Felix Rioja

Tulane University | TU · Department of Economics

Public infrastructure is one of the foundations for the economic growth of a country. While there is a strong consensus regarding infrastructure’s effect on growth, less is known about the effect of infrastructure on welfare and the distribution of wealth. In this paper, we examine the quantitative effect of infrastructure investment on welfare and...

In this paper, we examine the relationship between infrastructure investment and economic welfare in the context of a heterogeneous agent, incomplete-markets economy. Using a quantitative model to match the key aggregate and distributional features of the U.S. economy over the period 1990–2015, we show that the welfare-maximizing share of public in...

We examine the role played by government investment in infrastructure in determining the optimal quantity of public debt in a heterogeneous agent economy with incomplete insurance markets. Calibrating our model to the key aggregate and distributional moments of the U.S. economy for the period 1990–2015, we show that (i) the inclusion of infrastruct...

Using sectoral data from 104 countries over 40 years we show that per-worker productivity declines during recessions. The adverse effect is particularly strong if recessions are accompanied by banking crises and especially in sectors and countries with greater financial frictions.

When considering how to allocate scarce resources for the development of public infrastructure, many countries have a tendency to neglect maintenance in favor of new infrastructure investment projects. We examine the role of maintenance expenditures on output and on the distribution of wealth in a heterogeneous agents model. In our model, maintenan...

Government spending on public infrastructure, education, and health care can increase economic growth. However, the appropriate financing depends on a country’s fiscal position. We develop a two-sector endogenous growth model to explore how variations in the composition and financing of government expenditures affect economic growth. We find that,...

We examine the role played by government investment in infrastructure in determining the optimal quantity of public debt in a heterogeneous agent economy with incomplete insurance markets. Calibrating our model to the key aggregate and distributional moments of the U.S. economy, we show that, (i) the inclusion of infrastructure, and (ii) transition...

We find that banking crises have a sizable, multiyear cumulative negative effect on investment in capital. Moreover, in countries that have experienced several banking crises over the years, each additional crisis lowers the ratio of investment to gross domestic product by more than the previous crisis. In addition, the recovery of investment follo...

This paper studies the effects of stock markets and banks on the sources of economic growth, productivity and capital accumulation, using a large cross country panel that includes high- and low-income countries. Results show that, in low-income countries, banks have a sizable positive effect on capital accumulation. We find that stock markets, howe...

Purpose – While the literature studying the effect of banking crises on real output growth rates has found short-lived effects, recent work has focused on the level effects showing that banking crises can reduce output below its trend for several years. This paper aims to investigate the effect of banking crises on investment finding a prolonged ne...

Government Expenditures, Financing, and Economic Growth in Cape Verde Tamoya A.L. Christie, Felix K. Rioja Abstract In the last 15 years, the economy of Cape Verde has grown steadily and doubled its GDP. Part of this success could be attributed to having one of the world’s highest public investment shares of GDP. However, Cape Verde faces potentia...

This article studies the effects of financial structure on the growth of physical capital accumulation. Several theoretical works have proposed that banks are better than stock markets in funding capital investment. We test these theories with panel data for 62 industrial and developing countries using Generalized Method of Moments dynamic panel te...

The reform of the fiscal system has for many years occupied center stage in policy discussions in developing countries. The authors employ a simple overlapping generations (OLG) model in a small open economy setting to study the impact of fiscal policy reform on the welfare of various generations and on the country’s growth rate. The authors find...

We calibrate a simple neoclassical model of structural transformation to a set of Latin American countries and show that slow growth in agricultural productivity can substantially delay the development process and result in signi cant dierences in per capita incomes. Some of our results indicate that low agricultural productivity delayed the beginn...

The literature on the effects of banking crises on the real economy has typically found that the effects are short-lived. We find that banking crises have a prolonged negative effect on investment. Using data for 150 countries from 1963 to 2007, we find that the investment to GDP ratio is on average about 1.5 percent lower during each of the 7 to 9...

While theory predicts different effects of household credit and enterprise credit on the economy, the empirical literature has mainly used aggregate measures of overall bank lending to the private sector. We construct a new dataset from 45 developed and developing countries, decomposing bank lending into lending to enterprises and lending to househ...

One of the central concerns in Latin America and the Caribbean (LAC) has been the reduction of poverty and inequality so prevalent in the continent. Using large world samples, the literature has found that financial development increases economic growth, increases the income of the poor, and reduces inequality. This paper studies the effects of fin...

While the theoretical and empirical finance literature has focused almost exclusively on enterprise credit, about half of credit extended by banks to the private sector in a sample of 45 developing and developed countries is to households. The share of household credit in total credit increases as countries grow richer and financial systems develop...

