The Historical Evolution of Monetary Policy in Latin America

Recent monetary policy in Latin America has evolved in five different phases. The first one revolves around the monetary doctoring missions, mainly but not exclusively, from the United States that established the first central banks in the region in the 1920s and 1930s adhering to a gold standard regime. The second phase comprises the first attempts to adopt a proactive countercyclical monetary stance and the granting of ample discretionary powers to the central bank to protect economies from the effects of the international business cycle. The third phase consists in the generalized adoption of developmental and inward industrialization goals by central banks. The fourth phase is characterized by central bank’s abandonment of developmental objectives placing the focus of their actions on price stability. The last phase in the evolution of monetary policy centers on inflation targeting. Currently, the most important and pressing challenges of monetary policy relate to its impact and pass-through on the real economy and to the relationships between monetary policy, fiscal policy, the financial system, and financial stability

Early twentieth-century Japanese worker saving: precautionary behaviour before a social safety net

This paper pools data from independent household surveys of Japanese workers roughly spanning the Taisho period (1912–1926), a time before private-business or government-provided social safety nets. First, we construct estimates of permanent and transitory income and then estimate saving functions consistent with intertemporal optimization. The saving behaviour of Japanese worker households is in turn compared with that of American worker households before World War I, a time when they too lacked access to general social services. The estimated marginal propensities to save out of permanent and transitory incomes were quite similar for Japanese and American worker households, but the Japanese ones saved more at a given level of income. The economic environment facing Japanese workers, however, seemed to be no riskier than that facing American workers. We attribute instead this result primarily to the widespread postal savings banks in Japan which increased the convenience and decreased the risk of saving.Social safety net, Precautionary saving, Worker surveys, Taisho era, Postal savings

Distinguishing Neurocognitive Processes Reflected by P600 Effects: Evidence from ERPs and Neural Oscillations

Research on language comprehension using event-related potentials (ERPs) reported distinct ERP components reliably related to the processing of semantic (N400) and syntactic information (P600). Recent ERP studies have challenged this well-defined distinction by showing P600 effects for semantic and pragmatic anomalies. So far, it is still unresolved whether the P600 reflects specific or rather common processes. The present study addresses this question by investigating ERPs in response to a syntactic and pragmatic (irony) manipulation, as well as a combined syntactic and pragmatic manipulation. For the syntactic condition, a morphosyntactic violation was applied, whereas for the pragmatic condition, such as “That is rich”, either an ironic or literal interpretation was achieved, depending on the prior context. The ERPs at the critical word showed a LAN-P600 pattern for syntactically incorrect sentences relative to correct ones. For ironic compared to literal sentences, ERPs showed a P200 effect followed by a P600 component. In comparison of the syntax-related P600 to the irony-related P600, distributional differences were found. Moreover, for the P600 time window (i.e., 500–900 ms), different changes in theta power between the syntax and pragmatics effects were found, suggesting that different patterns of neural activity contributed to each respective effect. Thus, both late positivities seem to be differently sensitive to these two types of linguistic information, and might reflect distinct neurocognitive processes, such as reanalysis of the sentence structure versus pragmatic reanalysis