Políticas para el crecimiento inclusivo y desarrollo de la economía nacional

Mexico es un pais geograficamente privilegiado, no solamente por las ventajas que supone su ubicacion, sino por la gran diversidad de recursos naturales que posee. En las ultimas dos decadas, el pais ha logrado estabilidad economica y una amplia apertura comercial. No obstante, el crecimiento no ha sido suficiente para generar mayores niveles de bienestar para sus habitantes. BIDeconomics Mexico es el resultado de una larga tarea de estudios, trabajos analiticos y de apoyo a diferentes politicas realizada por el Banco Interamericano de Desarrollo en el pais, con el fin de encontrar aquellos elementos que brinden las bases idoneas para el diseno de mejores politicas publicas. La meta: contribuir a cerrar los caminos divergentes sociales y economicos que se han producido y servir como un vehiculo para converger hacia los niveles de vida que un pais con los recursos naturales, fisicos y humanos como Mexico debe aspirar.

Determinantes en la ejecución de la cartera de préstamos de inversión: ¿Cómo se explican y qué podemos hacer para superarlos?

Con el objetivo de identificar brechas de eficiencia operativa tanto del Banco como de los prestatarios y presentar posibles mitigantes, se lleva a cabo un analisis integral que combina las experiencias operativas con la formalidad estadistica para fundamentar sus recomendaciones. En concreto, las preguntas que se plantean para guiar este analisis pueden resumirse en: ?Cuales son las causas de los retrasos en la ejecucion? ?En que medida el tiempo para desembolsar de un proyecto se atribuye a condicionantes externas (capacidades de los paises)? y ?Cuales son atribuibles a condiciones internas (procesos y capacidades del BID)? Los retrasos en la ejecucion se estiman contra los plazos originales de los proyectos, planeados al momento de su aprobacion por el Banco.

Can Russia Survive Economic Sanctions

Motivated by recent events, this paper studies the welfare impact of extreme sanctions regimes on Russia. To do so, it models the demographic and fiscal transition of the Russian Federation under free trade and autarky. Unlike previous studies of sanctions, our paper utilizes a large scale overlapping generations model with productivity growth, demographic change, region-specific policies, and an energy sector. This model is uniquely suited to understanding the long term impacts of different trade and fiscal regimes. Consequently, this paper investigates the most dramatic sanctions possible, forcing Russia in to long term autarky, under a variety of scenarios. It is consider the role of Russian capital controls as a response to sanctions as well as impacts on labor productivity and the energy sector. The paper finds that older currently living Russian generations are hurt the most by the sanctions. When Russia seizes foreign assets, this is in part due to lower interest rates on the assets of retirees. When the sanctions also reduce Russian government energy revenues, the old are hurt through increased consumption taxation. In all scenarios but the most benign, all generations currently living are made worse off.

The Impact of APIs in Firm Performance

Using proprietary information from a significant percentage of the API-tool provision and API-management industry, we explore the impact of API adoption on firm performance. We use a difference in difference approach centered on the date of first use to show that API adoption leads to increased profitability in the short and long run. APIs vary in their business function, and we find that B2B, B2C, and Internal API calls are heterogeneous in their association with outcomes. For a firm of 13,500 employees, our preferred specification implies API adoption increases yearly net income by more that

Robots: Curse or Blessing? A Basic Framework

250,000. We also find evidence that having an open developer portal further enhances the gains from API adoption.