Browsing by Author "Alfaro-Ureña, Alonso"
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- Análisis histórico del tipo de cambio real en Costa RicaThe Real Exchange Rate (RER) is a relative price that determines the allocation of resources in an economy, therefore it has an impact on economic activity and, in addition, reflects the conditions that affect competitiveness in international trade. Its analysis and interpretation must be carried out in a complementary way with internal and external macroeconomic variables. In this paper, the RER in Costa Rica is analyzed from a historical perspective for the period 1957-2020, together with the trajectory of its long-term macroeconomic fundamentals and the exchange rate regime in force at each moment. There is also included an estimation of the equilibrium real exchange rate (ERER) using the approach called Behavioral Equilibrium Exchange Rate (BEER). It is documented that the macroeconomic fundamentals of the ERER have varied substantially in ways that affected the RER in different directions, and that the latter has mostly remained on a path consistent with the equilibrium dictated by its macroeconomic fundamentals.
- Una aproximación del tipo de cambio real para Costa Rica, enfoque BEER 2007-2022This paper describes the methodology and results of estimating the equilibrium real exchange rate (ERER) using the reduced-form approach known as the Behavioral Equilibrium Exchange Rate (BEER). The real exchange rate (RER) equation is estimated with quarterly data in the period between I-2007 and IV-2022, which coincides with the adoption of exchange rate flexibility regimes in Costa Rica. The results indicate that the path of the ERER is explained by the evolution of its fundamentals: labor productivity, government expenditure, international investment position, terms of trade and the difference among local and external interest rates. Improvements in labor productivity, increases in Government spending and increases in the spread of local and external interest rates are correlated with downward movements in the equilibrium path of the RER (real appreciations). On the other hand, the more negative result in the international investment position and a fall in terms of trade explains movements towards real depreciations. During the period of analysis, there is no evidence of RER deviations from its equilibrium level beyond the coherence zone determined. Therefore, the variations on the ERER trajectory are consistent with the behavior of its fundamentals.
- Beneficios intangibles de la Inversión Directa (ID) en Zonas Francas en Costa Rica: Resumen de resultadosThis paper quantifies intangible benefits that arise from the interaction of multinational companies in the Free Trade Zone regime with their workers and with Costa Rican capital companies (domestic). We quantify this by comparing those benefits to the ones of multinationals outside this regime. Specifically, we calculate the increase in productivity that domestic firms experience from supplying multinationals, and the additional salary (or wage premium) experienced by multinational workers compared to what they would have received by working in domestic companies. We find that those new suppliers of multinationals in the Free Trade Zone experience a 23% increase in their productivity during the fourth year after starting the supply relationship, while those that supplied multinationals outside this regime only received a 4% productivity increase. Likewise, the wage premium of the multinational company outside the Free Trade Zone is 8,5%, while the wage premium of multinationals in the Free Trade Zone is 18,4%.
- Criptoactivos: análisis e implicaciones desde la perspectiva del Banco Central de Costa RicaThough originally created as a way to avoid financial institutions, the development and wider use around the globe of certain type of assets called cryptocurrencies has been facilitated by an increased interest in new ways to accumulate value. New cryptographic technology, wider access to the internet, and an increase in processing capacity has contributed to this process. Some characteristics of this type of assets allow it to serve as means of exchange and store of value, which are characteristics shared with fiat currency minted by central banks. Those shared characteristics may confuse final users about potential uses and risks for personal financial decisions. The purpose of this technical note is to bring light in about the technological process involved in the creation of these assets, and the possible implications associated with its use.
- JIECriptoactivos: análisis e implicaciones desde la perspectiva del BCCRAunque en sus inicios surgieron por la búsqueda de un mecanismo para realizar transacciones que permitiera prescindir de las entidades del sistema financiero, el desarrollo y expansión alrededor del mundo de activos denominados criptomonedas se ha facilitado por un interés creciente por nuevas formas de acumular valor. Lo anterior se ha combinado con avances en la investigación sobre criptografía, un acceso a internet más generalizado y el aumento de la capacidad de procesamiento de los equipos computacionales. Algunas características de estos activos permiten su uso como medio de intercambio y de almacenamiento de valor, usos que tradicionalmente se le asignan al dinero hoy día emitido por los bancos centrales. Lo anterior podría ser fuente de confusión para el usuario final sobre su potencial uso y los riesgos que implica para las finanzas personales, razón por la cual esta nota técnica busca facilitar la comprensión del proceso tecnológico involucrado en la creación de estos activos y describir las posibles implicaciones asociadas con su uso.
