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This paper estimates a lifecycle model of consumption, housing choice, and migration in the presence of aggregate and regional shocks, using the Survey of Income and Program Participation (SIPP). The model delivers structural estimates of moving costs by ownership status, age, and family size that complement the previous literature. Using the model, I first show that migration elasticities vary substantially between renters and owners, and I estimate the consumption value of having the option to migrate across regions when there are regional shocks. This value is of lifetime consumption on average, and it varies substantially with household type.

Abstract—In article the issues of resilience of regions to crisis shocks and methods of their assessment are considered. Indicators of GRP dynamics during the crisis period were used as a resilience criterion. A grouping of regions depending on the response to the economic crisis is presented, regions resistant to the crises of 2009 and 2015 are identified. To assess the contribution to the regional dynamics of the consequences of national, structural and regional shocks, the method of structural shifts was used. It is shown that the regional component is a significant factor determining the resilience of the region. The contribution of regional factors to resilience was quantified on the basis of regression analysis.

We study optimal regional insurance provision in federations with regionally and privately observable shocks to the degree of intergenerational externality (DIE) induced by local intergenerational public goods (IPGs), or to the degree of technological progress (DTP) for producing the IPGs. Federal transfers provide interregional insurance, and local debt provides intergenerational insurance. If optimal federal transfers increase (decrease) with a region’s debt level, we say the two insurance policies are complements (substitutes). We address such questions as whether it is efficiency-enhancing to adopt both schemes for providing regional insurance and how the answer varies with these two different economic shocks. The paper’s main results are twofold: first, under the DIE shocks, federal transfers and local debt act as complements in implementing the asymmetric information optimum when borrowing and spending decisions are decentralized at the regional level; second, under the DTP shocks, they act as complements with observable output of IPGs, but act as substitutes with observable expenditure on the IPGs.

Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil's influence on its neighboring economies, documenting trade linkages over the last two decades and quantifying spillover effects in a Vector Auto Regression setting. While trade linkages with Brazil are significant for the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay), they are very weak for others. Consistent with this evidence, econometric results show that, while the Southern Cone economies (especially Mercosur's members) are vulnerable to output shocks from Brazil, the rest of South America is not. Spillovers can take two different forms: the transmission of Brazil-specific shocks and the amplification of global shocks-through their impact on Brazil's output. Finally, we also find suggestive evidence that depreciations of Brazil's currency may not have significant impact on output of its key trading partners.

This paper looks at the question of adequacy of reserves in sub-Saharan African countries in light of the shocks faced by these countries. Literature on optimal reserves so far has not paid attention to the particular shocks facing low-income countries. We use a two-good endowment economy model facing terms of trade and aid shocks to derive the optimal level of reserves by comparing the cost of holding reserves with their benefits as an insurance against a shock. We find that the optimal level of reserves depends upon the size of these shocks, their probability, and the output cost associated with them,

This paper studies the transmission of crime shocks to the economy in a sample of 32 Mexican states over the period from 1993 to 2012. The paper uses a panel structural VAR approach which accounts for the heterogeneity of the dynamic state level responses in GDP, FDI and international migration flows, and measures the transmission via the impulse response of homicide rates. The approach also allows the study of the pattern of economic responses among states. In particular, the percentage of GDP devoted to new construction and the perception of public security are characteristics that are shown to be associated with the sign and magnitude of the responses of economic variables to crime shocks.

This paper uses VAR models to examine the magnitude and sources of growth spillovers to the Baltics from key trading partners, as well asfrom the real effective exchange rate (REER). Our results show there are significant cross-country spillovers to the Baltics with those from the EU outweighing spillovers from Russia. Shocks to the REER generally depress growth in the Baltics, and this intensifies over time. We also find that financial and trade channels dominate the transmission of spillovers to the region which partly explains the realization of downside risks to the Baltics from the global slowdown.

A fear about EMU was that in the absence of national currencies, country-specific shocks would result in greater current account divergences between member states. This paper finds that divergences across euro-area countries are smaller and have not risen relative to those across 13 other advanced economies with more flexible exchange rates. Also, the size of country-specific current account shocks in EMU countries is smaller and their persistence is greater than in the other advanced economies. However, these differences in current account dynamics do not appear related to different exchange rate dynamics.

This paper develops country-specific VAR models with block exogeneity restrictions to analyze how exogenous factors affect business cycles in the Eastern Caribbean. It finds that external shocks play a key role, explaining more than half of macroeconomic fluctuations in the region. Domestic business cycles are especially vulnerable to changes in climatic conditions, with a natural disaster leading to an immediate and significant fall in output-but the effects do not appear to be persistent. Oil price and external demand shocks also contribute significantly to domestic macroeconomic fluctuations. An increase in oil prices (external demand) is contractionary (expansionary), and the effects dissipate up to three years after the shock.

We assess the competitiveness of Mauritius in recent years using two approaches. First, we estimate the difference between the equilibrium and the actual real exchange rate using four methods: the macroeconomic balance approach, the single-equation fundamentals approach, the capital-enhanced approach, and the external sustainability approach. The methods consistently suggest that at the end of 2007 the exchange rate was aligned with its equilibrium value. Second, we undertake a comparative analysis of structural competitiveness indicators and find that Mauritius often fares better on business climate than other small island economies and high-growth Asian economies. Nevertheless, there are areas for improvement.