Grading latin american presidents : a view from the stock markets
Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not result from local events, we introduce a global twin portfolio and a regional return. The twin portfolio for a country reports the return of a combination of world stocks that each month has the same industrial composition as that one country’s stock index. These benchmark external conditions are most volatile: they vary between a 295% appreciation (or tailwind under some interpretations) and a 30% reduction (or headwind) in asset prices over extreme four-year presidencies in our sample. We interpret the gap of national performance over these counterfactual returns as a proxy for the quality of domestic policies during a given presidency, as seen from the standpoint of equity investors. We apply this approach to seven Latin American countries from 1980 until 2011. From this perspective, Colombia, Peru and Chile stand out as the countries that have implemented the best long run policies over the sample. In addition, we provide a grading of relative presidential performance.
Main Authors: | , |
---|---|
Format: | Documento de trabajo biblioteca |
Language: | eng eng |
Published: |
Universidad Católica Argentina. Facultad de Ciencias Económicas
2012
|
Subjects: | BENCHMARKING, MERCADO DE VALORES, DESARROLLO ECONOMICO, PRESIDENTES, |
Online Access: | https://repositorio.uca.edu.ar/handle/123456789/2280 |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
id |
oai:ucacris:123456789-2280 |
---|---|
record_format |
koha |
spelling |
oai:ucacris:123456789-22802024-03-21T10:58:20Z Grading latin american presidents : a view from the stock markets Cruces, Juan José García Cicco, Javier BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not result from local events, we introduce a global twin portfolio and a regional return. The twin portfolio for a country reports the return of a combination of world stocks that each month has the same industrial composition as that one country’s stock index. These benchmark external conditions are most volatile: they vary between a 295% appreciation (or tailwind under some interpretations) and a 30% reduction (or headwind) in asset prices over extreme four-year presidencies in our sample. We interpret the gap of national performance over these counterfactual returns as a proxy for the quality of domestic policies during a given presidency, as seen from the standpoint of equity investors. We apply this approach to seven Latin American countries from 1980 until 2011. From this perspective, Colombia, Peru and Chile stand out as the countries that have implemented the best long run policies over the sample. In addition, we provide a grading of relative presidential performance. 2019-05-13T17:11:48Z 2019-05-13T17:11:48Z 2012 Documento de trabajo Cruces, J.J., García-Cicco, J. (2012, junio). Grading latin american presidents : a view from the stock markets [en línea]. Documento de trabajo No. 37. Escuela de Economía “Francisco Valsecchi”. Facultad de Ciencias Económicas. Universidad Católica Argentina. Disponible en: https://repositorio.uca.edu.ar/handle/123456789/2280 https://repositorio.uca.edu.ar/handle/123456789/2280 eng eng Acceso Abierto https://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf AMERICA LATINA Universidad Católica Argentina. Facultad de Ciencias Económicas |
institution |
UCA |
collection |
DSpace |
country |
Argentina |
countrycode |
AR |
component |
Bibliográfico |
access |
En linea |
databasecode |
dig-uca |
tag |
biblioteca |
region |
America del Sur |
libraryname |
Sistema de bibliotecas de la UCA |
language |
eng eng |
topic |
BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES |
spellingShingle |
BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES Cruces, Juan José García Cicco, Javier Grading latin american presidents : a view from the stock markets |
description |
Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not result from local events, we introduce a global twin portfolio and a regional return. The twin portfolio for a country reports the return of a combination of world stocks that each month has the same industrial composition as that one country’s stock index. These benchmark external conditions are most volatile: they vary between a 295% appreciation (or tailwind under some interpretations) and a 30% reduction (or headwind) in asset prices over extreme four-year presidencies in our sample. We interpret the gap of national performance over these counterfactual returns as a proxy for the quality of domestic policies during a given presidency, as seen from the standpoint of equity investors. We apply this approach to seven Latin American countries from 1980 until 2011. From this perspective, Colombia, Peru and Chile stand out as the countries that have implemented the best long run policies over the sample. In addition, we provide a grading of relative presidential performance. |
format |
Documento de trabajo |
topic_facet |
BENCHMARKING MERCADO DE VALORES DESARROLLO ECONOMICO PRESIDENTES |
author |
Cruces, Juan José García Cicco, Javier |
author_facet |
Cruces, Juan José García Cicco, Javier |
author_sort |
Cruces, Juan José |
title |
Grading latin american presidents : a view from the stock markets |
title_short |
Grading latin american presidents : a view from the stock markets |
title_full |
Grading latin american presidents : a view from the stock markets |
title_fullStr |
Grading latin american presidents : a view from the stock markets |
title_full_unstemmed |
Grading latin american presidents : a view from the stock markets |
title_sort |
grading latin american presidents : a view from the stock markets |
publisher |
Universidad Católica Argentina. Facultad de Ciencias Económicas |
publishDate |
2012 |
url |
https://repositorio.uca.edu.ar/handle/123456789/2280 |
work_keys_str_mv |
AT crucesjuanjose gradinglatinamericanpresidentsaviewfromthestockmarkets AT garciaciccojavier gradinglatinamericanpresidentsaviewfromthestockmarkets |
_version_ |
1794795073151434752 |