Este capítulo tiene cuatro secciones, de las cuales esta introducción es la primera. En la segunda, analizamos la vulnerabilidad de los sectores económicos, de las firmas y de los trabajadores frente a la crisis. En la tercera, nos detenemos en los efectos de la crisis sobre los ingresos laborales de trabajadores formales e informales y estudiamos la capacidad de respuesta ante el choque negativo de la pandemia. Finalmente, en la última presentamos las conclusiones.

There is scarce empirical evidence on the impacts of drug consumption decriminalization, especially, on problematic drug use and violence. In 2001, Portugal decriminalized the consumption of all illicit drugs. In this paper, we focus on determining the short, medium, and long-term impact of Portuguese decriminalization on mortality due to drug use and homicides, from both theoretical and empirical perspectives. We model drug consumption using an intertemporal consumption model and the decisions of trafficking firms to gain market share employing an optimization model. Our results suggest a non-linear effect of decriminalization on drug consumption risk and increasing incentives for firms to expand their market share employing violence after decriminalization. Empirically, we estimate a negative short-run effect on drug-related deaths and null long-run impacts of this legal reform. In terms of homicides, we find a positive effects in a range of 28.7%-34.2% in the medium- and long-term.

We study the effect of the upsurge of natural resources income from the commodity price boom of the 2000s on the functional distribution of income. To do so, we build a general equilibrium model of Dutch disease that characterizes how natural resource windfalls affect equilibrium factor shares. The theory suggests that the response of factor shares to exogenous changes in commodity prices depends on the relative intensity of factors in the tradable and natural resource sectors. We construct estimates of income shares accruing to raw labor, human capital, physical capital, and natural resources, and quantify the effect of the resource boom on factor shares. For identification, we use a two-way fixed effects strategy and a differential exposure design to instrument commodity prices. We find that a natural resource boom negatively impacts the total labor, human capital, and physical capital shares, while the raw labor share remains unchanged. Our estimates suggest that the natural resource boom explains nearly 25.7 percent of the global decline of the total labor share during the 2000s. We also find a redistribution effect within labor income that indicates that the fall of the labor share was unevenly distributed against human capital.

The economic crisis from the Covid-19 pandemic has generated a fall in tax revenues and an increase in the need for public spending in most economies throughout the world. This situation has led to a substantial increase in the sovereign debt levels and has dramatically reduced the fiscal space of governments. For upper- middle-income countries (UMICs), current access to financing is limited and this can potentially limit the space for climate action in the short and medium run. However, delaying climate action can generate a negative signal on fiscal sustainability due to the physical and transition risks of climate change. Unsustainable production practices will result in a deterioration of the productive capacity of natural assets reducing potential tax income. Simultaneously there will be a stronger need for public spending to face the future damages associated to greenhouse gases emissions. Therefore, in order to address the current crisis, we need an integral approach that considers the climate crisis as a challenge with a high degree of urgency. For this approach to be feasible, sufficient international climate finance needs to be available, and it should help to steer relief and recovery efforts into a direction in which these are also compatible with climate targets. In this document, we propose a sovereign debt negotiation scheme in which the conditions of the debt depend on the climate policies undertaken by the debtor countries. Likewise, we point out that the feasibility of beneficial agreements for debtors and the implementation of good climate policies depend positively on the size of the debt and each country's potential to affect the current trend of climate change. For these reasons, the formation of coalitions of debtor countries can be a key factor for debt relief and the implementation of climate policies.

Spanish Abstract: Este trabajo describe las relaciones entre el entorno institucional, la economía, la distribución del ingreso y la productividad en Colombia. En particular, existe un problema de diseño institucional que fomenta la informalidad, dificulta la inclusión, inhibe la competitividad y frena el crecimiento. Las fallas de diseño institucional se manifiestan en los problemas asociados al régimen tributario, la administración de justicia, la prestación de servicios por parte del gobierno, la corrupción y la dificultad para crear empresa. A partir de las fallas identificadas se plantean posibles reformas que ayuden a impulsar un cambio institucional que ayude a corregir algunas de los problemas descritos. English Abstract: This paper describes the relationships between the institutional environment, the economy, income distribution, and productivity in Colombia. In particular, there is an institutional design problem that encourages informality, hinders inclusion, inhibits competitiveness, and slows growth. Institutional design flaws are manifested in problems associated with the tax regime, the administration of justice, the provision of services by the government, corruption, and the difficulty in creating a business. Based on the flaws identified, possible reforms are proposed to help promote institutional change to help correct some of the problems described.

