Browsing by Author "Rojas-Sánchez, Mario Alfredo"
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- La Curva de Phillips en Costa RicaMuñoz-Salas, Evelyn; Rojas-Sánchez, Mario Alfredo; Sáenz-Castegnaro, Manrique; Tenorio-Chaves, EdwinThe main objective of this investigation is to estimate an Expectations Augmented Phillips Curve function with the error correction mechanism, applying the Engle and Granger’s two step method. This exercise was done before with annual data (Rojas, 2002) but the parameters were estimated with low precision. In this occasion, the model is estimated with quarterly data, for the period 1991.01 to 2001.04, with an econometric technique that restricts the long run behavior of the endogenous variable to converge to their cointegrating relationships (static) while allowing for short run adjustment dynamics. The main results allow us to infer that more than 90% of the domestic inflation rate’s behavior is explained as a function of the nominal devaluation rate, the external inflation rate, the output gap and the lagged domestic inflation rate. Also, the forecasting obtained with the this model one quarter ahead, had the best adjustment with respect other models (AR and no change)
- Deuda y los efectos de la política fiscal: evaluación de vulnerabilidades para la economía costarricenseThis paper analyses the situation of the Costa Rican public debt to identify its main vulnerabilities and the risks in the absence of a fiscal reform agreement in order to increase both the tax incomes and the primary surplus. Currently, this issue is very important because the Central Bank of Costa Rica will implement, in the medium term, the Inflation Targeting Regime to control in a better way the money aggregates to get the colon stability and to reduce the inflation rate. The baseline scenario results of the simulation exercises with the Fiscal Sustainability Model of the Central Bank of Costa Rica show that the public debt dynamics is sustainable, assuming that the exogenous variables and the primary surplus maintain its historical values (average of the last ten years), during the horizon of projection . However, the relative high level of the public debt made Costa Rica particularly vulnerable to adverse shocks, so an approval of the fiscal package is needed to strengthen the public finances and to reduce the unsustainability risks of the public debt dynamics.
- Estimación de una función de producción para Costa Rica: periodo 1991Q1-2006Q4This paper estimates a Cobb-Douglas production function with constant returns of scale for the Costa Rican economy. The sample of quarterly data is 1991Q1-2006Q4 and the econometric methodology applied was Dynamic Ordinary Least Squares. According with the results, it is not possible to reject the null hypothesis of constant returns of scale and the product’s elasticity to changes in capital stock and labor are 0.35 and 0.65 respectively. Based on this parameters and the long run utilization level of the production inputs, a series of potential output was estimated being its average annual growth 4.4%.
- Estimación del producto potencial para Costa Rica: periodo 1991-2006This paper shows a range of methodologies to estimate the potential output that have not been explored for the Costa Rican economy, additionally we improve others that have been already tried. We also offer statistical criteria to evaluate the forecast capacity of inflation of the different measures of output gap. Among the main results we have that most of the non-structural measures of output gap outperform structural ones such as production function and structural VAR in statistical significance and forecast capacity in a context of a forward looking Phillips Curve. In addition, the empirical evidence allows us to conclude that the output gap is a better indicator of demand pressures than the rate of growth of the observed GDP.
- Implementación del Modelo RMSM-X para Costa Rica: Principales aspectos metodológicos del módulo RXAzofeifa-Villalobos, Ana Georgina; Barquero, Luvy; Blanco, Carlos; Porras, Daniel; Rodríguez, Mayra; Rojas-Sánchez, Mario AlfredoThis paper shows the interinstitutional group’s advances of the implementation process of the World Bank’s economic structural model, known as Revised Minimum Standard Model Extended (RMSM-X). The interinstitutional group is conformed by members of the staff of Banco Central de Costa Rica, Ministerio de Hacienda and Consejo Monetario Centroamericano. The document presents the main technical and conceptual aspects of the model and makes an extensive review of the basic data in order to adequate it to the guidelines of the accounting framework of the recent versions of international standards of macroeconomic statistics. The RMSM-X model is built up in electronic sheets of Excel and it is designed for simulation exercises. In addition, this model is useful in forecasting, monitoring and for the analysis of financial flows in developing economies. Specifically, the basic model contains four economic agents or sectors: Public, Private, Financial and Foreign. In addition, the model forecasts detailed trade accounts and foreign debt flows and stocks, so it can be used to produce a comprehensive outlook for any developing country. With the appropriate adaptations for Central American economies, the model will be used by the Central Banks and Ministers of Finance for macroeconomic consistency, policy making and forecasting, under the guidance of the Consejo Monetario Centroamericano and the technical assistance of the World Bank.
