Roberto Duncan

• PhD
• Professor (Associate) at Ohio University

The literature has argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable politicaleconomy conditions. Using a world sample of 115 industrial and developing countries for 1984-2008, we find that the level of institutional quality plays a key role in countries...

In contrast to industrialized countries, emerging market economies are characterized by pro-or acyclical monetary policies and high output volatility. This paper argues that those facts can be related to a long-run feature of the economy -namely, its institutional quality (IQL). The paper presents evidence that supports the link between an index of...

Recientes investigaciones han encontrado evidencia a favor de la condición de paridad de poder de compra (PPC) en países desarrollados usando muy larga data, sin embargo en países en desarrollo la evidencia casi no existe. Este artículo intenta llenar ese vacío evaluando la validez de largo plazo de la PPC para Chile desde 1810, usando data de Díaz...

Convergence tests implicitly test the unit root hypothesis for per capita income. Although the statistics do not have critical values under the null hypothesis most papers on this subject use them, with the corresponding problems for inference. This paper determines the existence of convergence in GDP levels and income across the regions of Chile u...

In this paper, we consider the forecasting of domestic food price inflation (DFPI) using global indicators, with emphasis on episodes of macroeconomic turbulence, namely, the Global Financial Crisis (GFC) and the COVID‐19 pandemic and its subsequent repercussions. Our monthly dataset covers about two decades for more than a hundred economies. We em...

This paper evaluates the forecasting ability when inflation is viewed as an inherently global phenomenon through the lens of the workhorse New Open Economy Macro (NOEM) model. The NOEM model emphasizes the importance of cross‐country spillovers arising through trade and its reduced form solution can be represented by a finite‐order VAR which provid...

This paper evaluates the forecasting ability when inflation is viewed as an inherently global phenomenon through the lens of the workhorse New Open Economy Macro (NOEM) model. The NOEM model emphasizes the importance of cross-country spillovers arising through trade and its reduced-form solution can be represented by a finite-order VAR that provide...

One major outcome of the Federal Reserve’s 2019–20 framework review was the adoption of a Flexible Average Inflation Targeting (FAIT) strategy in August 2020. Using synthetic control methods, we document that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not changed (an average of 1.18 percentage points during 2020...

One major outcome of the Federal Reserve's 2019-20 framework review was the adoption of a Flexible Average Inflation Targeting (FAIT) strategy in August 2020. Using synthetic control methods, we document that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not changed (an average of 1.18 percentage points during 2020...

One major outcome of the Federal Reserve’s 2019–20 framework review was the adoption of a Flexible Average Inflation Targeting (FAIT) strategy in August 2020. Using synthetic control methods, we document that U.S. inflation rose post-FAIT considerably more than predicted had the strategy not changed (an average of 1.18 percentage points during 2020...

This study examines the long-term inequality in body mass index (BMI) based on convergence tests applied to a database of 172 countries recently published by the NCD Risk Factor Collaboration. First, we find that countries converge in clubs, which indicates that country disparities in BMIs will persist over time. Second, there are three and six con...

We evaluate the hypothesis of convergence to an optimal long-run body weight worldwide. We formulate a simple rational non-addiction eating model to derive a testable equation that allows us to verify the existence of a long-run body weight as well as its estimation. We use a database of body mass index (BMI) estimates across countries over four de...

We exploit recently published data to evaluate the long-run evolution of overweight and obesity rates among European economies between 1975 and 2016. We find that overweight rates for both females and males converge in Europe. In particular, the convergence is driven by the nations in the EU. This fact is consistent with food patterns as well as tr...

We use a broad-range set of inflation models and pseudo out-of-sample forecasts to assess their predictive ability among 14 emerging market economies (EMEs) at different horizons (1 to 12 quarters ahead) with quarterly data over the period 1980Q1-2016Q4. We find, in general, that a simple arithmetic average of the current and three previous observa...

Traditionally, the literature that attempts to explain the link between the current account and output finds a linear negative relationship (e.g., Backus, Kehoe, and Kydland, 1995). Using nonparametric regressions, we find a robust U-shaped relationship between the U.S. current account and the GDP cycle. When output is above (below) its trend the c...