- JIEDinámica del mercado laboral en Costa RicaCon datos a nivel de empresa, se presentan hechos estilizados del empleo formal. Los resultados sugieren que la teoría neoclásica del empleo se cumple de manera heterogénea entre sectores; los salarios son un determinante más fuerte de la demanda laboral en la industria manufacturera y de construcción, por ejemplo. Además, el tamaño de la empresa es una variable relevante. Para las firmas grandes, el nivel de empleo es más persistente y éstas ajustan en mayor medida su planilla ante cambios en salarios e ingresos. En comparación con economías similares, la demanda laboral costarricense es más sensible a cambios en los salarios pero menos a cambios en la producción.
- JIEEfectos de convertirse en suplidor de una multinacional: nueva evidencia de encadenamientos entre empresasMuchos países alrededor del mundo compiten por atraer Inversión Directa (ID), usualmente materializados en forma de filiales, subsidiarias o sedes de Corporaciones Multinacionales (CMN); para este fin se establecen políticas públicas como exención de impuestos, subsidios a la infraestructura industrial y otras, orientadas a incrementar el atractivo del país como destino para ese tipo de inversión. Una de las motivaciones radica en el supuesto de que la entrada de empresas altamente competitivas va a generar un impacto positivo en la economía receptora que impulsa el desempeño y la productividad de las firmas domésticas. La vinculación directa en la cadena de suministros es uno de los canales que permiten la transferencia tecnológica y de conocimiento entre CMN y compañías nacionales.
- Efectos macroeconómicos de una depreciaciónAfter abanding the crawling peg regime in october 2006, the Costa Rican economy has experienced two abrupt depreciation episodes, in 2008 and 2014. The analysis of these two episodes shows that the observed depreciation is related to the increase of inflation, interest rates, and the lower economic growth. Within the labor market the depreciation episodes are related to lower employment and lower real wage. In this document we complement this descriptive analysis with the results of a counterfactual exercise based on Laverde (2015) in which we show the macroeconomic implications of having kept the crawling peg during the years after 2006. We also show the impact of a sudden devaluation of 5% induced by the Central Bank
- Expectativas de inflación en Costa RicaThe Banco Central de Costa Rica (BCCR) is currently transitioning to an Inflation Targeting (IT) regime. In such context, it is relevant for the monetary authority to characterize in the most complete way possible the inflation expectations of the population, both in the particular elements of the forecasts and in the processes by which agents take information into account for their individual predictions. This paper documents the analysis of the inflation expectations data contained in the Monthly Survey of Inflation and Exchange Rate Expectations. We test several hypotheses such as rational and adaptive expectations. The results show significant biases in those expectations, while there is also a lack of learning from past errors by the agents surveyed.
- Firm Export Dynamics in Interdependent MarketsEstimamos un modelo de la dinámica de exportación de empresas que incluye complementariedades entre países. La firma decide a dónde exportar resolviendo un problema de elección discreta combinatoria dinámica, para el cual desarrollamos un algoritmo de solución que supera los desafíos computacionales inherentes a la gran dimensionalidad de su espacio de estados y conjunto de opciones. Según la estimación de nuestro modelo, las empresas experimentan reducciones de costos al exportar a países que están geográfica o lingüísticamente cercanos entre sí, o que comparten acuerdos comerciales profundos; y los países, especialmente los pequeños, que comparten estas características con destinos atractivos, reciben significativamente más exportaciones que en ausencia de complementariedades.