This article is concerned with issues of the efficiency and revenue aspects of the current Jamaican taxes on trade, including tariffs, other charges, and customs valuation questions. It also considers revenue implications of further Jamaican tariff liberalization through the World Trade Organization as a member of the Caribbean Community and throug...

We study how financial development is related to short run stabilization. Specifically, our objective is to derive monetary policy efficiency measures (PEMs) for 37 industrialized and developing countries, and analyze the impact that the size and depth of the banking sector and the capital sector have on policy performance. It is our contention tha...

This paper studies the effects of financial structure on the sources of economic growth. In particular, we test the effect of market-based versus bank-based financial systems on economic growth, productivity growth and capital accumulation. The existing empirical literature has found that financial structure does not affect economic growth. This pa...

This paper studies the growth effects of productive public expenditures on education and public capital in an endogenous growth model of overlapping generations. The model is calibrated to Latin American data, and the effects of raising government expenditures on education and public capital are computed. Results show that increases in these public...

This report is concerned with issues of the efficiency and revenue aspects of the current Jamaican taxes on trade, including tariffs, other charges, customs valuation questions, and incentives. It also considers revenue implications of further Jamaican tariff liberalization through the World Trade Organization (WTO) as a member of the Caribbean Com...

Recent research has found a strong positive effect of a country's financial development on economic growth. We propose that this relationship may vary according to the level of financial development (divided in three regions). In the low region (countries with very low levels of financial development), additional improvements in financial markets h...

Recent research has found a strong positive effect of a country's financial development on economic growth. We propose that this relationship may vary according to the level of financial development (divided in three regions). In the low region (countries with very low levels of financial development), additional improvements in financial markets h...

Public infrastructure is one of the foundations for economic growth. Empirical research has found that public infrastructure can have different effects in different sectors of the economy. The theoretical literature, however, has concentrated in one-sector growth models. This paper develops a three-sector model (agriculture, manufacturing and servi...

This article studies the effects of financial development on the sources of growth in different groups of countries. Recent theoretical work shows that financial development may affect productivity and capital accumulation in different ways in industrial versus developing countries. This hypothesis is tested with panel data from 74 countries using...

How effective was public investment in stimulating the Japanese economy during the economic stagnation of the 1990s? Using a dataset of regional public investment spending, we find that investment multipliers were higher than for public consumption, although they were relatively low and declining over time. The paper also finds that the effectivene...

Latin American economic policy in the 20 th century was often dominated by populist administrations. Populist governments typically advocate large government expenditures and large government debt. While most studies have concentrated on the short-run effects of these policies, this paper analyzes the long-run growth implications. Specifically, we...

In most developing countries, irrigation, road, and power networks are not in good condition. In Latin America, for example, the effectiveness of such public infrastructure is only about 74% of that of industrialized countries. Low effectiveness imposes a cost on these countries in terms of forgone output. This paper develops a general-equilibrium...

The relationship between financial development and economic growth has received a lot of attention in the economic literature in recent years. The consensus finding, which has also become widely accepted by policymakers, is that financial development has a positive, monotonic effect on growth. In this paper, we propose that the relationship between...

This paper studies the international transmission of anticipated inflation. A two-country, two-good, two-currency, cash-in-advance model is used to examine analytically and numerically the consequences of changes in a country's inflation rate. Domestic monetary policy influences real activity at home through an inflation-tax channel. These real eff...

Emerging economies in crisis typically request assistance from the International Monetary Fund (IMF). After evaluating the situation, the IMF makes a loan available to the country, conditional on certain policy reforms. Governments usually resist many of these measures and negotiation ensues. This paper analyzes the most contentious measures of IMF...

Emerging economies in crisis typically request assistance from the International Monetary Fund (IMF). After evaluating the situation, the IMF makes a loan available to the country, conditional on certain policy reforms. Governments usually resist many of these measures and negotiation ensues. This paper analyzes the most contentious measures of IMF...

Empirical studies have found infrastructure investment important for a country¡¯s economic performance, but have not provided clear guidelines for infrastructure policy or its effects on other macroeconomic variables. This paper develops a general equilibrium model of a small open economy to study the effects of public infrastructure on output, pri...

This paper develops a dynamic general equilibrium model that provides an internally consistent micro-foundations framework where various effects of infrastructure policy changes can be studied. Devoting additional resources to infrastructure investment can payoff in terms of sizable increases in GDP and private investment. In addition to this, the...

This paper develops a dynamic macroeconomic model to explore how variations in the composition and …nancing of government expenditures a¤ect economic growth in the long-run. The model is used to analyze how public investment spending funded by taxes or borrowing a¤ects long-term output growth. We also examine the e¤ect of varying the composition of...

Thesis (Ph. D.)--Arizona State University, 1997. Bibliography: leaves [113]-116.