Portuguese Economic Journal, 2019, Volume 18, Nº 2
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- Does monetary integration lead to income convergence in Africa? A study of the CFA monetary areaPublication . Ndao, Souleymane; Nenovsky, Nikolay; Tochkov, KirilThe CFA franc area is one of the oldest currency unions, but it has come under intense criticism recently for failing to promote economic growth and income convergence between member states. This paper examines the growth experience of the 14 member countries relative to a common benchmark over the period 1960–2011. In particular, we use a combination of parametric and non-parametric methods to study convergence patterns as well as growth dynamics and to identify the factors responsible for changes in relative per-capita income. The results indicate divergence tendencies that result in a bimodal distribution in the long run. The sharp devaluation of the CFA franc in 1994 increases intradistributional mobility which is directed towards lower income levels. The regression analysis suggests that openness, FDI, and financial development have a positive and robust effect on convergence in the currency union.
- Anticipating the location of a waste collection point : an application based on PortugalPublication . Ribeiro, Vitor Miguel; Pezzino, MarioWe study the optimal location of a waste facility in a horizontally differentiated duopoly where firms choose their location and price. The policymaker decides the location of a waste facility targeting social welfare maximization. Consistent with the observation of the location decisions of waste facilities in Portugal, we show that the optimal location of a waste facility is never in the city center under partial expost regulation. Ex-ante regulation ensures the highest level of social welfare, but from a theoretical point of view, it requires a waste facility located in the city center. A robustness check is then provided to justify that, in actual regulatory practice, a first-mover regulator maximizes social welfare without necessarily imposing the installation of a waste facility in the city center.
- An empirical note about estimation and forecasting Latin American Forex returns volatility : the role of long memory and random level shifts componentsPublication . Rodríguez, Gabriel; Ojeda Cunya, Junior A.; Gonzáles Tanaka, José CarlosA set of RLS-type models with ARMA and ARFIMA dynamics is estimated and compared in a forecasting exercise with ARFIMA, GARCH and FIGARCH models. It is an extension of Rodríguez (N Am J Econ Financ 42:393–420, 2017) but using more countries and working with squared returns in the forecasting exercise. The estimation results show: (i) existence of RLS; (ii) measurement errors except in Chile and Colombia. Regarding the fractional parameter, the estimates are quite small indicating the possible absence of long memory with possible exceptions of Chile and Colombia. The forecast exercise using the 10% MCS of Hansen et al. (Econometrica 79:453–497, 2011) and the ratios of MSFE indicate absence of the RLS-ARFIMA models while RLS-ARMA models are selected. In general, the results of the estimations and forecasts indicate probable absence of long memory or its small magnitude, which would makes this characteristic not only unnecessary but also irrelevant to capture the variations of the low frequencies of the series.