Labor informality, common in Latin American economies, is both a cause of low productivity and vulnerability, and a buffer that mitigates job destruction after negative shocks. In the current circumstances, informality is also associated with a higher risk of contagion, thus reducing the willingness of households to get involved in informal activities. To understand and quantify these mechanisms, we propose an SIR model featuring a dual labor market, where households imperfectly substitute informal and formal consumption, and calibrate it to Colombian and Peruvian data. Considering a higher risk of contagion from the informal sector doubles the size of the recession, whereas having less rigidities in markets allows for a faster recovery. Targeting transfers and using selective lockdowns have a similar epidemiological effect as its non-targeted counterparts, but at a lower economic cost. The paper also casts light on the inconvenience of long lockdowns.

This book was conceived as a basic textbook in a growth course for economics students, in order to facilitate the reading and understanding of models based on mathematical techniques and derivation, as well as on intuition and real problems that can be analyzed in the light of theory. Each chapter has a main text that explains the relevance and connection of the studied model with economic facts, as well as an appendix with the complete and detailed derivation of each model. In the first part of the book, simple growth models are explained, which assume that the saving rate is exogenous, the economy is closed, and there is no public sector. The second part is dedicated to modelling the decision of agents regarding how much to save; little by little, the complexity of models is increased by incorporating government action, the role of education and innovation, and models from various sectors. In the third part, models with two generations are examined: young workers and retired older adults. This model can be used to analyze inheritance systems, endogenous birth rates, and income distribution.

Spanish Abstract: Los consumidores problemáticos de sustancias psicoactivas enfrentan riesgos de salud excepcionalmente altos. Sin embargo, por razones diversas, estos individuos no acuden a servicios de salud con la frecuencia que se requiere dadas sus condiciones de salud. La estrategia CAMAD fue un programa de reducción de daños cuyo objetivo central fue la prestación de servicios de salud a la población de habitantes de calle. Con base en la información disponible, en este documento presentamos una descripción del programa y de algunos de sus resultados. Entre los hallazgos de la investigación se destacan los siguientes: (i) El programa llegó a cerca de 53 mil personas entre septiembre de 2012 y mayo de 2016. (ii) El 70% de los usuarios no tenía seguro de salud y el 26,5% estaba en el régimen subsidiado. (iii) El 22% de los usuarios se identificó como habitante de calle. (iv) Entre quienes reportaron su ocupación, 54,8% era estudiante y 40% estudiantes de bachillerato. (v) En la población no estudiante, las mujeres representan el 26,5% de los usuarios, en el caso de los estudiantes, esta proporción fue 44%.English Abstract: Problematic users of psychoactive substances face exceptionally high health risks. However, for various reasons, these individuals do not go to health services as frequently as they should. The CAMAD strategy was a program of harm reduction whose central objective was the provision of health services to street dwellers. Based on the available information, we present a description of the program and some of their results. The following are the main findings of the paper: (i) The program reached almost 53 thousand people between September 2012 and May 2016. (ii) 70% of users did not have health insurance and 26.5% was in the subsidized regime. (iii) 22% of users was identified as street dwellers, (iv) among those who reported their occupation, 54.8% were students and 40% high school students, (v) in the non-student population, women account for 26.5% of the users, in the case of the students, this proportion was 44%.

