Autor: Bernardo Guimaraes

WP050 – The Effect of Options on Coordination

ABSTRACT – This paper studies how constraints on the timing of actions affect equilibrium in intertemporal coordination problems. We show that while the possibility of waiting longer for others’ actions helps agents to coordinate in the good equilibrium, the option of delaying one’s actions harms coordination and can induce severe coordination failures: if agents are very patient, they might get arbitrarily low expected payoffs even in cases where coordination would yield arbitrarily large returns. The risk-dominant equilibrium of the corresponding one-shot game is selected when the option to delay effort is commensurate with the option to wait longer for others´ actions. In an application to innovation processes, we show that protection of the domestic industry might hinder industrialization. We also argue that increased competition might have spurred the emergence of shadow banking in the last few decades. Download do Paper Ano: 2013 Working-paper: 050 Bernardo Guimaraes Ler todos os Posts de Bernardo Guimaraes Share...

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WP070 – O Comunicado do Banco Central

ABSTRACT – Esse artigo estuda como a indicação de política monetária contida nos comunicados do Banco Central do Brasil impacta os mercados. Para isso, classificamos a mensagem de cada nota a partir de uma análise semântica. O comunicado é bastante eficaz enquanto informante do futuro da política monetária, influenciando quase toda a curva de juros e o Ibovespa e ajudando também a prever o conteúdo da ata de reunião do Banco Central. Download do Paper Ano: 2014 Working-paper: 070 Bernardo Guimaraes Ler todos os Posts de Bernardo Guimaraes Share...

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WP049 – Isolated Capital Cities and Misgovernance: Theory and Evidence

ABSTRACT – Motivated by a novel stylized fact – countries with isolated capital cities display worse quality of governance – we provide a framework of endogenous institutional choice based on the idea that elites are constrained by the threat of rebellion, and that this threat is rendered less effective by distance from the seat of political power. In established democracies, the threat of insurgencies is not a binding constraint, and the model predicts no correlation between isolated capitals and misgovernance. In contrast, a correlation emerges in equilibrium in the case of autocracies. Causality runs both ways: broader power sharing (associated with better governance) means that any rents have to be shared more broadly, hence the elite has less of an incentive to protect its position by isolating the capital city; conversely, a more isolated capital city allows the elite to appropriate a larger share of output, so the costs of better governance for the elite, in terms of rents that would have to be shared, are larger. We show evidence that this pattern holds true robustly in the data. We also show that isolated capitals are associated with less power sharing, a larger income premium enjoyed by capital city inhabitants, and lower levels of military spending by ruling elites, as predicted by the theory. Download do Paper Ano: 2013 Working-paper: 049 Bernardo Guimaraes Ler todos os Posts de Bernardo...

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WP047 – Sovereign Default Risk and Commitment for Fiscal Adjustment

ABSTRACT – This paper studies fiscal policy in a model of sovereign debt and default. A time-inconsistency problem arises: since the price of past debt cannot be affected by current fiscal policy and governments cannot credibly commit to a certain path of tax rates, debtor countries choose suboptimally low fiscal adjustments. An international lender of last resort, capable of designing an implicit contract that coax debtors into a tougher fiscal stance via the provision of cheap (but senior) lending in times of crisis, can work as a commitment device and improve social welfare. Download do Paper Ano: 2012 Working-paper: 047 Bernardo Guimaraes Ler todos os Posts de Bernardo Guimaraes Share...

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WP044 – Coordination in the Use of Money

ABSTRACT – Fundamental models of money, while explicit about the frictions that render money socially benefi…cial, are silent on how agents actually coordinate in its use. This paper studies this coordination problem, providing an endogenous map between the primitives of the environment and the beliefs on the acceptability of money. We show that an increase in the frequency of trade meetings, besides its direct impact on payoffs, facilitates coordination. In particular, for a large enough frequency of trade meetings, agents always coordinate in the use of money. We highlight the underlying properties of money (medium of exchange, record-keeping) that facilitate coordination. Download do Paper Ano: 2012 Working-paper: 044 Bernardo Guimaraes Ler todos os Posts de Bernardo Guimaraes Share...

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