http://www.bis.org/cbhub/list/country/country_peru/index.rss Latest research hub papers from Peru en http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-12-2012.pdf Central Reserve Bank of Peru Working Papers by Diether W. Beuermann, Christopher McKelvey and Carlos Sotelo Lopez The Effects of Mobile Phone Infrastructure: Evidence from Rural Peru 2012-04-25T12:37:59Z We exploit the timing of cell phone coverage in rural Peru to investigate its effects on economic development. We exploit information regarding the location, date of installation and technical characteristics of cell phone towers in order to construct coverage patterns at the village level from 2001 through 2007. We then merge this information with national household surveys spanning the same period. Estimates suggest an increase of 7 percentage points in the likelihood of self reported cell phone ownership after coverage, an increase of 7.5 percent in yearly household expenditures, and a 13.5 percent increase in the value of assets. The Effects of Mobile Phone Infrastructure: Evidence from Rural Peru 2012-04-25T12:37:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-12-2012.pdf Diether W. Beuermann Carlos Sotelo Lopez Christopher McKelvey Diether W. Beuermann, Christopher McKelvey and Carlos Sotelo Lopez 2012-04 Central Reserve Bank of Peru Working Papers O1 O3 Q13 Q16 http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-11-2012.pdf Central Reserve Bank of Peru Working Papers by Diego Winkelried and Miguel Angel Saldarriaga Trade linkages and growth in Latin America: A time-varying SVAR approach 2012-04-25T12:37:59Z This paper examines how shocks originated in large economies around the globe have transmitted to the growth rates of Latin American countries. For this purpose, a highly parsimonious structural VAR model - identified through bilateral trade linkages - is proposed, tested, estimated and simulated. Since trade weights evolve through time, the effect of shocks are time-varying. Thus, we are able to quantify how growth in the region has been affected by tighter trading linkages with fast-growing emerging economies, and how it has responded to a new world trade structure, featuring China as a major player. It is found that about half of the vigourous growth reported in Latin American countries by the end of the 2000s can be attributed to (direct and especially indirect) multiplier effects induced by the spectacular growth of the Chinese economy over the same period. Trade linkages and growth in Latin America: A time-varying SVAR approach 2012-04-25T12:37:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-11-2012.pdf Diego Winkelried Miguel Angel Saldarriaga Diego Winkelried and Miguel Angel Saldarriaga 2012-04 Central Reserve Bank of Peru Working Papers C32 C50 E32 F44 O54 http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-09-2012.pdf Central Reserve Bank of Peru Working Papers by Philippe Bacchetta, Kenza Benhima and Yannick Kalantzis Capital Controls with International Reserve Accumulation: Can this Be Optimal? 2012-04-25T12:37:59Z Motivated by the Chinese experience, we analyze a semi-open economy where the central bank has access to international capital markets, but the private sector has not. This enables the central bank to choose an interest rate different from the international rate. We examine the optimal policy of the central bank by modelling it as a Ramsey planner who can choose the level of domestic public debt and of international reserves. The central bank can improve savings opportunities of credit-constrained consumers modelled as in Woodford (1990). We find that in a steady state it is optimal for the central bank to replicate the open economy, i.e., to issue debt financed by the accumulation of reserves so that the domestic interest rate equals the foreign rate. When the economy is in transition, however, a rapidly growing economy has a higher welfare without capital mobility and the optimal interest rate differs from the international rate. We argue that the domestic interest rate should be temporarily above the international rate. We also find that capital controls can still help reach the first best when the planner has more fiscal instruments. Capital Controls with International Reserve Accumulation: Can this Be Optimal? 