Template-Type: ReDIF-Article 1.0 Title: Probit Models for Grouped-data Migration Flows: A TheoreticalNote Author-Name: Coro Chasco Author-Workplace-Name: Autonomous University of Madrid Author-Name: Patricio Aroca Author-Workplace-Name: Escuela de Negocios, Adolfo Ibáñez University, Chile Author-Name: Luc Anselin Author-Workplace-Name: University of Chicago Abstract: In this theoretical note, we propose the GProbit model as an alternative to gravity models to estimate grouped-data flows. This is a model based on the random utility theory, which is consistent with the principle of population behavior. Instead of migrant counts, the dependent variable of the GProbit model of flows consists of a number of observed proportions. It allows explaining the propensity to migrate from any origin to a destination, which is an interesting relative concept not affected by the size effect. For this reason, it is expected to have better fit and less problems of non-normality, as illustrated by an application for the internal migration flows of the Spanish regions. Classification-JEL: Keywords: Probit model; Gravity model; Proportions; Migration flows; Spain Journal: Revista Economia Year: 2019 Issue: 84 Volume: 42 Pages: 1-8 File-URL: File-Format: Application/pdf Handle: RePEc:pcp:pucrev:y:2019:i:84:p:1-8 Template-Type: ReDIF-Article 1.0 Title: Subsidizing Innovation and Production Author-Name: Gamal Atallah Author-Workplace-Name: Department of Economics, University of Ottawa Abstract: This paper studies the interaction between production subsidies and innovation subsidies. We develop a model which allows us to calculate the socially optimal subsidies (and how they vary with changes in the economic environment), and to understand how firms react to each type of subsidy. In a three-stage game, the government chooses production and innovation subsidies in the first stage to maximize welfare in the presence of a shadow cost of public funds; two firms invest in cost-reducing R&D in the second stage; and the two firms compete in quantities in the last stage. We find that production subsidies crowd out innovation. On the other hand, providing a production subsidy reduces the cost of the innovation subsidy, and vice versa. The optimal production subsidy either increases monotonically with spillovers, or is U-shaped with respect to spillovers, depending on exogenous parameters. The innovation subsidy is increasing in spillovers.The production subsidy is higher for very low spillovers, while the innovation subsidy is higher for moderate/high spillovers. In equilibrium, because of the innovation subsidy, R&D increases with spillovers, and so does welfare. We also consider the case of a financially constrained government, as well as the case of a uniform subsidy to production and innovation costs. Classification-JEL: D43; L50; O38 Keywords: Production subsidy; Input subsidy; Output subsidy; Innovation subsidy; R&D subsidy; R&D;R&D spillovers; Process innovation Journal: Revista Economia Year: 2019 Issue: 84 Volume: 42 Pages: 9-35 File-URL: https://revistas.pucp.edu.pe/index.php/economia/article/view/21400/21061 File-Format: Application/pdf Handle: RePEc:pcp:pucrev:y:2019:i:84:p:9-35 Template-Type: ReDIF-Article 1.0 Title: Productivity Growth: Patterns and Determinants across the World Author-Name: Young Eun Kim Author-Workplace-Name: Development Research Group, World Bank Author-Name: Norman V. Loayza Author-Workplace-Name: Development Research Group, World Bank Abstract: This is the background paper for the productivity extension of the World Bank’s Long-TermGrowth Model (LTGM). Based on an extensive literature review, the paper identifies the main determinants of economic productivity as innovation, education, market efficiency, infrastructure, and institutions. Based on underlying proxies, the paper constructs indexes representing each of the main categories of productivity determinants and, combining them through principal component analysis, obtains an overall determinant index. This is done for every year in the three decades spanning 1985-2015 and for more than 100 countries. In parallel, the paper presents a measure of total factor productivity (TFP), largely obtained from the Penn World Table, and assesses the pattern of productivity growth across regions and income groups over the same