- Gains from Trade: the Costa Rican CaseOne of the oldest and most interesting questions in the economic literature is how to quantify the gains from trade. Recently, Costinot & Rodrguez-Clare (2013) (CRC) developed a methodology that uses the World Input Output Database (WIOD) to compute this value for a list of countries. Costa Rica has never been part of this database given the lack of appropriate data. However, with the publication of a new Input Output Table for Costa Rica, the Foreign Trade Ministry (COMEX) was able to develop a domestic version of the WIOD that includes the country. This allows for counterfactual exercises in which we compare the current situation with autarky and other average tariff levels. As CRC show, this can be done using different productive structures and competition schemes in the economy. The results can provide valuable information on how much a small open economy like Costa Rica's can benefit from international trade, and what are the differences in the results when compared to similar countries.
- Importancia relativa de los beneficios intangibles de la Inversión Extranjera Directa (IED) en Zonas Francas en Costa RicaThis paper quantifies intangible benefits that arise from the interaction of multinational companies in the Free Trade Zone regime with their workers and with companies of Costa Rican capital (domestic). We compare those benefits to the corresponding benefits of multinationals that operate outside this regime. Specifically, we calculate the increase in productivity that domestic firms experience for supplying multinationals, and the additional salary (or wage premium) experienced by multinational workers compared to what they would receive by working in domestic companies. We find that those new suppliers of multinationals in the Free Trade Zone experience a 12% increase in their productivity from the first year after the start of the supply relationship, while those that supplied multinationals outside of this regime only received a 5% productivity increase. Likewise, the wage premium of the multinational company outside the Free Trade Zone is 6.2%, while the wage premium of multinationals in the Free Trade Zone is 14.3%.
- Indices de credibilidad del Banco Central de Costa Rica en la transición a Metas InflaciónThis paper computes six indexes that measure the monetary policy credibility of the Banco Central de Costa Rica, in its current transition to Inflation Targeting. The indexes, developed by Cecchetti and Krause (2002), Mendonça (2004), Sicsú (2005), Nahon and Meurer (2009), and a new one proposed in this paper, were calculated using the Monthly Survey of Inflation and Exchange Rate Expectations. All indexes show similar patterns over the sample, and the same happens when indexes for each of the strata of the sample are computed. The results show three periods where credibility has increased, with subsequent falls. The international and domestic conditions in which these movements happened are described in the paper. There is evidence that the monetary policy rate changes precede movements of the credibility indexes and not the other way around. There is also evidence of simultaneity of the inflation series with respect to the credibility indexes. The last data points show a stagnation of credibility as measured by the indexes.
- JIELa evolución de los ingresos laborales y la inequidad en Costa Rica: evidencia con micro datosAlfaro-Ureña, Alonso; Manelici, Isabela; Mendoza-Fernández, Luis Alfredo; Vásquez-Carvajal, José PabloEn esta investigación se utiliza una base de micro datos ligada patrono-empleado para estudiar la desigualdad de salarios en el sector privado formal costarricense durante el período 2006-2017. Se encuentra evidencia de que los ingresos reales de todos los percentiles de la distribución de salarios han aumentado al menos un 14%, al mismo tiempo la distribución ha cambiado de forma, los salarios más altos son los que tienen un mayor incremento relativo. También se encuentra evidencia de que dentro del conjunto de variables que podrían explicar el comportamiento observado está el aumento de la participación de empleo por parte de compañías multinacionales en el empleo total, así como el cambio estructural hacia una economía de servicios que ha experimentado la economía costarricense. Finalmente, se presenta una descomposición de varianza que muestra cómo el efecto de los trabajadores (en contraposición al de las empresas) aporta cerca de un 60% del cambio en la desigualdad. Parte de ello es explicado por el ingreso de multinacionales a territorio costarricense.
- Labor Demand Dynamics in Costa RicaThis paper studies the determinants of the labor demand in Costa Rica through firm level data. It also characterizes formal employment during the last 15 years through a set of stylized facts. The results suggest that: (i) the neoclassical theory of employment holds, (ii) wages are a stronger determinant for labor demand in the manufacturing and construction industries, (iii) employment is more persistent in larger firms, (iv) larger and more technological industries adjust their headcount more heavily to changes in wages and revenue and (v) Costa Rican labor demand is more sensitive to changes in wages but less to changes in production than similar economies.
