CEMFI

About: CEMFI is a based out in . It is known for research contribution in the topics: Unemployment & Estimator. The organization has 71 authors who have published 499 publications receiving 46553 citations. The organization is also known as: Center for Monetary and Financial Studies.

Dual Labour Markets Revisited

Abstract: This paper provides an overview of recent research on dual labour markets. Theoretical and empirical contributions on the labour-market effects of dual employment protection legislation are revisited, as well as factors behind its resilience and policies geared towards correcting its negative economic and social consequences. The topics covered include the stepping-stone or dead-end nature of temporary contracts, their effects on employment, unemployment, churn, training, productivity growth, wages, and labour market inflows and outflows. The paper reviews both theoretical advances and relevant policy discussions on a very relevant topic in many European countries, in particular in several that had a very poor employment performance during the recent global economic and financial crisis.

Nonlinear Persistence and Partial Insurance: Income and Consumption Dynamics in the PSID

Abstract: In this paper we highlight the importance of the PSID in understanding income dynamics and consumption insurance. We explore the nonlinear nature of income shocks and describe a new quantile-based panel data framework for income dynamics. In this approach the persistence of past income shocks is allowed to vary according to the size and sign of the current shock. The model provides a good match with data and we confirm the results on population register data from Norway. Using the enhanced consumption and asset data in the PSID, nonlinear persistence is shown to have key implications for consumption insurance.

Precautionary Savings or Working Longer Hours

Abstract: This paper quantifies the macroeconomic implications of the lack of insurance against idiosyncratic labour market risk. I show that in a model economy calibrated to observed individual level data, households make ample use of work effort as a consumption smoothing mechanism. As a consequence, aggregate consumption is 0.6% lower, work effort is 18% higher and labour productivity is 12% lower than they would be in a complete markets setting. Not surprisingly, the welfare benefits of moving towards complete markets are very large. Accounting for the whole transition to the new complete markets steady state I find the welfare costs of market incompleteness above 16% of individual lifetime consumption.

Trade agreements and Latin American trade (creation and diversion) and welfare

Abstract: espanolEste documento analiza el proceso de integracion economica en America Latina. Utilizando un modelo de gravedad estructural, proporciona una evaluacion ex post del efecto de los acuerdos comerciales firmados por los paises latinoamericanos en el comercio internacional. Tenemos en cuenta la ultima ola de proliferacion de acuerdos comerciales y estimamos los efectos de cada uno. De promedio, los acuerdos comerciales tuvieron un efecto positivo en el comercio latinoamericano. Esto es valido tanto para los acuerdos intralatinoamericanos como para los acuerdos entre paises latinoamericanos y el resto del mundo. Sin embargo, descubrimos que estas estimaciones promedio cubren un importante nivel de heterogeneidad entre los acuerdos comerciales. Ademas, cuantificamos los efectos de equilibrio general ex ante sobre los volumenes de comercio y el bienestar de los paises latinoamericanos en diferentes escenarios de integracion mas profunda. EnglishThis study analyses the process of economic integration in Latin America. Making use of a structural gravity model, this paper provides an ex-post assessment of the effect of the trade agreements (TAs) signed by Latin American countries on international trade. We account for the last wave of TAs proliferation and estimate treaty level effects. On average, TAs had a positive effect on Latin American trade. This holds true for both intra-Latin American agreements and agreements between Latin American countries and the rest of the world. However, we unveil that these average estimates cover a substantial degree of heterogeneity across TAs. Additionally, we quantify ex-ante general equilibrium effects on the trade volumes and welfare of Latin American countries under different scenarios of deeper integration.

Another Look at the Instrumental Variable Estimation of Error-Components Models

Abstract: This article develops a framework for efficient IV estimators of random effects models with information in levels which can accommodate predetermined variables. Our formulation clarifies the relationship between the existing estimators and the role of transformation in panel data models. We characterise the valid transformations for relevant models and show the optimal estimators are invariant to the transformation used to remove individual effects. We present an alternative transformation for models with predetermined instruments which preserves the orthogonality among the errors. Finally, we consider models with predetermined variables that have constant correlation with effects and illustrate their importance with simulations.