What drives the US current account imbalances? Is there solid evidence that the behavior of the current account is different during deficits and surpluses or that the size of the imbalance matters? Is there a threshold relationship between the US current account and its main drivers? We estimate a threshold model to answer these questions using the...

The canonical neoclassical model is insufficient to understand business cycle fluctuations in emerging market and developing economies. The author reformulates the model proposed by Aguiar and Gopinath (20072. Ahumada, I., and F. Butler. 2009. La enseñanza de la economía en México. Working Paper 672. Washington, DC: Inter-American Development Bank,...

To study the effect of a terms-of-trade shock on the current account, Ostry and Reinhart (1992) and Cashin and McDermott (1998) estimate the intertemporal and intratemporal elasticities of substitution, for a set of countries, constructing importable and non-tradable consumption series. Unfortunately,these series are not available for most developi...

We can understand the role of the liberalization of capital outflows on the global imbalances, the increasing share of US equities in foreign investors’ portfolio and the decline in the world interest rate and the S&P dividend–price ratio, facts observed during the last three decades, when taxes on international asset holdings are reduced in a simp...

In contrast to industrialized countries, emerging market economies are characterized by pro- or acyclical monetary policies and high output volatility. This paper argues that those facts can be related to a long-run feature of the economy - namely, its institutional quality (IQL). The paper presents evidence that supports the link between an index...

Sharp fluctuations in cyclical conditions observed in industrial and developing countries alike have renewed the debate on the scope and the effectiveness of stabilization policies. Traditionally it has been argued that developing countries are unable to adopt counter-cyclical monetary and fiscal policies due to financial imperfections and unfavora...

With a few exceptions, the advantages of dollarization have not been discussed in a dynamic general equilibrium framework, especially for partially dollarized economies that are supposed to be good candidates to follow this kind of regime. After reviewing the arguments for and against dollarization, this paper explores its implications on the volat...

Los tests tradicionales de convergencia evalúan implícitamente la hipótesis de raíz unitaria en las series de producto per cápita. A pesar que bajo la nula estos estadísticos no tienen distribuciones asintóticas ni valores críticos estándares, la gran mayoría de trabajos sobre el tema los emplean con los consiguientes problemas de inferencia. El ob...

Strong swings in business cycle conditions in industrial and emerging market economies (EMEs) alike have renewed the debate on effectiveness of stabilization policies. Traditionally it has been argued that EMEs are unable to pursue counter-cyclical monetary and fiscal policies due to financial imperfections and unfavorable political-economy equilib...

Los tests tradicionales de convergencia evalúan implícitamente la hipótesis de raíz unitaria en las series de producto per cápita. A pesar que bajo la nula estos estadísticos no tienen distribuciones asintóticas ni valores críticos estándares, la gran mayoría de trabajos sobre el tema los emplean con los consiguientes problemas de inferencia. El ob...

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Optimal stabilization policy is countercyclical, aiming at keeping output close to its potential. However it has been traditionally argued that emerging countries are unable to adopt countercyclical monetary and fiscal policies. Here we argue that the cyclical properties of macroeconomic policies depend critically on policy credibility. We test thi...

This paper contrasts the volatility of the main macroeconomic variables of a small open economy in two environments: an official dollarization (OD) scheme and a flexible exchange regime (FER). A simple DSGE model calibrated for the Chilean economy is used as a laboratory to study the implications of these regimes on the standard deviations of key v...

Con pocas excepciones, las ventajas de una dolarización oficial o total han sido analizadas en un marco dinámico de equilibrio general, especialmente para economías parcialmente dolarizadas que se suponen son buenas candidatas para seguir esta clase de esquemas. Además de revisar los argumentos a favor y en contra de la dolarización, este trabajo e...

This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...

The purpose of this paper is to figure out how well a money-in-the-utility-function model with a Taylor rule can match Chilean data, specially some monetary stylized facts. A dynamic stochastic general equilibrium model is formulated, solved and calibrated to evaluate its ability to replicate the main features of the Chilean economy in the 1986-200...