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Behavioral economics: Past, present, and future
Richard H. Thaler

[Keywords: behavioral economics, human behavior, normative models, descriptive models, supposedly irrelevant factors; JEL: A12, B29, D91]

“Behavioral economics” attempts to incorporate insights from other social sciences, especially psychology, in order to enrich the standard economic model. The interest in the psychology of human behavior returns economics to its earliest roots. Adam Smith talked about such key concepts as loss aversion, overconfidence, and self-control. Nevertheless, the modern version of behavioral economics introduced in the 1980s met with resistance by some economists, who preferred to retain the standard neo-classical model. They introduced several arguments for why psychology could safely be ignored. In this essay I show that these arguments have been rejected, both theoretically and empirically, so it is time to move on. The new approach should include two different kinds of theories: normative models that characterize the optimal solution to specific problems and descriptive models that capture how humans actually behave. The latter theories will incorporate some variables I call supposedly irrelevant factors, which can improve the explanatory power of economic models.


Constitutional judge and presidential reelection in Latin America
Ernesto Cárdenas y Federico Corredor

[Keywords: presidential reelection, constitutional judge, presidentialism, principal agent model; JEL: D72, K00]

Constitutional provisions regarding presidential re-election have been modified in several Latin American countries in recent years. In some countries, these changes put the existence of democracy at risk. This article uses the principal-agent approach to analyze the role of the constitutional judge in presidential re-election as an accountability mechanism. It finds that immediate reelection in democracies of strong presidentialism can be a perverse mechanism that sharpens the concentration of power and deteriorates the welfare of the citizens instead of making politicians accountable.


Consumer sovereignty and freedom of choice in developing countries
Gonzalo Ruiz Díaz

[Keywords: consumer sovereignty, consumer protection, freedom of choice, regulation, free competition; JEL: D18, L49]

Based on Amartya Sen’s notions of freedom of process and opportunity, this article explain the necessary conditions for the operation of markets to have results compatible with the concept of consumer sovereignty formulated by Hutt. These conditions are linked to the development of the basic capacities of consumers, the promotion of markets with plural options and the access to consumer justice mechanisms. It also examines the role of the State in meeting these conditions in developing countries.


Value and money in Marx
Fahd Boundi Chraki [pdf]

[Keywords: value, money, monetization; JEL: B14, B24, E4]

The aim of this paper is to examine the link between Marx’s monetary theory and its explanation of value, production and circulation. For this, it presents the basic theoretical elements that allow a critique of the quantitative theory, the Chartalist conception of the genesis of money and the post-Keynesian theory of endogenous money. Then, from a Marxist perspective, it analyzes the controversial relationship between the monetization of public debt and the increase in the general level of prices.


Brexit, peace and Trump: lessons for economists
Mario García Molina y Liliana Alejandra Chicaíza[pdf]

[Keywords: Brexit, peace process, Trump, psychology, cognitive biases, decision making; JEL: A12, D84, D87, D91]

This essay analyzes three elections that had unexpected results: the exit of the United Kingdom from the European Union, the rejection of the peace agreement in Colombia and the election of Trump as president of the United States. It emphasizes three aspects: the predictions were made in a situation of uncertainty based on rules or conventions, the campaigns involved strong emotional elements and the results were affected by cultural factors (identity and religious) and not only economic ones. Standard economics omits such factors although it should take them into account.


Impact of mergers and acquisitions on the efficiency of banking in Colombia
Miguel Sarmiento, Hernando Mutis, Andrés Cepeda y Juan F. Pérez[pdf]

[Keywords: efficiency frontier, financial system, non-parametric methods, fusions and acquisitions; JEL: C14, G34, D24]

This article evaluates the efficiency of Colombian banking using nonparametric border models. The results indicate that there has been a gradual increase in efficiency and that the global financial crisis of 2008 affected this trend. Since 2009 there has been a rapid recovery of efficiency measures, except for cost efficiency. This suggests that, in the face of external shocks, the adjustment costs of banks are greater. Mergers and acquisitions contribute to the increase in banking efficiency.


Development, restructuring of public spending and public-private partnerships
Jesús Botero García y José García Guzmán[pdf]

[Key words: infrastructure, model DSGE, public spending, human capital; JEL: B22, E27, E60]

This paper analyzes the welfare effects of improvements in investment in education and infrastructure with public-private participation, in a fiscal framework of a small and open economy for the Colombian economy. A DSGE model is built where families make decisions on human capital and the government finances megaprojects by placing infrastructure bonds. The results suggest greater effects in the long-term adjustment and improvements in social welfare when public spending is focused on sectors with higher levels of employment and technological and innovation improvements are introduced.


Income and education in the Colombian rural sector
Jaime Tenjo Galarza y Carlos Alberto Jaimes[pdf]

[Keywords: labor economy, gender economy, human capital, abilities, choice of occupation, Agricultural labor markets; JEL: J16, J24, J43]

This article presents some estimates of income in the Colombian rural sector as a whole and for agriculture and the rest of the sector. The results indicate that in the rural sector there is a high segmentation by gender and that the returns to education are very low, especially in agriculture. One hypothesis to explain these low returns is the lack of complementary factors such as access to land, technical assistance and public goods in general.


Disparities in regional development in Tamaulipas, Mexico
Ramiro Esqueda Walle[pdf]

[Keywords: spatial data analysis, spatial polarization, local development, spatial/ territorial disparities; JEL: C49, R12, R58]

In a period of consolidation of the economic and commercial opening of the Mexican economy, initiated in the mid-eighties, this work empirically analyzes the conglomeration of local-municipal development in Tamaulipas, a “successful” state in this process. It attempts to answer the following questions: Is there a pattern of spatial concentration of development at the intermunicipal level? Does the distribution of development show a spatially significant conglomeration? Has it been modified in the period analyzed? The evidence suggests that a regime of winning and losing municipalities has been configured that seems to move from a north-south to a center-periphery pattern.


The effects of social capital on employment in Mexico
Humberto Charles Leija, Aldo Josafat Torres García y David Castro Lugo[pdf]

[Keywords: social capital, social networks, Facebook, Twitter, internet, job search; JEL: J64, Z13]

This article explores the influence of physical and electronic social networks on the labor market, using data from the Self-Reported Welfare Survey for Mexico in 2014. Social capital has a positive influence on the employment situation of individuals. Having more than three friends decreases the probability of being unemployed between 1,1 and 1,8%; while the family network and electronic social networks are not significant. The results suggest that family capital is a kind of “unemployment insurance” and that friends provide information about vacancies and salaries.


Is Panama on a sustainable development path?
Manuel A. Zambrano Monserrate, María Alvarado Sánchez, Maria González Sánchez, Karen Rivas Ávila y Marola Beltrán Mora[pdf]

[Keywords: energy, ARDL, economic growth, Panamá; JEL: Q56, Q53, C51, C22]

This article examines the long-term relationship between CO2 emissions, GDP and energy consumption in Panama during the period 1971-2011 through an autoregressive model of distributed delays to verify the cointegration of variables in the long term. The results confirm the presence of an environmental Kuznets curve and that CO2 emissions and energy consumption from primary sources do not affect economic growth and that environmental degradation increases with energy consumption. Finally, it makes some policy recommendations.




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