2012-04-25T12:37:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-09-2012.pdf Philippe Bacchetta Kenza Benhima Yannick Kalantzis Philippe Bacchetta, Kenza Benhima and Yannick Kalantzis 2012-04 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-07-2012.pdf Central Reserve Bank of Peru Working Papers by Arturo Ormeño Using Survey Data on Inflation Expectations in the Estimation of Learning and Rational Expectations Models 2012-02-22T09:31:59Z Do survey data on inflation expectations contain useful information for estimating macroeconomic models? I address this question by using survey data in the New Keynesian model by Smets and Wouters (2007) to estimate and compare its performance when solved under the assumptions of Rational Expectations and learning. This information serves as an additional moment restriction and helps to determine the forecasting model for inflation that agents use under learning. My results reveal that the predictive power of this model is improved when using both survey data and an admissible learning rule for the formation of inflation expectations. Using Survey Data on Inflation Expectations in the Estimation of Learning and Rational Expectations Models 2012-02-22T09:31:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-07-2012.pdf Arturo Ormeño Arturo Ormeño 2012-02 Central Reserve Bank of Peru Working Papers C11 D84 E30 E52 http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-05-2012.pdf Central Reserve Bank of Peru Working Papers by Erick Lahura Measuring the Effects of Monetary Policy Using Market Expectations 2012-01-25T06:21:00Z In order to quantify the effects of monetary policy, this paper employs an alternative empirical measure of monetary policy shocks based on market expectations obtained from media and survey information in Peru. Using monthly data for the period 2003-2011, we use the proposed measure as a source of exogenous variation in monetary policy and evaluate its dynamic impact on output and prices. The results show a coherent picture of the effects of monetary policy compared to alternative approaches in terms of both the magnitude and the timing of the effects. Measuring the Effects of Monetary Policy Using Market Expectations 2012-01-25T06:21:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-05-2012.pdf Erick Lahura Erick Lahura 2012-01 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-02-2012.pdf Central Reserve Bank of Peru Working Papers by Hugo Vega Financial Frictions and the Interest-Rate Differential in a Dollarized Economy 2012-01-18T06:21:00Z This paper presents a partial equilibrium characterization of the credit market in an economy with partial ?financial dollarization. Financial frictions, in the form of costly state veri?cation and banking regulation restrictions, are introduced and their impact on lending and deposit interest rates denominated in domestic and foreign currency studied. The analysis shows that reserve requirements act as a tax that leads banks to decrease deposit rates, while the wedge between foreign and domestic currency lending rates is decreasing in exchange rate volatility and increasing in the degree of correlation between entrepreneur?s returns and the exchange rate. Financial Frictions and the Interest-Rate Differential in a Dollarized Economy 2012-01-18T06:21:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-02-2012.pdf Hugo Vega Hugo Vega 2012-01 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-03-2012.pdf Central Reserve Bank of Peru Working Papers by Ruy Lama and Carlos Urrutia Employment Protection and Business Cycles in Emerging Economies 2012-01-18T06:21:00Z We build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in recessions. In a quantitative version of the model calibrated to the Mexican economy we find that reducing separation costs to a level consistent with developed economies would reduce output volatility by 15 percent. We also use the model to analyze the Mexican crisis episode of 2008 and conclude that an economy with lower separation costs would have experienced a smaller drop in output and in measured total factor productivity with no significant change in aggregate employment. Employment Protection and Business Cycles in Emerging Economies 2012-01-18T06:21:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-03-2012.pdf Ruy Lama Carlos Urrutia Ruy Lama and Carlos Urrutia 2012-01 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-04-2012.pdf Central Reserve Bank of Peru Working Papers by César Carrera Estimating Information Rigidity using Firms' Survey Data 2012-01-18T06:21:00Z The slope of the sticky information Phillips curve proposed by Mankiw and Reis (2002) is based on the degree of information rigidity on the part of firms. Carroll (2003) uses an epidemiology model of expectations and finds evidence for the U.S. of a one-year lag in the transmission of information from professional forecasters to households. Using financial institutions? and firms? survey data from Peru and the model proposed by Carroll, I estimate the degree of information rigidity for the Peruvian economy. This paper also considers heterogeneous responses and explores the cross-sectional dimension of these survey forecasts. I find that the degree of information stickiness is such that it takes between one and three quarters for updating information, a result that is robust to different specifications. Estimating Information Rigidity using Firms' Survey