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La competitividad y el crecimiento en Nicaragua

La competitividad y el crecimiento en Nicaragua. Comments Osmel Manzano Seminar “Competitiveness and Growth in Latin America” Washington, DC. September 2007. Introduction. Using HRV (2005) the authors find that the restrictions in Nicaragua are : Macro risks Property rights

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La competitividad y el crecimiento en Nicaragua

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  1. La competitividad y el crecimiento en Nicaragua Comments Osmel Manzano Seminar “Competitiveness and Growth in Latin America” Washington, DC. September 2007

  2. Introduction • Using HRV (2005) the authors find that the restrictions in Nicaragua are: • Macro risks • Property rights • Infrastructure and logistics • Coordination failures • Access to credit • Can we validate these results elsewhere? Low appropriability Low returns

  3. Introducción • Maloney Rodríguez-Clare (2005): • Model of “development accounting” –income gaps • TFP is endogenous to a “knowledge accumulation” process • “Knowledge” investment is more than R&D

  4. The model • Production function • HK: • Budget constraint:

  5. The model • Capital accumulation: • FOC for K:

  6. The model • There is a “TFO” frontier that grows independently of the country • In country TFP grow:  The are positive externalities of R&D

  7. The model • Benchmark: USA • “Accumulation” and “Technology” gaps • Limitations: • Functional forms • “International” data

  8. Gaps MRC (05) PWT 6.2 “Fine Tuning”

  9. Policies

  10. Implications • The problem of Nicaragua is one of either distortions and/or innovations • Curiously, Nicaragua seems to have “adequate” K/Y. • p is relatively high • If p where the average of GTM, PAN and RD, then t would be 40%  More evidence on support of distortions

  11. Implications • The authors convincingly show that there is innovation in Nicaragua. • Nicaragua in not an underperformer in KL (05) • An informal HH done with the author’s data on exports shows diversification even with the increase of textile exports.  More evidence on support of distortions

  12. Implications • This result “relatively” agrees with the authors. • Macro risks, property rights (btu for everybody), Infrastructure (in part) and logistics and coordination failures (with the public sector) could be distortions. • Nevertheless, what is probably missing from the study is the “business environment” in Nicaragua

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