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Seminarios académicos y conferencias

Constantino Hevia, Universidad Torcuato Di Tella

"The macroeconomics of Itaipu: an open economy model of a large spending shock"

3 Mayo 2018 - 17:00 hrs.

Sala 209, Facultad de Ciencias Económicas y Administrativas UC

Abstract: In this paper, we use the construction of the Itaipu hydroelectric dam in Paraguay as an experiment to analyze the impact of a large and protracted increase in government spending. Financing the construction of the dam did not require the government to levy any tax, as it was completely financed by Brazil through debt that was to be repaid by future electricity exports from Itaipu. We use an open economy model with tradeable and non-tradable goods to measure the multiplier effect of such a large spending shock.