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For more than three decades, Honduras’s average annual growth in real per capita GDP has been almost zero and highly uneven, even though its total investment-to-GDP ratio has been relatively large. This paper argues that policy and efficiency variables seem to have had less of an influence on growth in Honduras than they had on other countries. Instead, lack of growth can be attributed to the offsetting negative influence of low labor and capital productivity, which result from deficient levels of human capital and inadequate composition of investment. Other constraints to growth in Honduras include inadequate physical and institutional infrastructures.

Investments: General --- Demography --- Economic Growth and Aggregate Productivity: General --- Economywide Country Studies: Latin America --- Caribbean --- Economic Growth of Open Economies --- Investment --- Capital --- Intangible Capital --- Capacity --- Education: General --- Demographic Economics: General --- Macroeconomics --- Education --- Population & demography --- Gross fixed investment --- Population and demographics --- Private investment --- Gross capital formation --- National accounts --- Saving and investment --- Population --- Honduras

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This study shows that in Mexico there is a long-run relationship between the real exchange rate and capital inflows, the external terms of trade, and productivity in the manufacturing sector. A once-and-for-all unit increase in the ratio of quarterly capital inflow to quarterly (annualized) GDP causes a long-run real appreciation of the peso of about 12 percent. The analysis also reveals a structural break in 1995, which coincides with the change to a floating exchange rate arrangement, and an overvaluation of the peso in real terms on the eve of the end–1994 crisis in the range of 12 to 25 percent.

Exports and Imports --- Foreign Exchange --- Estimation --- Single Equation Models --- Single Variables: General --- Current Account Adjustment --- Short-term Capital Movements --- International Investment --- Long-term Capital Movements --- Empirical Studies of Trade --- Trade Policy --- International Trade Organizations --- Currency --- Foreign exchange --- International economics --- Macroeconomics --- Real exchange rates --- Capital inflows --- Capital flows --- Terms of trade --- Real exports --- Balance of payments --- International trade --- National accounts --- Capital movements --- Economic policy --- nternational cooperation --- Exports --- Mexico

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Reforming economies have typically placed little attention on the impact of illegal activities on the success of reform/stabilization packages and optimal policy design. This paper aims at developing a framework in which to assess an economy’s response to alternative stabilization/reform packages as a function of the scope of corruption activities. The framework developed herein is a basic one in which only the most fundamental questions (such as the effects of anti-corruption government policies on output and welfare) are examined. The more interesting questions of the optimal design of stabilization and economic reform policies remain to be addressed in future extensions of the model. The framework also accommodates political-economy analysis, and is able to explain why, even when able to eliminate corruption activity altogether, governments may choose not to do so. Our framework differentiates between developing and developed economies according to the income share accruing to capital, as is common in the literature. In equilibrium, the effect of anti-corruption penalties on the economy’s capital stock is greater in developing countries; in particular, we find that the elasticity of the steady state average per capita stock of capital with respect to increases in anti-corruption penalties is increasing in the income share accruing to capital. The model also shows that reductions in public good output, as a fraction of the economy’s total expenditure, lead to larger welfare decreases when in the presence of corruption.

Investments: General --- Investments: Stocks --- Macroeconomics --- Criminology --- Renewable Resources and Conservation: Government Policy --- Bureaucracy --- Administrative Processes in Public Organizations --- Corruption --- Macroeconomics: Consumption --- Saving --- Wealth --- Aggregate Factor Income Distribution --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Investment --- Capital --- Intangible Capital --- Capacity --- Corporate crime --- white-collar crime --- Investment & securities --- Consumption --- Income --- Stocks --- Capital accumulation --- Economics --- Saving and investment

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We study the performance of the four Western Hemisphere trading blocs during the period 1978-2001. For the North American Free Trade Agreement (NAFTA), trade integration outweighed trade diversion; for MERCOSUR, increased integration and trade diversion went hand in hand; for the Central American Common Market (CACM) and the Andean Community, the evidence points to trade diversion only. We also find that trade among neighboring countries has increased since the early 1990s. The estimations are based on a nonlinear gravity equation that incorporates the hypothesis that exports create externalities that affect trade costs. This hypothesis might help reconcile the theoretical unitary income elasticity with most empirical findings of a non-unitary income elasticity in studies using the gravity equation.

Trade blocs --- International trade. --- External trade --- Foreign commerce --- Foreign trade --- Global commerce --- Global trade --- Trade, International --- World trade --- Commerce --- International economic relations --- Non-traded goods --- Regional economic blocs --- Regional trading blocs --- Trading blocs --- International trade --- Econometrics --- Exports and Imports --- Empirical Studies of Trade --- Economic Integration --- Trade: General --- Trade Policy --- International Trade Organizations --- Econometric Modeling: General --- Financial Aspects of Economic Integration --- International economics --- Econometrics & economic statistics --- Exports --- Trade agreements --- Imports --- Gravity models --- Trade integration --- Econometric analysis --- Economic integration --- Commercial treaties --- Econometric models --- International economic integration --- Mexico

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The simple answer to both questions in the title of this paper is: No. We concentrate on the three main risk elements that contributed to the banking system’s difficulties during the crisis: increasing dollarization of the balance sheet, expanding exposure to the government, and, eventually, the run on deposits. We find that there was substantial cross-bank variation in these elements—that is, not all banks were hurt equally by macroeconomic shocks. Furthermore, using panel data estimation for the 1998–2001 period, we find that depositors were able to distinguish high- from low-risk banks, and that individual banks’ exposure to currency and government default risk depended on bank fundamentals and other characteristics. Thus, not all banks behaved equally in the run-up to the crisis. Finally, our results have implications for the existence of market discipline in periods of stress and for banking regulation, which may have led banks to underestimate some of the risks they incurred.

Bank failures -- Argentina. --- Banks and banking -- Argentina. --- Electronic books. -- local. --- Financial crises -- Argentina. --- Business & Economics --- Economic History --- Banks and banking --- Bank failures --- Financial crises --- Failure of banks --- Business failures --- Banks and Banking --- Money and Monetary Policy --- Exports and Imports --- International Finance: General --- Open Economy Macroeconomics --- Information and Market Efficiency --- Event Studies --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International Lending and Debt Problems --- Banking --- Monetary economics --- International economics --- Bank deposits --- Currencies --- Commercial banks --- Foreign currency exposure --- Money --- Financial services --- Financial institutions --- External debt --- Foreign exchange market --- Debts, External --- Argentina