Andres Blanco

Assistant Professor of Economics, University of Michigan

Office: Lorch Hall 308, 611 Tappan Street, Ann Arbor, Mi 48109, USA

Phone: 734-764-2917


I am a macroeconomist working on the aggregate implications of frictions at the micro-level. My research agenda aims to answer policy-relevant questions by providing measurements of new facts, developing theories, and testing their quantitative relevance. I study: (i) the role of price-setting for inflation dynamics and monetary policy, (ii) the role of inflation in labor markets, and (iii) the role of investment frictions for aggregate capital dynamics and macroeconomic outcomes.


Research Statement

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Working papers

  1. Nominal Devaluations, Inflation, and Inequality (with Andres Drenik and Emilio Zaratiegui)

    • We study the distribution of labor income during large devaluations. Across countries, inequality falls after large devaluations within the context of a surge of inflation. Using a noble administrative dataset covering the 2002 Argentinean devaluation, we show how labor mobility and lack of union coverage of high-income workers account for the drop in inequality.

    • Paper Online Appendix Slides

  2. The Macroeconomics of Partial Irreversibility (with Isaac Baley)

    • We investigate the macroeconomic effects of partially irreversible investment arising from a wedge between the buying and selling price of capital and apply the theory to study corporate tax reforms. Corporate income tax cuts improve the allocation of capital, decrease aggregate Tobin's q, and slow down capital fluctuations.

    • Paper Online Appendix Slides

  3. A Theory of Labor Markets with Allocative Wages (with Andres Drenik, Christian Moser, and Emilio Zaratiegui)

    • We develop a model of a frictional labor market with idiosyncratic and aggregate shocks, sticky wages, and two-sided lack of commitment between workers and firms. In this environment, wages are allocative. We analytically characterize equilibrium policies and provide sufficient statistics for the prevalence of inefficient job separations and as well as labor market response to monetary shocks.

    • Paper Online Appendix Slides

Peer-Reviewed Publications

  1. Firm Uncertainty Cycles and the Propagation of Nominal Shocks (with Isaac Baley).

  2. Price Rigidity and the Relative PPP (with Javier Cravino).

  3. Optimal Inflation Target in an Economy with Menu Cost and Zero Lower Bound.

    • American Economic Journal: Macroeconomics (Vol. 13, No. 3, July 2021, pp. 108-141)

    • Paper Online Appendix

  4. Aggregate Dynamics in Lumpy Economies (with Isaac Baley)

  5. The Evolution of the Earnings Distribution in a Volatile Economy: Evidence from Argentina (with Andres Drenik, Christian Moser, Bernardo Diaz de Astarloa, and Danilo Trupkin)