- Migración de la banda cambiaria hacia un régimen de flotación administradaThis document describes the historical context of the exchange rate regime of Costa Rica up to January of 2015, as well as the opportunity to migrate to a more flexible exchange rate market. The document discusses the most relevant arguments that the authorities must take into consideration when making this type of decision. For example, we discuss the potential impact to Costa Ricans and the economic activity, and details on the legal implications of such a decision. Finally, we discuss the most appropriate communication strategies to let know the general population of a change like this.
- Misallocation and Productivity in Costa RicaThis paper documents the effect of resource misallocation on Costa Rica's aggregate total factor productivity (TFP) using the Hsieh and Klenow (2009) methodology. The model suggests theoretical TFP gains of around 50%-60% for the overall economy and 10%- 15% for the manufacturing sector when the United States' level of efficiency is used as a benchmark. Evidence of a deterioration in the efficiency of resource allocation over the period 2005-2015 was not found, and misallocation seems to be greater in the agricultural sector. Small and large firms face advantageous output distortions relative to medium-sized firms, and small firms tend to also face disadvantageous capital distortions. Furthermore, our results also suggest that small firms have experienced higher growth in both capital and output wedges. Finally, distortions create incentives for firms to exit the market and thwarts the entrance of new participants in an industry.
- Relación entre los precios de las materias primas y la inflación en Costa RicaThis paper analyzes empirically the relationship between the variations of international commodity prices and inflation in Costa Rica in the period from January 2000 to December 2021. The pass-through of the commodity prices to the consumer prices is analyzed through the supply chain using the consumer price index (IPC), the manufacture producer price index (IPP-MAN) and the commodity price index (IP-MPi). A recursive model of Autoregressive Vectors allows us to represent the relationship between these variables. The results indicate that the pass-through from commodity prices to inflation is small. For example, an increase of 10 percentage points in the variation of the prices of commodities in the international market will increase inflation on 0.27 p.p. after six months. The review of the relationship according to groups of items of the CPI that have or do not have regulated prices suggests that the pass-through to domestic prices occurs mainly on the group of goods and services with regulated price. In addition, there is evidence of heterogeneity in price response by subclasses of items.
- Responsible Sourcing? Theory and evidence from Costa RicaAlfaro-Ureña, Alonso; Faber, Benjamin; Cecile, Gaubert; Manelici, Isabela; Vásquez-Carvajal, José PabloCada vez es más común que empresas multinacionales (CMNs) impongan estándares de "Abastecimiento Responsable" (AR) a sus proveedores en todo el mundo, tales como requisitos sobre la retribución de los trabajadores, los beneficios y las condiciones laborales que le proporcionan a sus trabajadores. ¿Estas políticas son simplemente "palabras vacías" o tienen un impacto en los proveedores expuestos y sus trabajadores? ¿Cuál es la incidencia en el bienestar de AR en los países de abastecimiento? Para responder a estas preguntas, desarrollamos un modelo cuantitativo de equilibrio general de AR y lo combinamos con una base de datos única y reciente. En la teoría, mostramos que las implicaciones para el bienestar de AR son ambiguas, dependiendo de una interacción entre lo que es similar a un impuesto a la exportación (+) y una distorsión en el mercado laboral (-). Empíricamente, combinamos la casi totalidad de despliegue de códigos de AR por parte de filiales de CMNs en Costa Rica, del 2009 al 2019, con transacciones de empresa a empresa y con los microdatos de las empresas con sus respectivos empleados. Descubrimos que la implementación de AR conduce a reducciones significativas en las ventas de las empresas y en el empleo en los proveedores expuestos, un aumento en los salarios de los trabajadores inicialmente de bajos ingresos y una disminución en la proporción de empleo de bajos salarios. Luego, utilizamos los efectos estimados y los microdatos para calibrar el modelo y cuantificar contrafactuales de equilibrio general. Descubrimos que si bien las políticas de AR de las CMNs han generado ex ante ganancias significativas entre aproximadamente un tercio de los trabajadores de bajos salarios empleados en los proveedores expuestos, la mayoría de los trabajadores de bajos salarios pierden debido a efectos indirectos adversos en sus salarios y en el índice de precios domésticos.