Martin D. Cerisola

How Does U.S. Monetary Policy Influence Sovereign Spreads in Emerging Markets

This paper quantifies the impact of changes in U.S. monetary policy on sovereign bond spreads in emerging market countries. Specifically, the paper explores empirically how country risk, as proxied by sovereign bond spreads, is influenced by U.S. monetary policy, country-specific fundamentals, and conditions in global capital markets. While country-specific fundamentals are important in explaining fluctuations in country risk, the stance and predictability of U.S. monetary policy are also important for stabilizing capital flows and capital market conditions in emerging markets.

What Drives Inflation Expectations in Brazil?: An Empirical Analysis

This study examines the macro-economic determinants of survey inflation expectations in Brazil since the adoption of inflation targeting in 1999. The results suggest that the inflation-targeting framework has helped anchor expectations, with the dispersion of inflation expectations declining considerably, particularly during periods of high uncertainty. We also find that apart from the inflation target, the stance of fiscal policy, as proxied by the ratio of the consolidated primary surplus to GDP, has been instrumental in shaping expectations. The importance of past inflation in determining expectations appears to be relatively low, and the overall empirical evidence does not suggest the presence of substantial inertia in the inflation process.

How Does U.S Monetary Policy Influence Economic Conditions in Emerging Markets

This paper quantifies the economic impact of changes in U.S. monetary policy on emerging market countries. We explore empirically how country risk, as proxied by sovereign bond spreads, is influenced by U.S. monetary policy, country-specific fundamentals, and conditions in global capital markets. In addition, we simulate the direct effects of a tightening in U.S. monetary policy on economic conditions in developing countries. While country-specific fundamentals are important in explaining fluctuations in country risk, the stance and predictability of U.S. monetary policy are also important for stabilizing capital flows and capital market conditions and fostering economic growth in developing countries.

Sustaining Latin America's Resurgence: Some Historical Perspectives

This paper looks at the historical lessons that might serve to entrech Latin Americas newly resurgent growth phase. It briefly reviews the post-World War II experiences in Latin America and Asia, focusing on the conditions that favored capital accumulation and productivity growth in the faster growing economies. Among these, the paper highlights the importance of stable macroeconomic policies, especially fiscal policy.

Brazil's Long-Term Growth Performance - Trying to Explain the Puzzle

Purpose - This paper seeks to assess Brazils growth performance from a long-term perspective. Brazils growth performance over the past 25 years has been lackluster, and various hypotheses have been advanced to explain Brazils disappointing growth record. Design/methodology/approach - In contrast with the existing literature, the paper uses cross-country and panel estimation techniques to analyze Brazils growth record, building on the vast empirical literature on growth and its long-term determinants. It examines the extent to which fundamental factors found to be related to growth in the cross-section help to explain Brazils growth performance during 1960-2000. It also explores the dynamics of growth across time by using panel data models to assess the role of various fundamentals that may have influenced Brazils growth performance since 1960. Findings - The empirical evidence presented confirms that macroeconomic stability and several reforms have helped raise per capita growth in Brazil since the mid-1990s. The results also show that some long-standing structural weaknesses continue to weigh negatively on per capita growth. Practical implications - Reducing the high level of government consumption would help lower the overall consumption level in the economy and lower its intertemporal price – the real interest rate, thus helping to foster investment and growth. Originality/value - The paper provides useful information on Brazils growth performance from a long-term perspective.

Regional Economic Disparities in Australia

Australias remarkable economic performance during the 1990s has not resulted in a significant convergence of real per capita income, output, and employment levels across the countrys states and territories. This paper explores the role of certain economic rigidities that may have contributed to the lack of convergence, including rigidities in labor markets and in the structure of federal government transfers to households and subnational governments. The analysis suggests that the wage awards system has restricted the adjustment of real wages to productivity differentials, thus contributing to higher unemployment rates in some states. Federal government transfers to households also appear to have adversely affected work incentives in high unemployment states by limiting participation in the labor force.

Investment-Specific Productivity Growth: Chile in a Global Perspective

By the end of 2007, Chiles total factor productivity was lower than ten years earlier, a performance that contrasted sharply with the previous decade, when productivity grew by a cumulative 30 percent. This paper assesses productivity trends in Chile, by decomposing productivity into investment-specific technological change (associated with improvements in the quality of capital) and neutral technological change (related to the organization of productive activities). It concludes that investment-specific technological improvements have contributed significantly to long-term growth in Chile, in line with trends observed in other net commodity exporters, while neutral technological change has been slow.

Brazil's Long-Term Growth Performance-Trying to Explain the Puzzle

This paper assesses Brazils growth performance from a long-term perspective, using crosscountry and panel estimation techniques, building on the vast empirical literature on growth. The empirical evidence presented in this paper confirms that macroeconomic stability and several reforms have helped raise per capita growth in Brazil since the mid-1990s. The results also show that some long-standing structural weaknesses continue to weigh negatively on per capita growth. Reducing the high level of government consumption would help lower the overall consumption level in the economy and lower its intertemporal price - the real interest rate - thus helping to foster investment and growth.

Tales from two neighbors : productivity growth in Canada and the United States

This paper assesses productivity trends in Canada vis-a-vis the United States from two perspectives. The first one is based on estimates of total factor productivity. The second one decomposes productivity growth into two sources: investment-specific technical change, associated with improvements in the quality of the capital stock, and neutral technical change, associated with the organization of productive activities. The results indicate that investment-specific technical change is the major underlying cause of the pickup in productivity in Canada and the narrowing of the productivity gap with the United States.