Francisco Galrao Carneiro

• PhD
• Economist at World Bank

The paper investigates the exchange rate on the reaction function of 24 emerging markets economies’ (EMEs) central banks from 2000Q1 to 2015Q2. This is done by first employing fixed-effects (FE) ordinary least squares and then system generalized methods of the moments techniques. Under FE, the exchange rate is important in the reaction function of...

El artículo usa datos de series temporales agregadas para estimar elasticidades de demanda por trabajo formal e informal respecto a salarios reales. Los resultados del análisis de largo plazo sugieren que el empleo en el sector formal es más elástico que en el sector informal. Por tanto, un incremento de los salarios reales en el sector formal, cau...

The Dominican Republic stands out as a fast growing economy that has not been able to generate a commensurate reduction in poverty. Three reasons have been raised before to explain this conundrum: (i) a labor market that does not translate productivity gains into salary increases; (ii) a domestic economy with weak inter-sectoral linkages; (iii) and...

This paper presents estimates of the effects that terms of trade volatility has on real gross domestic product (GDP) per capita growth. Based on 5-year nonoverlapping panel data comprising 175 countries during 1980 to 2010, the paper finds that terms of trade volatility has significant negative effects on economic growth in countries with procyclic...

We review the patterns of cyclicality in fiscal policy in a sample of 180 countries over a period of more than three decades. First, we consider issues of robustness in the choice of the proxy for fiscal cyclicality by using alternative filtering methods. Second, we rely on a country-specific approach to split our sample in sub-periods based on a t...

This report assesses the sources of macroeconomic volatility in the Eastern Caribbean and discusses policy options to deal with the effects of volatility and that could have positive effects on long-term growth. In doing so, the report contrasts the performance of the member countries of the Organization of Eastern Caribbean States (OECS) with that...

This paper presents new evidence on the patterns of cyclicality in the fiscal policy stance of developing and industrialized countries over a period of more than three decades covering 180 countries during 1980–2012. First, the paper considers issues of robustness in the choice of the proxy for fiscal cyclicality by using alternative filtering meth...

The Dominican Republic (DR) has recorded exceptional growth over the past twenty years and has closed the gap with the Latin America and Caribbean (LAC) region. While in the early 90’s the DR´s per capita income was only about 57% that in LAC, it has climbed to around 90% nowadays. However, the country’s ability to reduce poverty and improving equi...

Trinidad and Tobago (T&T) is an example of successful diversification within the oil and gas sector and is now a global player in the industry. Diversifying its asset base so that the non-resource sector can also grow and generate jobs when the country’s oil reserves are depleted is also an important priority for the Trinidadians. With reserves of...

The ECU, formed by Belarus, Kazakhstan and Russia, was es-tablished in January 2010 and is part of the Eurasian Eco-nomic Community. It carries significant economic weight, mostly because its three member countries represent a poten-tially large consumer market with a total population of 167 million, an estimated total gross domestic product (GDP)...

What Has the Uzbek Economy Achieved in the Last 20 Years? Over the past 20 years, Uzbekistan has followed a unortho-dox economic development model based on an import-substi-tution strategy and a considerable state presence in the econ-omy. With limited integration into the global economy and prudent macroeconomic management, the Uzbek economy grew...

Summary Recent debate on the reasons for the informal sector has led to renewed focus on how to operationalize the measurement of informal employment. This paper investigates congruence between three empirical measures of the rate of informality using Brazilian household survey data for the period 1992-2004. Sixty-three percent of the economically...

This paper examines the effects of inflation targeting on industrial and emerging economies' output growth over the "globalization years" of 1986-2004. Controlling for trade openness and two indicators of financial globalization, the authors find systematic positive and significant effects of inflation targeting on real output growth. In dynamic mo...

The intertemporal relationship between oil revenues, real government spending and real output over the oil cycle is investigated for the case of Angola, the second largest oil producer in Sub-Saharan Africa. The results of a trivariate VAR, impulse response functions and variance decomposition analysis provide empirical support for the tax-spend hy...

Once one of the world's largest staple food producers, Angola is now known as a major oil exporter - the second largest producer in sub-Saharan Africa. Angola is also the world's fourth largest producer of rough diamonds in terms of value, with the potential to become one of the leading global diamond producers. In addition to oil and diamonds, the...

This powerpoint presentation was part of the Angola Day event at the Woodrow Wilson Center on May 9, 2007. Francisco Carneiro of the World Bank presented his findings and recommendations about the oil industry in Angola. - See more at: https://www.wilsoncenter.org/publication/oil-broad-based-growth-and-equity-angola-country-economic-memorandum

This paper discusses some of the challenges that confront oil - rich developing countries in their development path. These challenges include Dutch disease - related phenomena, macroeconomic volatility, weak governance, and constraints to institutional capacity development, which although are not inherent to these countries are likely to be accentu...