Data 2012-01-18T06:21:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2012/documento-de-trabajo-04-2012.pdf César Carrera César Carrera 2012-01 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-22-2011.pdf Central Reserve Bank of Peru Working Papers by Rocio Gondo and Fabrizio Orrego Dedollarization and financial robustness 2011-12-30T06:21:00Z This paper evaluates the qualitative and quantitative implications of financial dedollarization of firms' liabilities on real aggregates in a small open economy model. We extend the standard Cespedes, Chang, and Velasco (2004) model by allowing entrepreneurs borrow in both foreign and domestic currency so as to finance firms' capital needs. A real depreciation reduces the value of firms' net worth whenever there is a currency mismatch in their balance sheets. Under flexible exchange rates, a lower degree of dollarization lessens the negative impact on output and investment, since there is a smaller increase in the cost of external borrowing. The quantitative results show that the balance sheet channel accounts for about 70 percent of the output and investment drop in Peru following the Russian Crisis, and a reduction in debt dollarization would have reduced output drop in 0.9 percentage points of GDP. Dedollarization and financial robustness 2011-12-30T06:21:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-22-2011.pdf Rocio Gondo Fabrizio Orrego Rocio Gondo and Fabrizio Orrego 2011-12 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-19-2011.pdf Central Reserve Bank of Peru Working Papers by Erick Lahura and Marco Vega Wavelet-based Core Inflation Measures: Evidence from Peru 2011-12-21T12:39:59Z Under inflation targeting and other related monetary policy regimes, the identification of non-transitory in ation and forecasts about future inflation constitute key ingredients for monetary policy decisions. In practice, central banks perform these tasks using so-called "core inflation measures". In this paper we construct alternative core inflation measures using wavelet functions and multiresolution analysis (MRA), and then evaluate their relevance for monetary policy. The construction of wavelet-based core inflation measures (WIMs) is relatively new in the literature and their assessment has not been addressed formally, this paper being the first attempt to perform both tasks for the case of Peru. Another main contribution of this paper is that it proposes a VAR-based long-run criterion as an alternative criteria for evaluating core inflation measures. Evidence from Peru shows that WIMs are superior to official core inflation in terms of both the proposed criterion and forecast-based criteria. Wavelet-based Core Inflation Measures: Evidence from Peru 2011-12-21T12:39:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-19-2011.pdf Marco Vega Erick Lahura Erick Lahura and Marco Vega 2011-12 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-17-2011.pdf Central Reserve Bank of Peru Working Papers by Ingo Outes, Catherine Porter, Alan Sanchez, Javier Escobal Early Nutrition and Cognition in Peru: A Within-Sibling Investigation 2011-12-20T12:37:59Z An extensive literature documents linkages between early nutritional deficiencies and reduced cognitive ability, educational attainment and, ultimately, lower labor market performance. Few of these studies, however, have shown these correlations to be genuinely causal. We reexamine the nutrition and cognition link, applying instrumental variable methods to a sibling-difference specification for a sample of Peruvian pre-school children. We use household shocks and food price changes as instruments. As such our analysis also quantifies the nutritional and cognitive costs of the 2006-08 global food price crisis. We find that there are significant and negative cognitive effects of early childhood nutritional disinvestments: a decrease in Height-for-Age z-score leads to a reduction in the Peabody Picture Vocabulary Test score of 17-21 percent. The accumulated deficits are sizeable considering that these children are only 3-6 years old and are yet to enroll in formal schooling, with deficits likely to widen in later years. Early Nutrition and Cognition in Peru: A Within-Sibling Investigation 2011-12-20T12:37:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-17-2011.pdf Javier Escobal Alan Sanchez Catherine Porter Ingo Outes Ingo Outes, Catherine Porter, Alan Sanchez, Javier Escobal 2011-12 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-18-2011.pdf Central Reserve Bank of Peru Working Papers by Erick Lahura An Empirical Analysis of the Credit-Output Relationship: Evidence from Peru 2011-12-20T12:37:59Z This paper investigates the empirical relationship between credit and output in Peru. The analysis is based on the estimation of vector error correction models and the identification of structural