Browsing by Author "Cerda, Rodrigo A."

Now showing 1 - 7 of 7
  • No Thumbnail Available
    Item
    Corporate taxes and the demand for labor and capital in developing countries
    (2010) Cerda, Rodrigo A.; Larrain, Felipe
    This article provides evidence about the impact of corporate taxation on both labor and capital demand by private companies in a developing economy, using firm level data from Chile. Our results show that higher corporate tax rates reduce not only the demand for capital, but also the demand for labor due to complementarities between both inputs. An interesting element of the results presented in this article is the asymmetry between the effects of taxation according to company size. The impact on labor demand is significantly higher in large corporations than in small enterprises, while the demand for capital is more responsive to corporate tax changes in small firms. We can explain these results based on differences in credit constraints according to firm size.
  • No Thumbnail Available
    Item
    Endogenous innovations in the pharmaceutical industry
    (2007) Cerda, Rodrigo A.
    This paper addresses the creation of new products in the US pharmaceutical sector, during the second half of the 20th century. We indicate that the continuous increases in population, and thus in the market size of this sector, play a fundamental role in explaining the large creation of new drugs during that period. We also argue that population and market size can be endogenously determined through the impact of drugs over the mortality rate. Hence, these two effects reinforce each other, producing decrements in the mortality rate and increments in the stock of drugs over time. We obtained the set of new molecular entities approved by the FDA during the second half of the 20th century and we decomposed the data in a panel of 15 therapeutic categories over time. Using this data, we tested our hypotheses using different econometric methods. The results support the hypothesis and are consistent across methods.
  • No Thumbnail Available
    Item
    Is fiscal policy effective?: Evidence for an emerging economy
    (2006) Cerda, Rodrigo A.; Gonzalez, Hermann; Felipe Lagos, Luis
    This paper studies the impact of fiscal policy on economic activity by using Chilean annual data from 1833 to 2000. The data allows us to disentangle the impacts on economic activity - due to the large variation in fiscal policy in the period under study - by using a SVAR methodology. The study finds evidence of non Keynesian impacts of fiscal policy.
  • No Thumbnail Available
    Item
    Market power and primary commodity prices: the case of copper
    (2007) Cerda, Rodrigo A.
    This study identifies the economic fundamentals of the evolution of copper price. Its main hypothesis is that copper price is mainly determined by the evolution of demand of countries with large market power on that market. The novelty is that nominal exchange rates are one of the fundamentals of market power. Monthly data are used ranging from 1994 to 2003 and by means of a cointegration analysis; it is found that the Asian bloc significantly affects the price of this tradable good.
  • No Thumbnail Available
    Item
    Social Security and Wealth Accumulation in Developing Economies: Evidence from the 1981 Chilean Reform
    (2008) Cerda, Rodrigo A.
    Wealth holdings are particularly important in developing economics as they allow individuals to insure themselves against income shocks in the absence of developed financial markets. In this paper, we test whether the existence of future social security benefits impacts wealth holdings by using the 1981 Chilean social security reform. Our estimates are based on the EPS 2004, which contains detailed data on wealth holdings (assets and liabilities) and social security account balances. By means of different econometric methods, we find no impact of social security on wealth accumulation, with the exception of poorer individuals. In that case, each additional peso in social security wealth depresses other types of wealth by almost 0.1 pesos, mainly in regard to real estate. (C) 2008 Elsevier Ltd. All rights reserved.
  • No Thumbnail Available
    Item
    The Chilean pension reform: A model to follow?
    (2008) Cerda, Rodrigo A.
    One of the major economic reforms in the Chilean economy was the 1981 pension reform. In that year, Chile transformed its Pay-as-you-go social (PAYG) security system to an individual account social security system (IA). This paper discusses the impacts of the social security reform. To do so, we construct a countra-factual scenario of the Chilean economy under the PAYG system using simulations methods and we compare it with the effective data occurred under the IA system. We discuss the fiscal impacts, plus pension coverage on the elderly and the PAYG system's macroeconomics impacts by comparing them with the actual evolution of the Chilean economy under the IA system. Our simulations show significant fiscal deficits in the PAYG plus relatively lower pension coverage and modest benefits compare to the IA system. Finally, we show that the pension reform might have had significant macroeconomic impacts. (C) 2007 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.
  • Thumbnail Image
    Item
    The economic value of reducing mortality rates - The case of Chile
    (FONDO CULTURA ECONOMICA, 2006) Cerda, Rodrigo A.; Torche, Aristides
    Between 1979 and 1999, mortality rates in Chile fell from 6.8 to 5.4 per thousand while infant mortality rates decreased from 75 to 38 per 1000 newborns. This paper presents a methodology to value these reductions on the mortality rates based on a model in which agents choose consumption and leisure, facing survival rates. We calibrate the model to the Chilean economy during the nineties. Our results indicate that changes in the mortality rates between 1980 and 1997 can be valued at 270% of the Chilean GDP in 1998.