
Luiz Edgard Oliveira
Associate Economist
Macroeconomic forecasting, Regional analysis
Profiles: LinkedIn
Working Papers
Growth Volatility in Belize
WB-MTI 2019-17 | With Longmore, Antonio, and McLeod | December 2019
abstract (+)An open economy structural vector autoregressive (SVAR) model is developed for Belize with the objective of identifying the main factors behind the volatility in output growth. A MarkovSwitching VAR (MS-VAR) model is also employed to explore whether the response to shocks is
the similar across different economic states. The paper finds that Belize is one of the most volatile economies in Latin America and the Caribbean. Most this is volatility is driven by fluctuations in the economic growth of its main trading partners – United States and Mexico – and domestic price
movements. The impact of these variables differs significantly depending on the prevailing economic conditions in Belize. Notably, the influence of trading partner’s GDP on growth weakens during periods of intense volatility suggesting that the authorities may need to invest more in
developing countercyclical measures to minimize the duration of instability. The paper also confirms that higher output volatility undermines the pace of economic expansion in the country and has kept growth in Belize lower than otherwise possible.
Addressing Debt Vulnerabilities in Small States: The Potential Role of New Financing Instruments
World Bank Group, Macroeconomics and Fiscal Management Discussion Paper, No. 10 | With Haque, Partow, and Varma | March 2016
abstract (+)This paper explores two new financing mechanisms that multilateral and bilateral development agencies could consider deploying to address problems of debt sustainability in small states. These proposed financing mechanisms would allow bilateral development partners to utilize committed but undisbursed climate adaptation funds in ways that help small states reduce or manage debt servicing obligations while also supporting continued investment in climate adaptation to reduce
climate vulnerabilities. Debt-for-climate adaptation swaps would see bilateral creditors pay down debt owed to multilateral creditors by small states, with small states then reallocating avoided debt repayments to climate adaptation projects and programs. Climate adaptation development policy financing would involve the provision of sector or general budget support to small states by multilateral or bilateral creditors (potentially tied to debt service or early debt repayments), conditional on implementation of policy measures to address climate vulnerability risks. In this paper we provide an initial assessment of these proposals, informed by analysis of small state indebtedness and recent debt dynamics. Proposed financing instruments are predicated on assumptions that small states face high levels of indebtedness, and that reducing debt levels while increasing climate resilience could sustainably reduce such vulnerabilities. We find that levels of
indebtedness vary widely across small states. Analysis of small state debt dynamics shows that
small state debt accumulation has been driven by large primary and current account deficits and
slow economic growth. Debt reduction from new mechanisms can only be expected to be
sustainable, therefore, if countries simultaneously address the macroeconomic imbalances driving debt accumulation. We demonstrate that, while exposure to natural disasters is likely to have exacerbated economic management challenges in some small states, such exposures are unlikely to be the only important cause of indebtedness.
We conclude that proposed new financing instruments can potentially help reduce small state debt burdens and gain fiscal space for climate adaptation but will not present a sustainable solution to problems of small state debt risks unless they involve (or are accompanied by) macroeconomic and
structural reforms to address the underlying imbalances driving rapid debt accumulation.
Mobilizing Revenue in Sub-Saharan Africa: Empirical Norms and Key Determinants
IMF 2012-12 | With Drummond, Daal, and Srivastava | May 2012
abstract (+)Mobilizing more revenue is a priority for sub-Saharan African (SSA) countries. Countries have to finance their development agendas, and weak revenue mobilization is the root cause of fiscal imbalances in several countries. This paper reviews the experience of low-income SSA countries in mobilizing revenue in recent decades, with two broad aims: identify empirical norms of how much and how fast countries have been able to mobilize more revenue and empirical determinants (panel estimates) of revenue mobilization. The paper finds that (i) the frequency distribution of changes in revenue ratios for SSA low-income countries (LICs) peaks at a pace of about ½-2 percentage points of GDP in the short-to-medium term and at a pace of about 2-3½ percentage points of GDP over the longer term, and that (ii) almost all SSA-LICs managed to increase revenue ratios by more than 2 percentage points of GDP in the short-to-medium term, at least once in the last two decades. The sustainability of large increases in revenue ratios can be an issue, in particular for fragile countries. The panel estimates suggest that structural factors, such as per capita GDP, share of agriculture in GDP, inflation, degree of openness, and rents received from natural resources, are important determinants of tax revenue.
Published Articles (Refereed Journals and Volumes)
Tra i Leoni: Revealing the Preferences Behind a Superstition
Forthcoming in Journal of Economic Psychology | With Invernizzi, Miller, Coen, and Dufwenberg
abstract (+)We investigate a superstition for which adherence is nearly universal. Using a combination of field interventions that involve unsuspecting participants and a lab-style value elicitation, we measure the strength of peoples’ underlying preferences, and to what extent their behavior is driven by social conformity rather than the superstition itself. Our findings indicate that both mechanisms influence behavior. While a substantial number of people are willing to incur a relatively high individual cost in order to adhere to the superstition, for many, adherence is contingent on the the behavior of others. Our findings suggest that it is the conforming nature of the majority that sustains the false beliefs of the minority.
FRBSF Publications
Rising Wildfire Risk for the 12th District Economy
Economic Letter 2020-19 | July 13, 2020 | With Aylward