Investigación Económica

LAND TITLING AND HOUSEHOLD LABOR SUPPLY: EVIDENCE FROM MEXICO

Luciano Ayala Cantú — 2025-02-04

This paper uses a panel dataset of rural households and the roll-out of a nationwide land titling program in Mexico to explore the impact of tenure security on household labor supply. The results of this paper suggest that land titling decreased the number of hours in wage employment, but did not affect labor supply in own-farm agriculture. Moreover, cultivated land increased with the certification program. Suggestive evidence shows that the certification program reduced the number of children working on their own farms. The results are robust to several specifications and support the parallel trends hypothesis.

GOVERNMENT SPENDING PERFORMANCE AND SOCIAL DEPRIVATION AT THE SUBNATIONAL LEVEL, 2014-2022

Edson Valdés Iglesias — 2025-02-04

Part of the empirical literature indicates that government provision of health, education and basic infrastructure have positive effects on social deprivation reduction; however, there is a need to analyze the efficiency in the achievement of this purpose. Therefore, the objective of this research is to determine whether human resources in the education and health sectors, and public spending on social infrastructure, education and health have efficiently reduced vulnerability due to social deprivation at the subnational level from 2014 to 2022 in Mexico. Data envelopment analysis with undesirable products and a slack-based efficiency measure were used to characterize efficiency levels, both showed regional and temporal differences. Additionally, the importance of each category of government spending and human resources was determined through a neural network, concluding that the resources allocated to secondary and higher education are the most important in determining state-level efficiency when the aim is to reduce social deprivation.

CURRENCY CYCLES OF THE MAJOR WORLD CURRENCIES

Carlo D’Ippoliti — 2025-02-04

Post-Keynesians emphasize the importance of monetary and financial trends in shaping outcomes in real markets. Recent debates focus on emerging or developing countries and typically consider financial dynamics as driven by exogenous factors (often volatile ones, implying ‘cycles’ only in a loose, non-geometrical sense). By contrast, in this work we formalize a model of endogenous currency cycles, which cause a key currency to move persistently in one direction over extended periods of time, and then to endogenously switch direction.

The model is inspired by Biasco (1987), who provides a detailed conceptual framework but stopped short of developing a model. In his analysis, capital flows are at least partly motivated by expectations of GDP growth. In turn, inflows of capital determine appreciations of the exchange rate, which negatively impacts on GDP growth. The interaction of these two variables endogenously produces a cyclical dynamic —which could be reinforced (or rather complemented in the short run) by endogenous reactions of monetary policy, and the interaction of fundamental and momentum traders. Time series evidence for the main four reserve currencies (US dollar, euro, yen, and GBP) suggests that the model applies to large, “key” currencies of the richer economies.

INFLATION INEQUALITY IN MEXICO, 2015-2023

Cinthia Márquez Moranchel — 2025-02-04

The objective of this research is to analyze, at a national level, inflation per household by income deciles and by socioeconomic characteristics for the period 2015-2023. The methodology is based on the estimation of democratic consumer price indices that are characterized by maintaining the same price structure of the National Consumer Price Index (NCPI) with an expenditure weighting that gives equal weight to each household. The heterogeneity of inflation is substantial; households with more members, in rural areas, renters and with a man as head of household, indigenous, with low education and without affiliation to a health institution face higher inflation, reflecting the diversity of household spending patterns and income differences. The inequality of inflation is expressed in an accumulated manner in poor households, which is 6.5% higher than in rich households.

PERCEPTION OF PUBLIC INSECURITY AND HOUSING PRICES IN MEXICO

Víctor Manuel Cuevas Ahumada — 2025-02-04

This paper evaluates the impact of the perception of public insecurity on housing prices in Mexico. To that end, two dynamic panel data models involving 27 Mexican cities are assembled. The first model corresponds to the pre-pandemic period, while the second to the pandemic period. The specification of the model is based on a supply- and demand-side approach, whereas its estimation relies on the Arellano-Bond technique to address endogeneity problems. The evidence is consistent in showing that: 1) Housing prices fall as the perception of public insecurity rises, and 2) higher construction costs and income levels raise home prices. Moreover, the provision of public infrastructure and the real mortgage interest rate generate demand- and supply-side effects, so the net effect of these two variables on housing prices is negative before the pandemic and positive during the pandemic. Finally, housing prices involve a strong inertial component.

EXPORT DYNAMICS, VALUE CHAINS AND INDUSTRIALIZATION PATTERNS IN MEXICO AND SOUTH KOREA, 1995-2020

Heri Oscar Landa Díaz — 2025-02-04

The aim of this paper is to examine, through a panel model, the impact of integration into global value chains (GVCs) on industrial development (13 manufacturing subsectors) in Mexico and South Korea during the period 1995-2020. The main findings indicate that: i) offshoring promotes positive effects on industrial performance, although those effects are more relevant for South Korea; ii) the position within GVCs determines the internalization of the dynamic gains associated with openness; iii) the inflation targeting and wage deflation model, in the absence of an effective industrial policy, has contributed to slowdown productivity and output growth. Hence we conclude that the nature of Mexico’s industrial specialization pattern constitutes a determining element of the observed low drag and dispersion potential of the manufacturing sector.

ON THE NEED FOR FORWARD-LOOKING POLICYMAKING: AN ECUADORIAN CASE

Leopoldo Gómez Ramírez — 2025-02-04

While allowing the refiling of taxes in the case of legitimate mistakes is reasonable, there is empirical evidence showing that the unlimited ability to refile may incentivize evasion. However, theoretical models examining limiting unlimited refilings are nonexistent. Therefore, this paper develops a model to study the role of allowing an unlimited number of tax refilings on the behavior of taxpayers that received tax notifications because they under-reported taxes, as it was seen in the case of Ecuador between 2010 and 2012. Among other things, the key finding of the examination is that, if taxpayers are allowed to refile as many times as they want, the best decision for selfish taxpayers is to evade taxes. Contributing to the tax compliance literature but from a broader perspective as well, this paper demonstrates the importance of considering behavior through careful theoretical analysis before implementing new tax policies.

NOTE EDITORIAL

Sara María Ochoa León — 2025-02-04