shocks. The models considered include real output, real credit growth (in domestic currency, foreign currency and both), and terms of trade. Using quarterly data for the period 1994-2011, the results suggest that real credit growth contain useful information to understand the evolution of the non-deterministic component of real output. In particular, the results show that: (i) there exist a stable long-run relationship between real credit growth, output and terms of trade, (ii) real credit growth is useful in forecasting output in the long-run, and (iii) a structural permanent shock in real credit has positive permanent effects on output. Therefore, credit aggregates could be useful as indicator variables for policymakers. An Empirical Analysis of the Credit-Output Relationship: Evidence from Peru 2011-12-20T12:37:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-18-2011.pdf Erick Lahura Erick Lahura 2011-12 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-14-2011.pdf Central Reserve Bank of Peru Working Papers by Fabrizio Orrego Sequential incompleteness and dynamic suboptimality in stochastic OLG economies with production 2011-08-03T06:21:59Z I study a stochastic overlapping generations model with production and three-period- lived agents. Agents trade bonds and risky capital. Unlike the two-period model, I show that a stationary equilibrium in which prices and allocations depend solely on the aggregate capital stock and the current shock does not exist. The recursive equilibrium becomes the relevant equilibrium concept. For the recursive formulation of the model, markets are sequentially incomplete and hence I show that there is room for Pareto improvements in terms of intergenerational risk sharing. Finally, I examine whether the introduction of capital income taxation improves the allocation of risk. Sequential incompleteness and dynamic suboptimality in stochastic OLG economies with production 2011-08-03T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-14-2011.pdf Fabrizio Orrego Fabrizio Orrego 2011-08 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-13-2011.pdf Central Reserve Bank of Peru Working Papers by Fabrizio Orrego Habit formation and sunspots in overlapping generations models 2011-08-03T06:21:59Z I introduce habit formation into an otherwise standard overlapping generations economy with pure exchange populated by three-period-lived agents. Habits are modeled in such a way that current consumption increases the marginal utility of future consumption. With logarithmic utility functions, I demonstrate that habit formation may give rise to stable monetary steady states in economies with hump-shaped endowment pro?les and reasonably high discount factors. Intuitively, habits imply adjacent complementarity in consumption, which in turn helps explain why income effects are sufficiently strong in spite of logarithmic utility. The longer horizon further strengthens the income effect. Finally, I use the bootstrap method to construct stationary sunspot equilibria for those economies in which the steady state is locally stable. Habit formation and sunspots in overlapping generations models 2011-08-03T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-13-2011.pdf Fabrizio Orrego Fabrizio Orrego 2011-08 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-12-2011.pdf Central Reserve Bank of Peru Working Papers by Diego Winkelried Exchange rate pass-through and inflation targeting in Peru 2011-08-03T06:21:59Z It has been widely documented that the exchange rate pass-through to domestic inflation has decreased significantly in most of the industralised world. As microeconomic factors cannot completely explain such a widespread phenomenon, a macroeconomic explanation linked to the inflationary environment - that a low and more stable inflation rate leads to a decrease in the pass-through - have gained popularity. Using a structural VAR framework, this paper presents evidence of a similar decline in the pass-through in Peru, a small open economy that gradually reduced inflation to international levels in order to adopt a fully-fledged inflation targeting scheme in 2002. It is argued that the establishment of a credible regime of low inflation has been instrumental in driving the exchange rate pass-through down. Exchange rate pass-through and inflation targeting in Peru 2011-08-03T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-12-2011.pdf Diego Winkelried Diego Winkelried 2011-08 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-11-2011.pdf Central Reserve Bank of Peru Working Papers by Alberto Cavallo and Roberto Rigobon The Distribution of the Size of Price Changes 2011-07-02T06:21:59Z Different theories of price stickiness have distinct implications on the number of modes in the distribution of price changes. We formally test for the number of modes in the price change distribution