The recent worldwide economic conditions resulting from the financial crisis call for greater cooperation. This paper assesses the impact of trade reforms between Latin America and the Caribbean (LAC) and India and LAC and the EU (European Union) at 2020 using a global computable general equilibrium (CGE) model. The findings show that LAC-EU tariff reduction appears to be beneficial for both regions in the short run, though not so in the long run, while the LAC-India tariff reduction impact appears to be more beneficial for both economies in the long run. This important finding emphasizes the scope and opportunities for south-south cooperation in the long run.

Given that a significant proportion of the Chilean education system is financed with household resources, we present human capital contracts (HCC) as an option for higher education financing for students facing financial constraints, but who could use their expected future income flows as collateral. We analyze the feasibility of HCC implementation in Chile over a set of college majors. We find that HCC can partially fund any college major in Chile and finance some majors completely, under certain conditions. Among the variables analyzed, those affecting most severely the contract pricing are initial wage level after graduation and graduation rate.

We examine the behavior of output disparities of Mexican regions relative to the richest region, the Capital, during the period 1940-2009, and the dynamics of the output gap series of the U.S.-Mexico border region. Our estimations suggest that whilst other Mexican regions have been catching up with the Capital region, the Mexican border region has lagged behind its U.S. counterpart. Moreover, we find evidence that the economic liberalization reforms of the 1980s negatively affected the output gap of most regions, without reverting the catching-up process. The border region is a notable exception, where the reforms actually accelerated the catching-up process.

This article introduces a political economy model for studying the relationship between the vote-buying strategy of a party that has won the mayoralty of a municipality in the last election and its preferences as the governing party on the municipal political space, given its desire to maintain its position. The main result is that the governing party prefers to promote, given its clientelistic structure, the political agendas with which it selectively impoverishes worse-of f (WO) individuals; this will allow that equilibrium prices in vote markets will be reduced in a next election, and therefore, it will help enable the governing party to achieve its objective of maintaining governmental power through its vote-buying strategy in the exchange network.