sample. The paper then examines the relationship between the measures of TFP and its determinants. The variance of productivity growth is decomposed into the share explained by each of its main determinants, and the relationship between productivity growth and the overall determinant index is identified.The variance decomposition results show that the highest contributor among the determinants to the variance in TFP growth is market efficiency for Organisation for Economic Cooperationand Development countries and education for developing countries in the most recent decade. The regression results indicate that, controlling for country- and time-specific effects, TFP growth has a positive and significant relationship with the proposed TFP determinant index and a negative relationship with initial TFP. This relationship is then used to provide a set of simulations on the potential path of TFP growth if certain improvements on TFP determinants are achieved. The paper presents and discusses some of these simulations for groups of countries by geographic region and income level. In addition, as a country-specific illustration, the paper presents simulations on the potential path of TFP growth for Peru under various scenarios. An accompanying Excel-based toolkit, linked to the LTGM, provides a larger set of simulations and scenario analysis at the country level for the next few decades. Classification-JEL: D24; G14; H54; I25; O33; O43; O47 Keywords: Productivity; Innovation; Education; Efficiency; Infrastructure; Institutions; Growth Journal: Revista Economia Year: 2019 Issue: 84 Volume: 42 Pages: 36-93 File-URL: https://revistas.pucp.edu.pe/index.php/economia/article/view/21499/21127 File-Format: Application/pdf Handle: RePEc:pcp:pucrev:y:2019:i:84:p:36-93 Template-Type: ReDIF-Article 1.0 Title: A Note on Forecasting Daily Peruvian Stock Market VolatilityRisk Using Intraday Returns Author-Name: Mauricio Zevallos Author-Workplace-Name: Department of Statistics, University of Campinas, Brazil Abstract: n this paper I present a model to forecast the daily Value at Risk (VaR) of the Peruvian stock market (measured through the general index of the Lima Stock Exchange: the IGBVL) based on intraday (high-frequency) data. Daily volatility is estimated using realised volatility and I adopted a regression quantile approach to calculate one-step predicted VaR values. The results suggest that the realised volatility is a useful measure to explain the Peruvian stock market volatility and I obtained sound results using quantile regression for risk estimation. Classification-JEL: C22; C51; C53; C58 Keywords: High frequency data; Quantile Regression; Value-at-Risk Journal: Revista Economia Year: 2019 Issue: 84 Volume: 42 Pages: 94-101 File-URL: https://revistas.pucp.edu.pe/index.php/economia/article/view/21503/21130 File-Format: Application/pdf Handle: RePEc:pcp:pucrev:y:2019:i:84:p:94-101 Template-Type: ReDIF-Article 1.0 Title: The Economic Legacy of General Velasco: Long-Term Consequences of Interventionism Author-Name: César Martinelli Author-Workplace-Name: George Mason University Author-Name: Marco Vega Author-Workplace-Name: Banco Central de Reserva del Perú; Pontificia Universidad Católica del Perú Abstract: We apply synthetic control methods to study the long-term consequences of the interventionist and collectivist reforms implemented by the Peruvian military junta of 1968–1975. We compare long-term outcomes for the Peruvian economy following the radical reforms of the early 1970s with those of two controls made of similar countries, one chosen in the Latin American region and another one chosen from the world at large. We find that the economic legacy of the junta includes sizable loses in GDP along two decades, beyond those that can be attributed to adverse international circumstances. The evidence suggests that those loses can be attributed both to a decline in capital accumulation and to a fall in productivity. Classification-JEL: E52; E58; E62 Keywords: Output loss; Synthetic controls; Military nationalism; Populism; Collectivism; Peruvian Revolution Journal: Revista Economia Year: 2019 Issue: 84 Volume: 42 Pages: 102-133 File-URL: https://revistas.pucp.edu.pe/index.php/economia/article/view/21589/21221 File-Format: Application/pdf Handle: RePEc:pcp:pucrev:y:2019:i:84:p:102-133