of 36 supermarkets, spanning 22 countries and 5 continents. We present results for three modality tests: the two best-known tests in the statistical literature, Hartigan's Dip and Silverman's Bandwidth, and a test designed in this paper, called the Proportional Mass test (PM). Three main results are uncovered. First, when the traditional tests are used, unimodality is rejected in about 90 percent of the retailers. When we used the PM test, which reduces the impact of smaller modes in the distribution and can be applied to test for modality around zero percent, we still reject unimodality in two thirds of the supermarkets. Second, category-level heterogeneity can account for about half of the PM test's rejections of unimodality. Finally, a simulation of the model in Alvarez, Lippi, and Paciello (2010) shows that the data is consistent a combination of both time and state-dependent pricing behaviors. The Distribution of the Size of Price Changes 2011-07-02T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-11-2011.pdf Alberto Cavallo Roberto Rigobon Alberto Cavallo and Roberto Rigobon 2011-06 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-10-2011.pdf Central Reserve Bank of Peru Working Papers by Nilda Mercedes Cabrera Pasca, Edilean Kleber da Silva Bejarano Aragón, Marcelo Savino Portugal Preferences of the Central Reserve Bank of Peru and optimal monetary policy rules in the inflation targeting regime 2011-06-17T06:23:59Z This study aims to identify the preferences of the monetary authority in the Peruvian regime of inflation targeting through the derivation of optimal monetary policy rules. To achieve that, we used a calibration strategy based on the choice of values of the parameters of preferences that minimize the square deviation between the true interest rate and interest rate optimal simulation. The results showed that the monetary authority has applied a system of flexible inflation targeting, prioritizing the stabilization of inflation, but without disregarding gradualism in interest rates. On the other hand, concern over output stabilization has been minimal, revealing that the output gap has been important because it contains information about future inflation and not because it is considered a variable goal in itself. Finally, when the smoothing of the nominal exchange rate is considered in the loss function of the monetary authority, the rank order of preferences has been maintained and the smoothing of the exchange rate proved insignificant. Preferences of the Central Reserve Bank of Peru and optimal monetary policy rules in the inflation targeting regime 2011-06-17T06:23:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-10-2011.pdf Nilda Mercedes Cabrera Pasca, Edilean Kleber da Silva Bejarano Aragón, Marcelo Savino Portugal 2011-06 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-08-2011.pdf Central Reserve Bank of Peru Working Papers by Renzo Rossini, Zenón Quispe and Donita Rodríguez Capital Flows, Monetary Policy and FOREX Interventions in Peru 2011-05-13T06:23:00Z This article explains the main features of the sterilized intervention in the foreign exchange market and the use of non-conventional policy instruments as applied by the Central Reserve Bank of Peru in order to avoid credit booms or busts in a context of a partially dollarized financial system. This monetary policy framework is based on a risk management approach that includes as the main policy tool the short-term interest rate within an inflation targeting regime. This framework helped to reduce the impact of the recent global financial crisis on the Peruvian economy and allowed to rejoin the path of growth with low inflation, avoiding major disruptions from the surge of capital inflows. Capital Flows, Monetary Policy and FOREX Interventions in Peru 2011-05-13T06:23:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-08-2011.pdf Zenón Quispe Donita Rodríguez Renzo Rossini Renzo Rossini, Zenón Quispe and Donita Rodríguez 2011-05 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-07-2011.pdf Central Reserve Bank of Peru Working Papers by Nikita Cespedes A Quantitative General Equilibrium Approach to Migration, Remittances and Brain Drain 2011-05-13T06:23:00Z Developing countries have experienced an outstanding outflow of skilled workers (brain- drain) over the last several decades. Additionally, migrants tend to be tied to their country of birth, since they send a large amount of remittances to their relatives. Furthermore, migration is not permanent, since a considerable number of workers return to their country of birth after a migration spell. In this paper we develop a model that is consistent with these facts. We use our model to address some important issues in the migration literature from a theoretical perspective. We study the general equilibrium effects of migration, its long-term