Production efficiency is usually assumed in microeconomic theory. In particular, a single production function is supposed to exist for all producers in the industry. Output may be random due to variation in the levels of uncontrollable inputs (e.g. weather in agricultural production; power failures in industry); however expected value of output is identical for decision-makers using the same input bundle. Further, in general it is assumed that producers equate marginal rates of transformation (either factor-factor, factor-product or product-product) to relevant price ratios.

I estimate that this year the Gross Domestic Product will grow by 7 percent and inflation will not exceed 2 percent. Between May 1996 and May 1997, 500,000 new jobs were created. This signifies economic growth with monetary stability. Few countries in Latin America, and perhaps in the world, can boast such a strong performance. In particular, this increase in GDP will be a consequence, in relative terms, of a strong recovery in investment and the expansion of exports and imports.

This paper shows how rural-urban migrations can affect trade policy determination in the presence of a government that places special emphasis on the welfare of urban workers, thus generating increasing political returns in moving to the urban sector, and how the distribution of land and the associated rural workers' productivity can affect workers' decisions to migrate.

In exchange rate-based stabilization programs, credibility often follows a distinct time pattern. At first it rises as the highly visible nominal anchor provides a sense of stability and hopes run high for a permanent solution to the fiscal problems. Later, as the domestic currency appreciated in real terms and the fiscal problems are not fully resolved, the credibility of the program falls, sometimes precipitously. This paper develops a political-economy model that focuses on the evolution of credibility over time, and is consistent with the pattern just described.

High inflation economies often exhibit stop-go cycles of inflation, rather than smooth inflationary processes. This paper relates these stop-go episodes of inflation to a political cycle: the government can try to repress inflation until after the elections in order to increase the chances of being re-elected. This is modeled as a two-period game of incomplete information where voters try to pick the most competent government, and inflation (which signals a lack of competence) can be lowered by the government in the short run through foreign debt accumulation.

In this paper, we examine a conditional version of the international capital asset pricing model (ICAPM) allowing for a time and state varying factor of proportionality or beta. Betas are allowed to change with an unobserved state variable. Return variances differ across the different states so that betas differ on account of differences in variance regimes of the return series. This method allows us to accommodate a non-linear relationship between returns and variances. For six markets, we find that the world beta is a non-linear function of domestic volatility.

¿Cómo se mide el riesgo país? ¿Quién mide este riesgo? ¿Qué efectos tiene la calidad de esa medición sobre el costo y el nivel de acceso a los mercados de capitales internacionales? ¿Cómo se evalúa el riesgo de Argentina? ¿Qué medidas de política económica se pueden tomar para disminuir el riesgo país? Estas son las preguntas que trataremos de responder en este trabajo, con particular énfasis en los factores que determinan la calificación que tiene Argentina con las principales calificadoras de riesgo y los elementos que pueden llevar a una mejora de esa calificación.

Tanto en el lenguaje natural como en los lenguajes científicos, explique se usa en varios sentidos. A la pregunta general "¿qué es una explicación?" respondemos, por ejemplo, "explicar es hacer desaparecer la perplejidad"; o bien, "explicar un fenómeno es dar a conocer sus causas"; o bien, "explicar es crear conocimientos, a partir de datos"; o "bien, reducir un fenómeno no comprendido a fenómenos comprendidos".

En  épocas recientes han surgido con frecuencia análisis relativos a la aparición del fenómeno de la desindustrialización. Con este término se suele hacer referencia al rol declinante que ha venido asumiendo la industria como creadora de empleos en las economías desarrolladas. Pero, en tales economías este es un fenómeno que ha estado presente desde la década del setenta.