Browsing by Autor "Paola L. Montero Ledezma"

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THE GROWTH OF WORLD TRADE: THE ROBUSTNESS OF THE EVIDENCE
(Federal Reserve Bank of St. Louis, 2017) Paola L. Montero Ledezma
In this work we revisit the seminal paper "The growth of world trade: tariffs, transport costs, and income similarity" by S. Baier and J. Bergstrand published in the Journal of International Economics (2001). We develop a rigorous econometric analysis of the robustness of their results. While our findings support Baier and Bergstrand 2001â€™s general conclusions, we provide refined evidence of the results. Under robust estimators, we show that the presence of outliers overestimated the effect of trade liberalization and underestimated the effect of income growth, as sources of world trade growth in the second half of the past century.
THE GROWTH OF WORLD TRADE: THE ROBUSTNESS OF THE EVIDENCE
(2017) Paola L. Montero Ledezma
In this work we revisit the seminal paper “The growth of world trade: tariffs, transport costs, and income similarity” by S. Baier and J. Bergstrand published in the Journal of International Economics (2001). We develop a rigorous econometric analysis of the robustness of their results. While our findings support Baier and Bergstrand 2001’s general conclusions, we provide refined evidence of the results. Under robust estimators, we show that the presence of outliers overestimated the effect of trade liberalization and underestimated the effect of income growth, as sources of world trade growth in the second half of the past century.
THE ROLE OF POLITICS IN FINANCIAL CRISES IN EMERGING MARKETS
(2019) Paola L. Montero Ledezma
In this paper, we embed the key political mechanisms, specific to developing countries, into a political-economic model of financial crises. In this setup, financial market failures allow opportune government intervention to restore optimal allocation of resources. However, bad public policies could provoke financial crises. We find that the political interests and individuals’ 1-dimensional heterogeneity, in terms of productivity, lead to different preferred policies between the median-productive and mean-productive economic agents, which might in turn induce to bad public intervention. Therefore, the larger the difference between these two reference individuals, the higher the probability of financial crises. We also discuss some features of the financial crises in Argentina (2001-2002) and its similarities with our model.