Las negociaciones de paz emprendidas por el Gobierno Nacional y las Fuerzas Armadas Revolucionarias de Colombia –EjA©rcito del Pueblo (FARC-EP), coincidieron con un repunte de las hectAireas sembradas con coca en el paA­s. El repunte en el Airea cultivada puede estar explicado por la acciA³n de grupos armados diferentes a las FARC que buscan controlar las zonas cocaleras abandonadas por las FARC o por los incentivos que generA³ el acuerdo de paz. El contenido del cuarto punto de los acuerdos hace referencia a la soluciA³n del problema de las drogas e incluye programas de sustituciA³n de cultivos con beneficios para las familias que se acojan a dichos programas. Estos beneficios pueden haber operado como un incentivo perverso, estimulando la siembra de coca. A partir de un modelo de diferencias en diferencias para mAoltiples perA­odos, de 2012 a 2017, controlando por las polA­ticas estatales de control de oferta, se encontrA³ que en municipios donde las FARC tuvieron presencia continua durante el perA­odo de negociaciA³n, hubo un aumento de 604 hectAireas en promedio por municipio para el 2016, y 1032 para 2017. En los aA±os 2013, 2014, 2015 no se observan diferencias significativas comparado con el aA±o base 2012.

Spanish Abstract: Con la salida de las FARC, el grupo guerrillero que monopolizó el mercado de la cocaína y el mayor causante de violencia en el país, se vuelve relevante estudiar el comportamiento del mercado de las drogas y los cambios en las dinámicas de violencia. El propósito de este trabajo es analizar el impacto que tiene ser un municipio cocalero en la violencia regional y ver cómo dicho impacto se comporta después de empezados los Diálogos para la Paz en 2012. Los modelos empleados demuestran que la presencia de cultivos de coca entre los años 2000 y 2017 incrementa en 11,1% el índice de violencia, y que el impacto es 2,35% más fuerte después de 2012.English Abstract: With the departure of the FARC, the guerrilla group that monopolized the cocaine market and the main cause of violence in the country, it becomes relevant to study the behavior of the drug market and the changes in the dynamics of violence. The purpose of this paper is to analyze the impact that being a coca-growing municipality has on regional violence and to see how that impact behaves after the Dialogues for Peace began in 2012. The models used show that the presence of coca crops among 2000 and 2017 increases the violence rate by 11.1%, and the impact is 2.35% stronger after 2012.

The increase in the area cultivated with coca in Colombia has cast doubt on the country’s anti-drug strategy and has encouraged skepticism about the possibility of a complete and definitive peace. Furthermore, this perception of failure has given rise to policy proposals based on the idea that illicit crops are a criminal issue, not a development one.This paper is a complete review of the available evidence and aims at organizing the information related to this debate and shedding light on the convenience or inconvenience of certain policies. There are six highly relevant facts: (i) With respect to reducing cocaine supply, the efforts in seizures and destruction of infrastructure are more efficient than the efforts in eradication. (ii) Seizures and destruction of infrastructure may help in reducing coca plantations. (iii) There is no evidence to support the hypothesis that the consumption of cocaine in Colombia has increased. (iv) Most regions of the country have seen a decrease in the amount of coca crops. However, at least one armed group is present in the regions where the cultivated area has increased. (v) Coca growing municipalities are, on average, poorer than the rest of the country. These municipalities have a low tax revenue, and reduced levels of connectivity and institutional development. (vi) The increase in the consumption of cocaine in the United States is concentrated in a specific age group and in certain states. This fact makes it difficult to relate the increase in consumption to an exogenous increase in the supply.

Con la salida de las FARC, el grupo guerrillero que monopolizA³ el mercado de la cocaA­na y el mayor causante de violencia en el paA­s, se vuelve relevante estudiar el comportamiento del mercado de las drogas y los cambios en las dinAimicas de violencia. El propA³sito de este trabajo es analizar el impacto que tiene ser un municipio cocalero en la violencia regional y ver cA³mo dicho impacto se comporta despuA©s de empezados los DiAilogos para la Paz en 2012. Los modelos empleados demuestran que la presencia de cultivos de coca entre los aA±os 2000 y 2017 incrementa en 11,1% el A­ndice de violencia, y que el impacto es 2,35% mAis fuerte despuA©s de 2012.