effects, and its welfare effects, and we see whether the joint effect of return migration and remittances is strong enough to offset the effects of skilled migration. Finally, we evaluate the effectiveness of policy interventions that attempts to offset the effects of a brain drain. A Quantitative General Equilibrium Approach to Migration, Remittances and Brain Drain 2011-05-13T06:23:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-07-2011.pdf Nikita Cespedes Nikita Cespedes 2011-05 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-06-2011.pdf Central Reserve Bank of Peru Working Papers by Richard Etter and Michael Graff A composite leading indicator for the Peruvian economy based on the BCRP's monthly business tendency surveys 2011-04-21T06:21:59Z This paper documents the construction of a composite leading indicator for the Peruvian economy based on the business tendency surveys (BTS) conducted by the Banco Central de Reserva del Perú (BCRP). We first classify potential composite leading indicators into "semantic" and "sophisti-cated" types. The former are based on the contents of the underlying indicators, whereas the latter results from statistical analyses relating to pre-determined reference series. We show that the BCRP BTS data provides a suitable basis for the construction of a sophisticated indicator with the Peru-vian year-on-year GDP growth rate as a reference series. The indicator selection consists of a num-ber of steps comprising semantic analyses of the questionnaire items, cross-correlation analyses as well as turning point analyses. We argue that based on these analyses, the choice should fall on five indicators, relating to firm-specific questionnaire items as well as to items relating to the sector or economy as a whole. The composite leading indicator is computed as the fist principal component of the selected variables. In-sample, it shows a lead of four months before the reference series, which amounts to about six months before the first official data release dates. Due to the limited number of observations (the BCRP's BTS now covering about eight years), we did not reserve any data points for out-of-sample analyses of the suggested composite leading indicator. Accordingly, the performance of the indicator still has to stand the test of time and its lead should be carefully monitored. A composite leading indicator for the Peruvian economy based on the BCRP's monthly business tendency surveys 2011-04-21T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-06-2011.pdf Richard Etter Michael Graff Richard Etter and Michael Graff 2011-04 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-05-2011.pdf Central Reserve Bank of Peru Working Papers by Lawrence Christiano, Cosmin Ilut, Roberto Motto, Massimo Rostagno Monetary Policy and Stock Market Booms 2011-03-11T06:23:00Z Historical data and model simulations support the following conclusion. Inflation is low during stock market booms, so that an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy. Adjustments to the interest rate rule can remove this source of welfare-reducing instability. For example, allowing an independent role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and asset prices. Monetary Policy and Stock Market Booms 2011-03-11T06:23:00Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-05-2011.pdf Lawrence Christiano Cosmin Ilut Roberto Motto Massimo Rostagno Lawrence Christiano, Cosmin Ilut, Roberto Motto, Massimo Rostagno 2011-03 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-03-2011.pdf Central Reserve Bank of Peru Working Papers by Philippe Bacchetta, Cédric Tille and Eric van Wincoop Self-Fulfilling Risk Panics 2011-02-25T17:36:59Z Recent crises have seen large spikes in asset price risk without dramatic shifts in fundamentals. We propose an explanation for these risk panics, based on selfful filling shifts in beliefs about risk, that are driven by a negative link between the current asset price and risk about the future asset price. This link implies that risk about the future asset price depends on uncertainty about future risk. This dynamic mapping of risk into itself gives rise to the possibility of multiple equilibria and can generate risk panics. In a panic, risk beliefs are coordinated around a macro fundamental that becomes a sudden focal point of the market. The magnitude of the panic is larger the weaker this macro fundamental. The sharp increase in risk leads to a large drop in the asset price, decreased leverage and reduced market liquidity. While the model is not aimed at modeling the specifics of any particular financial crisis, we show that its implications are broadly consistent with what happened during the 2007-2008 crisis. Self-Fulfilling Risk Panics 2011-02-25T17:36:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-03-2011.pdf Eric van Wincoop Philippe Bacchetta Cédric