Revista de Ciencias Económicas

Economic growth: the structure of production and monetary policies

2024-10-24T10:53:38-06:00

There is much literature and discussion on the topic of economic growth and money supply given the numerous points of view that exist. In the thick of the COVID-19 pandemic, policymakers and prominent economists looked to revive employment, investment, and production and to tame rising inflation. Monetary and fiscal policies promoted prior to the outbreak of COVID-19 seem to be the core issue. This essay examines Hayek’s critical assumptions on the effects of the money supply on both the volume and direction of output through production structure, prices, and interest rates. We provide a theoretical model to analyze essential macroeconomic variables and to discover new formulas to measure economic trends and forecast the interest rate at any given instant. Analyzing data from the United States of America according to the Bureau of Economic Analysis (BEA) and the Federal Reserve (Fed), the results suggest that one year ago the Fed should have aimed for an interest rate of approximately four percent (4.0%). In the Addendum to this paper, we include a table demonstrating the usefulness of the proposed model when dealing with steady economic growth.

Expected earnings as a determining factor in women's choice of STEM majors in Costa Rica

2024-06-20T12:19:07-06:00

Although the proportion of women who enroll in college in Costa Rica has increased over the past 20 years, they remain underrepresented in Science, Technology, Engineering, and Math (STEM). This article uses data gathered in 2019 through a survey conducted by the "Observatorio Laboral de Profesiones" to estimate a logit model that explores the determining factors of men's and women's STEM major choice, and the role of expected earnings in their decision. The results suggest that the context of an individual's home of origin is key for women. Moreover, expected earnings solely affect men's major choice, whereas family and friends influence the decision of both.

Impact estimate of the conditional cash transfers program “Avancemos” on education

2024-02-08T11:45:50-06:00

We evaluate the impact of the conditional cash transfer program 'Avancemos' on enrollment in formal secondary education among students aged 12 to 19 in Costa Rica. Using panel data from the National Household Survey from 2015 to 2018, we employed a fixed-effect regression model to eliminate sources of bias related to differences in students' characteristics, that do not vary over time. We find a positive impacts of 16 percentage points on attendance. These results were robust to changes in the periods of analysis and when using a random-effect model. In addition, we found greater effects in males, rural areas, and grades 7th-9th. Additionally, the effects of Avancemos in reintegrating students are higher than in retention. These results provide evidence about the positive effects of the Avancemos program on education and underscore the opportunities that exist to increase its impacts.

The effect of fiscal incentives on the importation of electric vehicles in Costa Rica

2023-12-08T13:00:39-06:00

Starting in 2018, the Costa Rican Government implemented several incentives to promote the adoption of electric vehicles in the country. This study aims to estimate the effect of the fiscal incentives established in the “Law of incentives and promotion for electric transport” on the importation of brand-new electric vehicles between 2010 and 2021, using a negative binomial multiple regression model. The results show that tax exemptions have a positive and significant effect on the importation of electric vehicles; however, this effect is insufficient to meet the decarbonization goals set by the country.

Gender labor income gaps in Costa Rica

2023-09-04T23:09:23-06:00

Women have lower average labor income than men around the world, despite having more years of education. In developing countries, this situation is often even worse. Women not only face wage gaps compared to men who have the same productivity and the same job, but they also face disadvantages regarding the type and conditions of employment, job stability, unemployment rates, and their caregiving burden. This research analyzes the differences in labor incomes by gender and informality in Costa Rica. To do so, we use the Encuesta Continua de Empleo (ECE) from the first quarter of 2023 to estimate various statistical and econometric methodologies. The analysis is conducted by estimating three econometric methodologies: Mincer's equations, the Oaxaca-Blinder decomposition, and Mincer's equation considering the semi-parametric quantile regression estimation.

Contribution of social responsibility to sustainable development goals in the costa rican family business: a case study

2023-07-31T13:16:37-06:00

Through a case study, the study aims to identify the Social Responsibility activities carried out by six Costa Rican family businesses to determine their contribution to the Sustainable Development Goals of the UN Agenda 2030 (specifically objective 3- health and well-being, 4- education quality, 5- gender equality and finally objective 8- decent work and economic growth). The research was developed through in-depth interviews with six Costa Rican family businesses. The results obtained indicate that the Social Responsibility practices implemented by the companies under study can contribute significantly to the achievement of SDG 3; 4; 5 and 8. Likewise, the results open opportunities for new lines of research on these topics.

Describing Costa Rica’s Economic Network

2023-07-16T22:20:37-06:00

This study establishes the foundation for viewing the Costa Rican economy as a complex system and provide policymakers with a robust analytical framework to enhance economic performance. To tackle the initial challenge of understanding the economy as an interconnected structure, we analyze the economic relationships among the products within Costa Rica's Input-Output Matrix. Through this analysis, we identify the best positioned actors, both individually and as part of network subgroups. Understanding the positioning of these actors within the network is crucial to comprehend how their roles can be improved by accessing different network regions and establishing relations with other actors. Our findings reveal the existence of actors that have access to different regions within the network, allowing them to serve as bridges between economic sectors. Consequently, strengthening these well-positioned actors through targeted policies can yield simultaneous benefits for both network subgroups and the overall economy.

Knowledge-intensive activities in Costa Rica: an approach to measure the economy's knowledge base

2023-05-17T12:58:52-06:00

Using clustering techniques, an indicator defined by Eurostat is adjusted to the country to identify knowledge-intensive activities (KIA). Its application shows the meager penetration in the economic structure given its participation in production (39.2%), as well as in the labor market (30.7%). The two activities that contribute the most to production do not qualify as KIA, nor does the one related to “high technology” and responsible for the main export product. By excluding the branches of Education and Health, the contribution to production is reduced to 27.9%. The low weight of KIAs linked to Science and Technology in employment (18%) and in production (8.3%) hinders the aspirations of competing globally as a knowledge society based on innovation. The KIA are accentuated in the service sector (38.3%); its participation in Manufacturing is minimal (6.3%) and null for the agricultural sector.

Historical contribution of road infrastructure investment on economic growth, production per worker and income per capita in Costa Rica

2023-03-03T02:27:01-06:00

This paper tests the hypothesis of investment in road infrastructure affecting the economic growth of Costa Rica, from 1950 to 2017. To prove this, an economic growth function was estimated which, in addition to labor, private capital and human capital as inputs, it incorporates road capital under the approach of an atmosphere good that affects the economic dynamics. Results show a significant historical relationship between road infrastructure and economic growth, with elasticity estimates ranging from 0.12 to 0.21. These findings highlight the importance of increasing both the level and quality of investments to boost economic growth. Finally, the study suggests improvements in measurement methods and identifies future research directions.

Heterogeneous and persistent inflation expectation formation in Costa Rica

2022-10-12T09:17:05-06:00

I analyze which forecast method (rational, adaptative, last inflation or the BCCR’s inflation target) is used by the informants of the Encuesta mensual de expectativas de inflación y tipo de cambio of the Central Bank of Costa Rica to form their inflation expectation. Following Branch (2004) I assume that the agents decide between different methods based on their forecast error. A logit model is used to estimate the probabilities that the agents assign to each method. Since the agents respond to the survey multiple times, I correct the estimation to incorporate the temporal dependence in the informants’ answers. The main result is that most of the informants use methods that require little information instead of forming rational expectations. Further, I present evidence that changes in the sample selection procedure have had important implications in the survey-based expectations. Therefore, it is not recommended to use them when it is required a rational expectations indicator or to make intertemporal comparisons.