Spanish Abstract: Las negociaciones de paz emprendidas por el Gobierno Nacional y las Fuerzas Armadas Revolucionarias de Colombia –Ejército del Pueblo (FARC-EP), coincidieron con un repunte de las hectáreas sembradas con coca en el país. El repunte en el área cultivada puede estar explicado por la acción de grupos armados diferentes a las FARC que buscan controlar las zonas cocaleras abandonadas por las FARC o por los incentivos que generó el acuerdo de paz. El contenido del cuarto punto de los acuerdos hace referencia a la solución del problema de las drogas e incluye programas de sustitución de cultivos con beneficios para las familias que se acojan a dichos programas. Estos beneficios pueden haber operado como un incentivo perverso, estimulando la siembra de coca. A partir de un modelo de diferencias en diferencias para múltiples períodos, de 2012 a 2017, controlando por las políticas estatales de control de oferta, se encontró que en municipios donde las FARC tuvieron presencia continua durante el período de negociación, hubo un aumento de 604 hectáreas en promedio por municipio para el 2016, y 1032 para 2017. En los años 2013, 2014, 2015 no se observan diferencias significativas comparado con el año base 2012.English Abstract: The peace negotiations undertaken by the National Government and the Revolutionary Armed Forces of Colombia (FARC), coincided with a rebound of the hectares planted with coca in the country. The rebound in the cultivated area may be explained by the action of armed groups different from FARC that seek to control the coca-growing areas abandoned by the guerrilla group or by the incentives generated by the peace accord. The fourth point of the agreements refers to the solution of the problem of illicit drugs and includes crop substitution programs with benefits for families that benefit from these programs. These benefits may have operated as a perverse incentive, stimulating coca cultivation. Using a model of difference-in-differences from 2012 to 2017 and controlling for supply-reduction policies, we found an increase of 604 hectares on average per FARC-municipality for 2016, and 1032 for 2017. In years 2013, 2014, 2015 we do not observe significant differences in relation to the base year 2012.

Los consumidores problemAiticos de sustancias psicoactivas enfrentan riesgos de salud excepcionalmente altos. Sin embargo, por razones diversas, estos individuos no acuden a servicios de salud con la frecuencia que se requiere dadas sus condiciones de salud. La estrategia CAMAD fue un programa de reducciA³n de daA±os cuyo objetivo central fue la prestaciA³n de servicios de salud a la poblaciA³n de habitantes de calle. Con base en la informaciA³n disponible, en este documento presentamos una descripciA³n del programa y de algunos de sus resultados. Entre los hallazgos de la investigaciA³n se destacan los siguientes: (i) El programa llegA³ a cerca de 53 mil personas entre septiembre de 2012 y mayo de 2016. (ii) El 70% de los usuarios no tenA­a seguro de salud y el 26,5% estaba en el rA©gimen subsidiado. (iii) El 22% de los usuarios se identificA³ como habitante de calle. (iv) Entre quienes reportaron su ocupaciA³n, 54,8% era estudiante y 40% estudiantes de bachillerato. (v) En la poblaciA³n no estudiante, las mujeres representan el 26,5% de los usuarios, en el caso de los estudiantes, esta proporciA³n fue 44%.

The book Capital in the Twenty-First Century by Thomas Piketty (2014) has renewed the public and scholar debate about wealth and income inequality. Theoretical critiques have focused their attention on a regularity pointed out by the author, namely, the growth rate of the economy is lower than the interest rate, r > g. However, two other important insights are key to understand the persistence of inequality: bequests and differences between factor prices and the marginal productivity of factors. We present an OLG model that incorporates these two elements and explores under which circumstances inequality between two social groups, rich dynasties and poor dynasties, is a long-term equilibrium result with economic growth. The model considers two goods, one essential and the other non-essential. We find that inequality between rich and poor dynasties is a long-term equilibrium when (i) the marginal productivity of labor of the essential good is bounded from above and the marginal productivity of capital in the non-essential good sector is bounded from below by a positive value; and (ii) factor remunerations are not determined by the standard economic forces of marginal product.

We claim that the standard methodology to study the effects of the reallocation of factors on growth is not adequate in the presence of biased innovations. Labor-saving innovations increase output per worker and may decrease the marginal productivity of labor. Therefore, a reallocation of labor from a sector with higher output per worker to a sector with lower output per worker may be productivity enhancing.