This paper uses a small open economy model to address two outstanding issues in monetary policy: (1) what restrictions on the policy rule ensure that the central bank does not introduce real indeterminacy into the economy, and (2) what is the optimal long run rate of inflation. The small open...

Hundreds of studies have failed to establish the effects of decentralisation on a number of important policy goals. This paper examines the cases of Bolivia and Colombia to explore decentralisation’s effects on government responsiveness and poverty-orientation. I first summarize economic data...

The political left turn in Latin America, which lagged its transition to liberalized market economies by a decade or more, challenges conventional economic explanations of voting behavior. While the implications of upward mobility for the political preferences of forward-looking voters have been...

Latin America and the Caribbean have become in the last decade or so a formidable laboratory for the design and implementation of innovative social policies. In the face of an unprecedented surge in the number of non-contributory social assistance benefit programs in the region, there is a...

This paper contributes to the burgeoning research on inequality and top incomes around the globe by presenting the first available estimates of top income shares and effective income tax rates in contemporary Chile based on analysis of anonymous income tax return microdata. We pay special...

The average Latin American country produces about 1 fifth of the output per worker of the US. What are the sources of these enormous income gaps? I report development-accounting results for Latin America. On average Latin America’s overall physical and human capital endowment relative to the...