Leo Bonato - Academia.edu (original) (raw)

Papers by Leo Bonato

IMF Working Papers

Resilience to climate change and natural disasters hinges on two fundamental elements: financial ... more Resilience to climate change and natural disasters hinges on two fundamental elements: financial protection-insurance and self-insurance-and structural protection-investment in adaptation. Using a dynamic general equilibrium model calibrated to the St. Lucia's economy, this paper shows that both strategies considerably reduce the output loss from natural disasters and studies the conditions under which each of the two strategies provides the best protection. While structural protection normally delivers a larger payoff because of its direct dampening effect on the cost of disasters, financial protection is superior when liquidity constraints limit the ability of the government to rebuild public capital promptly. The estimated trade-off is very sensitive to the efficiency of public investment.

Politica Economica, 1993

Abstract This paper reviews the theory of capital structure and its empirical performance. In par... more Abstract This paper reviews the theory of capital structure and its empirical performance. In particular, we consider the following reserach strands: static trade-off between the tax advantage of debt and costs of bankruptcy, agency costs, asymmetric information models, ...

The state of corporate indebtedness has always attracted considerable attention in both academic ... more The state of corporate indebtedness has always attracted considerable attention in both academic and policy circles. More recently the rise in companies' debt has been at the centre of a lively debate in the United States (Volcker, 1986; Kaufman, 1986; Bernanke ...

SSRN Electronic Journal, 2000

In this paper, we use a unique database on expected monetary conditions from the Reserve Bank of ... more In this paper, we use a unique database on expected monetary conditions from the Reserve Bank of New Zealand Survey of Expectations to study how policy signals are transmitted. In order to exploit the ordinal nature of the data, we run an ordered probit model where expected monetary conditions are a function of expected financial market variables and some "narrative" measures of monetary policy shocks. Although conclusions about the impact of policy shocks on public's expectations are somewhat tentative, the results could be interpreted as evidence of "divergence" between the Reserve Bank's and the public's view. Overall, the paper shows that surveyed expectations contain valuable information on the transmission of monetary policy. On average, respondents place more weight on the interest rate than on the exchange rate, and particularly so in sectors that are less exposed to international trade. Moreover, the relative weights vary substantially over time as different shocks hit the economy. We test for the presence of regime shifts in expectations due to changes to either the institutional framework or the implementation system. We find a significant effect of the introduction of the Reserve Bank Act in 1989.

Financial Markets Liberalisation and the Role of Banks, 1993

Review of Middle East Economics and Finance, 2000

This Working Paper should not be reported as representing the views of the IMF. The views express... more This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper looks at the determinants of inflation in Iran. Unlike the traditional estimates of the demand function for real money balances, the approach followed here focuses on the relationship between nominal variables and inflation. The model estimates are used to address the questions raised by the decline in inflation that occurred up to the first half of 2006, looking at the structural stability of the estimated relationships and the ability of the model to predict inflation at the end of the sample. The estimates confirm the strong relationship between money and inflation when M1 is used, with no evidence of a structural change.

New Zealand Economic Papers, 1999

Among the distortions generated by inflation, those caused by its interaction with taxation are p... more Among the distortions generated by inflation, those caused by its interaction with taxation are particularly important. Due to the non-indexation of the tax system, inflation exacerbates the inefficiencies generated by taxation. The aim of this paper is to evaluate the welfare effects of these distortions in New Zealand. By using a stylised model of the New Zealand tax system, the tax burden on capital income is calculated for different values of the inflation rate. Following Feldstein (1997a, 1997b), the paper then estimates the welfare effects of going from 2 percent 'true' inflation (net of measurement bias) to price stability. The benefits turn out to be about 0.4 percent of GDP, approximately half the size of those calculated by Feldstein for the US, the difference being mainly due to a less distortionary tax system. The permanent benefits are then compared with the one-off output loss that would be involved. As for the US, the result is supportive of price stability, but it does not hold for plausible values of some key parameters.

IMF Staff Papers, 2007

This Working Paper should not be reported as representing the views of the IMF. The views express... more This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Work absence is an important part of the individual decision on actual working hours. This paper focuses on sickness absence in Europe and develops a stylized model where absence is part of the labor-leisure decision made by workers and the production decision made by profit-maximizing firms, with insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is increased by generous insurance schemes where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.

Emerging Markets Finance and Trade, 2010

... Janine Aron acknowledges support from the British Academy (British Academy Research Developme... more ... Janine Aron acknowledges support from the British Academy (British Academy Research Development Award). ... one, two, three, four or five years (see also Devereux and Engel, 2003). This variable was interacted with the change in the log of the exchange rate, see below. ...

ABSTRACT This article reviews factors that have been affecting the recent trends in and prospects... more ABSTRACT This article reviews factors that have been affecting the recent trends in and prospects for New Zealand export sector.

Journal of Cultural Economics, 1990

W•t.at is the role of demand in the definition of public policies for he performing arts? Empiric... more W•t.at is the role of demand in the definition of public policies for he performing arts? Empirical research on consumers' behavior and the efficiency of public expenditure in the performing arts is likely to expand in Italy in the near future as an effort to find answers to the above question. The work we present here, where we try to model and estimate a demand function for live performing arts (1), has to be understood as one of these first attempts.

IMF Working Papers

Politica Economica, 1993

SSRN Electronic Journal, 2000

Financial Markets Liberalisation and the Role of Banks, 1993

Review of Middle East Economics and Finance, 2000

New Zealand Economic Papers, 1999

IMF Staff Papers, 2007

This Working Paper should not be reported as representing the views of the IMF. The views express... more This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Work absence is an important part of the individual decision on actual working hours. This paper focuses on sickness absence in Europe and develops a stylized model where absence is part of the labor-leisure decision made by workers and the production decision made by profit-maximizing firms, with insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is increased by generous insurance schemes where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern.

Emerging Markets Finance and Trade, 2010

Journal of Cultural Economics, 1990