This paper estimates changes in the rates of return to human capital across the earnings distribution using data from over a 10-year period for Brazil. It uses these estimates to simulate the separate impacts of changes in returns to skills and changes in the supply of skills on earnings inequality. Evidence points strongly to growing inequality in...

The article uses' aggregate time series data to estimate real wage elasticities of demand for covered and uncovered labour. The results of long-run analysis suggest that the demand for convered sector employment is more elastic than for uncovered. So increased formal sector real wages, for example caused by increased social security contributions w...

The article uses aggregate time series data to estimate real wage elasticities of demand for covered and uncovered labour. The results of long-run analysis suggest that the demand for convered sector employment is more elastic than for uncovered. So increased formal sector real wages, for example caused by increased social security contributions wh...

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours an...

The intertemporal relationship between oil revenues, real government spending and real output over the oil cycle is investigated for the case of Angola, the second largest oil producer in Sub-Saharan Africa. The results of a trivariate VAR, impulse response functions, and variance decomposition analysis provide empirical support for the tax-spend h...

The paper investigates the relationship between social interactions and crime for the case of a developing country that has shown increasing crime rates in recent years. Social interactions are defined as any type of relationship of an individual with other individuals that can affect his/her behavior. We use a unique data set to investigate whethe...

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours an...

The article investigates the existence of discrimination in the urban and rural labor markets in Brazil. Tests the hypothesis that returns to education are different for black and white workers, male and female, in the urban and rural sectors. The methodology used allows for the decomposition of the difference in the mean earnings of male and femal...

The paper establishes empirically the temporal causality and long run relationship between government expenditures and government revenues for the case of Guinea-Bissau - a low income country under stress (LICUS) in Africa. A macroeconomic model is developed to lay out the hypothesis of a spend-tax behavior in the country¡¯s public finances managem...

Since the late 1980s, macroeconomic and trade reform in Brazil appears to have been accompanied by a substantial improvement in the position of women compared with men in the labor market, despite only modest changes to labor market institutions. The authors examine movements in the gender wage gap from 1988 to 1998. Their findings indicate that, o...

The authors undertake an empirical examination of rates of return to human capital for men in Brazil, through the period of macroeconomic stabilization and trade liberalization, using data from the 1988, 1992, and 1998 Brazilian household surveys (Pesquisa Nacional por Amostra de Domic?os, PNAD). The authors estimate simultaneous quantile equations...

This paper complements the findings of Atal, Ñopo and Winder (2009) on gender and ethnic wage gaps for 18 Latin American countries circa 2005 by analyzing gender wage gaps for the same countries between circa 1992 and circa 2007. During this span the overall gender earnings gaps dropped about 7 percentage points, while the unexplained component dro...

The purpose of this report is to document the scale of uncovered employment in Brazil and to describe the trends in this phenomenon at least since the transition to democracy in the late 1980s. Micro-data obtained from annual Brazilian household surveys from 1992 onwards are used to model the determinants of the "choice" that employees face between...

In this article, we estimate the relation between inflation and trade openness [Q. J. Econ. 108 (1993) 869]. The higher the gains, in terms of product, in generating an inflationary “surprise”, the greater the incentives will be for the government to effect such a “surprise”.

This paper uses a computable general equilibrium model to simulate different trade liberalization policy scenarios and counterfactual microsimulations to assess the impacts of greater trade openness on household income distribution and poverty ratios. Our conclusion is that trade liberalization alone may not be sufficient to significantly reduce po...

This paper analyses the relationship between the real exchange rate, real wages and aggregate output. We present a model in which changes in aggregate output and in the real exchange rate precede changes in real wages, and where output is expected to positively affect real wages while changes in the real exchange rate are expected to negatively aff...

Resumo O paper analisa a validade do efeito Fisher nas economias da Argentina, do Brasil e do Mé-xico no período 1980-1997. Através da aná-lise de cointegração, apresenta-se evidência a favor de uma relação de equilíbrio estável no longo prazo entre taxa de juros e infla-ção, apenas para os casos da Argentina e do Brasil. Os resultados sugerem, por...

The paper investigates the existence of discrimination amongst lawyers in the private sector of the Brazilian labor market. Using the random-effects approach to estimate earnings equations, combined with the Oaxaca-Ransom (1994, 1999) decomposition methodology, we test the hypothesis that wage differentials amongst lawyers are mostly due to gender...