Tille Philippe Bacchetta, Cédric Tille and Eric van Wincoop 2011-02 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-02-2011.pdf Central Reserve Bank of Peru Working Papers by Diether W. Beuermann Telecommunications Technologies, Agricultural Profitability, and Child Labor in Rural Peru 2011-02-25T17:36:59Z This paper provides evidence on the effects of access to telecommunications technologies on agricultural profitability and human capital investment decisions among highly isolated villages in rural Peru. I exploit a quasi-natural experiment, in which the Peruvian government through the Fund for Investments in Telecommunications (FITEL) provided at least one public (satellite) payphone to 6,509 rural villages that did not previously have any kind of communication services (either landlines or cell phones). The intervention provided these phones mainly between years 2001 and 2004. I show that the timing of the intervention was uncorrelated with baseline outcomes and exploit differences in timing using a uniquely constructed (unbalanced) panel of treated villages spanning the years 1997 through 2007. The main findings suggest that phone access generated increases of 16 percent in the value per kilogram received by farmers for their agricultural production, and a 23.7 percent reduction in agricultural costs. Moreover, this income shock translated into a reduction in child (6 - 13 years old) market work of 13.7 percentage points and a reduction in child agricultural work of 9.2 percentage points. Overall, the evidence suggests a dominant income effect in the utilization of child labor. Telecommunications Technologies, Agricultural Profitability, and Child Labor in Rural Peru 2011-02-25T17:36:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2011/Documento-de-Trabajo-02-2011.pdf Diether W. Beuermann Diether W. Beuermann 2011-02 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2010/Documento-de-Trabajo-22-2010.pdf Central Reserve Bank of Peru Working Papers by Daniel Paravisini, Veronica Rappoport, Philipp Schnabl and Daniel Wolfenzon Dissecting the Effect of Credit Supply on Trade: Evidence from Matched Credit-Export Data 2010-12-29T06:21:59Z This paper presents evidence on the effect of credit supply shocks on exports. Capital flow reversals in Peru during the 2008 financial crisis induced a decline in the supply of credit by domestic banks with high share of foreign-currency denominated liabilities. We use this variation to estimate the elasticity of exports to bank credit. We use matched customs and firm-level bank credit data to control for non-credit related factors that may also affect the level of exports: we compare changes in exports of the same product and to the same destination by firms borrowing from different banks. Exports react strongly to changes in the supply of credit in the intensive margin, irrespectively of the firms' export volume. In the extensive margin, the negative credit supply shock increases the probability of exiting a product-destination export market, but does not significantly affect the number of firms entering an export market. The magnitude of the respective elasticities, as well as their heterogeneity across firm and export flow observable characteristics, are estimated. Dissecting the Effect of Credit Supply on Trade: Evidence from Matched Credit-Export Data 2010-12-29T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2010/Documento-de-Trabajo-22-2010.pdf Philipp Schnabl Daniel Wolfenzon Veronica Rappoport Daniel Paravisini Daniel Paravisini, Veronica Rappoport, Philipp Schnabl and Daniel Wolfenzon 2010-12 Central Reserve Bank of Peru Working Papers http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2010/Documento-de-Trabajo-19-2010.pdf Central Reserve Bank of Peru Working Papers by Erick Lahura Monetary aggregates and monetary policy: an empirical assessment for Peru 2010-12-23T06:21:59Z In recent years the theoretical and empirical literature has shown a tendency to discard the use of money in monetary policy. This paper provides an empirical evaluation of the relevance of monetary aggregates in the conduct of monetary policy in Peru, a small open and partially dollarized economy. Based on recursive analysis of vector error correction models and allowing for structural breaks, we find that M3 is the only monetary aggregate that helps forecast inflation in Peru and therefore can be useful in monetary policy. There is no clear evidence about the usefulness of any other narrower monetary aggregate either as a potential monetary policy instrument or as an information variable. Monetary aggregates and monetary policy: an empirical assessment for Peru 2010-12-23T06:21:59Z Full text http://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2010/Documento-de-Trabajo-19-2010.pdf Erick Lahura Erick Lahura 2010-12 Central Reserve Bank of Peru Working Papers