- Modelo Macroeconómico de Pequeña Escala para Costa RicaA small scale macroeconomic model (SSMM) was devised and estimated as part of the modernizing process of the Monetary Program of the Central Bank of Costa Rica. The SSMM is intended to enhance the knowledge of the transmission channels of the monetary policy actions designed to achieve external an internal stability of the domestic currency. The SSMM is intended also for short and medium run forecasting under different scenarios. This document describes a theoretical model with four behavioral equations to estimate: the inflation (Phillips Curve augmented with expectations), the real gross domestic product growth rate (Aggregate Demand function), the change in net foreign reserves, and nominal interest rate (Central Bank’s reaction function). Cointegration analysis and error corrections models are applied to obtain the parameters of some of the equations. The frequency of the data is quarterly from 1991:01 to 2004:01. This document also include a forecast evaluation, simulations of shocks to policy variables (interest rate, exchange rate), and some exogenous variables such as international interest rate, United States growth rate and terms of trade.
- Posición Financiera Neta del Sector Público Global : Aspectos metodológicos y ejercicios de simulaciónWe examine the evolution of the Public Sector net financial worth during 1999-2002, and forecast its path over the rest of the present decade under different economic scenarios. By looking at the net financial worth components, we are able to explain changes in public debt due to balance sheet recomposition and those related to fiscal deficit financing. In addition, we are able to assign different rates of return to different assets and liabilities.This analysis and the projections thereby obtained will be useful in future fiscal policy sustainability studies. Moreover, by producing public debt and fiscal deficit forecasts that are consistent with each other, these projections will prove a valuable input in the elaboration and revision of the Central Bank MonetaryProgram.Assuming that Public Sector primary surplus stays constant as a proportion of GDP at 2003 forecasted levels, that international interest rates increase only gradually over the next seven years, and that GDP growth converges to a 3.5% annual growth rate, our baseline simulations forecast a stable path for thepublic to GDP ratio (at 49%). However, our simulations also indicate that the Public Sector solvency condition is highly vulnerable to increases in real interest rates and lower GDP growth, given the currently high debt to GDP ratio.
- Reformulación de la función de demanda agregada por producto interno para Costa Rica: Aplicación del mecanismo de corrección de erroresThe objective of this paper is to estimate a new specification for the aggregate demand function for domestic product (IS Curve) to improve its forecasting capacity in the Small Scale Macroeconomic Model of the Central Bank of Costa Rica. Since, Costa Rica is a small and open economy, the strategy followed to estimate this function consisted in exploring, in the first place, the effect of external variables over the domestic product, and later evaluate the significance of some domestic variables. We develop an error correction model to take into account the relationship between short and long run. The main results of the estimation indicate that there is an economic and statistically significant effect between the external variables over de aggregate demand. In fact, the empirical evidence suggest a positive and significant effect of the US’s output growth and terms of trade, while there is a negative effect of the real external interest rates over the domestic product. On the other hand, the estimation indicates that there are significant effects of the domestic variables such as the real domestic interest rates and the real exchange rate. Finally, the empirical evidence suggest a negative long run effect of the fiscal deficit over the domestic product behavior, related with the crowding out effect of the public sector financial need’s on the private sector decisions for investment and consumption.