This paper investigates the validity of the Fisher effect hypothesis that it is the interest rate which moves to adjust to the anticipated changes in the rate of inflation. The analysis is carried out with monthly data for the period 1980-97 for three countries with recent histories of chronic high inflation: Argentina, Brazil, and Mexico. A co-int...

El análisis de los procesos de integración entre dos economías se ha centrado, tradicionalmente, en la identificación de la intensidad de creación y desvío del comercio, estimada a partir de la simulación de los efectos derivados de la reducción o eliminación de las barreras comerciales. Al mismo tiempo, en la literatura sobre las empresas transnac...

This paper investigates the impacts of greater trade openness on employment, poverty and inequality in Brazil. The empirical strategy is based on decomposition analysis exercises to assess the main determinants of current account deficits following trade liberalization as well as output decomposition into private sector demand, public sector expend...

This paper investigates the validity of the Fisher effect hypothesis that it is the interest rate that moves to adjust to anticipated changes in the rate of inflation. The analysis is carried out with monthly data for the period 1980-1997 for three countries that have a recent history of chronic high inflation: Argentina, Brazil and Mexico. A coint...

This paper investigates the validity of the Fisher effect hypothesis that it is the interest rate that moves to adjust to anticipated changes in the rate of inflation. The analysis is carried out with monthly data for the period 1980-1997 for three countries that have a recent history of chronic high inflation: Argentina, Brazil and Mexico. A coint...

The article discusses the determinants of labour turnover in Brazil. We contrast the view suggesting that severance payments (FGTS) induce labour turnover with arguments suggesting that turnover rates are a function of the characteristics of supply and demand for labour in Brazil. Additionally, we present econometric evidence that changes in the le...

This paper reports analysis of minimum wage on Brazilian labor market combining micro longitudinal data and aggregated time-series data. After the analysis of the minimum wage effects on Brazilian wage distribution based on micro data, the effects on employment level and composition (formal X informal) were identified for both, time-series and long...

The paper argues that the form in which collective bargaining is organized might be a decisive factor in determining the performance of modern industrialized economies. The whole literature on corporatism is concerned with showing that the degree of centralization and coordination in wage determination is a key factor in ensuring either a more or l...

This paper aims at contributing to the debate regarding the role of the minimum wage in Brazil. This is carried out by assessing its potential effects on the labor market outcomes, as well in terms of poverty alleviation and fiscal impact. First, a succinct description of the institutional framework, the evolution of its real value over time, and a...

Este artigo analisa as flutuações do emprego dos diversos estados brasileiros em relação ao emprego nacional. O objetivo é verificar se é possível estabelecer uma relação de longo prazo entre o emprego estadual e o emprego nacional (Blanchard & Katz, 1992; Martin, 1997). Para tanto, o artigo utiliza a metodologia tradicional de análise de co-integr...

This paper proposes a new modeling strategy as regards the definition of an optimal level of unemployment benefits. While the traditional methodology privileges labor market equilibrium to derive optimal employment, wage and unemployment benefit levels, we present a model in which the optimal level of unemployment benefits is a function of the gove...

This article presents an overview of the principal results of research on the impact of the minimum wage on the Brazilian labor market. The effects of the minimum wage on employment, wage levels, and poverty are analyzed, as is the relationship between the minimum wage and the government deficit. Also presented is a brief history of minimum wage po...

Many developing economies, especially in Latin America, appear to be experiencing structural growth in the size of their informal sectors, inconsistent with traditional views that the informal sector acts as a buffer against unemployment, or is symptomatic of segmentation in the labour market. This paper presents micro-econometric evidence for Braz...

This paper investigates the relationship between inflation and output in the context of an economy facing persistent high inflation. By analyzing the case of Brazil, we find that inflation does not impact real output in the long run, but that in the short run there exists a negative effect from inflation on output. These results support Sidrauski’s...

The impact of minimum wages on the labour market has been a recurrent issue in the theoretical and empirical literature [e.g., Cubitt and Heap (1999), Dickens et al. (1998), Waltman et al. (1998), and Dolado et al. (1996)]. There are two clear and divergent views on the normative impact of minimum wages on labour markets in developing economies. Th...

The article investigates the existence of discrimination in the urban and rural labor markets in Brazil. Tests the hypothesis that returns to education are different for black and white workers, male and female, in the urban and rural sectors. The methodology used allows for the decomposition of the difference in the mean earnings of male and femal...

Este artigo analisa o comportamento do consumo num contexto de inflação alta e persistente. Investigamos como a ampla indexação de preços e/ou a substituição total ou parcial de moeda afetam o comportamento do consumo privado em casos de dolarização. A indexação e/ou a dolarização tendem a criar um tipo de seguro contra choques adversos, o que tend...

The formation of global markets has become, not unsurprisingly, a matter ofintense concern for many developing countries, fearful for their own economic and political survival as autonomous entities in the "new world economic order" As a result of this concern, many developing countries are seeking security by forming regional economic blocs, invol...

This paper examines the determinants of industrial real wages in Brazil, making use of panel data on 22 industry sectors with monthly observations for the period 1985-93. The main objective is to test whether industrial wages in Brazil respond to sectoral performance. In line with the evidence for other countries, the overall results suggest that s...

We investigate the importance of trade unions in collective bargaining in the context of a developing country manufacturing labor market. The methodology we adopt to estimate wage differentials follows the method proposed by Haisken-DeNew, J. P. and Schmidt, C. M. (1997) Review of Economics and Statistics79, 516–521, since it improves on the standa...

This article examines wage determination in Brazilian manufacturing during the 1980s and early 1990s. It presents evidence to show that the reduction in state regulation of collective bargaining has led to the development of a system of wage determination which is increasingly characterised by rent sharing and insider trade union bargaining power....

The article investigates the characteristics of industrial wage determination in Brazil using time series data for 22 manufacturing sectors for 1985–1993. The idea is to verify whether changes in sectoral productivity are relevant to explain changes in sectoral nominal wages. First, we present in a descriptive way the results of a statistical inves...

RESUMO Esse artigo discute explicações alternativas para a rigidez dos salários reais na presença de desemprego involuntário. Argumenta-se que a rigidez do salário real pode ser vista como resultado de dois fatores: (i) poder de barganha dos sindicatos, na forma de poder interno; e (ii) a ação deliberada de empresas que procuram evitar os custos as...

The paper tests the hypothesis that the presence of indexed money may rule out a process of currency substitution in contexts of persistent high inflation. Estimates for the case of Brazil using monthly data for the period 1985 to 1993 and cointegration techniques offer support for that.

The paper analyzes the effects of the minimum wage over the other wages in Brazil using a bargaining framework. The key result is that the minimum wage precedes the market wage in the period 1980–85 while there is simultaneous determination in the period 1986–93.

This paper analyses the dynamic relationship between the degrees of indexation of wages and public bonds in Brazil. A simple model is constructed to show that both degrees of indexation are determined simultaneously. We apply cointegration techniques and estimate error-correction representations to assess the temporal causality between them. Our re...

Although following an anti-cyclical behaviour over the last decade, Brazil's informal sector seems to have grown recently as a response to excessive government intervention in the productive system. Despite high inflation and sluggish economic performance, Brazil continues to live with low unemployment and only sporadic social unrest. A substantial...

This paper develops a portfolio balance model to explain asset holdings in foreign exchange markets in three Latin-American economies (Chile, Argentina and Brazil) that experienced episodes of persistent high inflation in the period between 1949 and 1989. In dual exchange rate regimes, official real exchange rates determine the level of premia in p...

The book is addressed to both professional economists who believe in econometrics and graduate students with a taste for time series analysis. It discusses important features of the increasingly popular method of cointegration analysis and non-stationary time series blending the theoretical discussion with detailed implementations which appear quit...

The article discusses some issues concerned with the idea of flexibility in the labor market. Firstly, it presents different approaches on the existence of an informal sector in the economy and distinguishes the modem process of tertiarization, observed in industrialized countries, from the growth of tertiary activities found in most developing cou...

After decades of poor economic management in Latin American and Caribbean countries, structural reform has placed the region on a path of improved economic performance. Two basic principles can be considered responsible for this process of economic reform: fiscal and monetary discipline, and reliance on market forces to determine the allocation and...

The impact of minimum wages on the labour market has been a recurrent issue in the theoretical and empirical literature (e.g., Cubitt and Heap (1999), Dickens et al. (1998), Waltman et al. (1998), and Dolado et al. (1996)). There are two clear and divergent views on the normative impact of minimum wages on labour markets in developing economies. Th...

This paper investigates the validity of the Fisher effect hypothesis that it is the interest rate which moves to adjust to the anticipated changes in the rate of inflation. The analysis is carried out with monthly data for the period 1980-1997 for three countries with recent histories of chronic high inflation: Argentina, Brazil, and Mexico. A co-i...

Preface When you finish your PhD and start your academic career it is almost certain that the only goal in your mind is publishing papers derived from your dissertation. Publications are important to get you tenure or promotions in the future and they also serve to reassure you that you spend a significant part of your time doing something that is...

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