Research

This paper studies earnings inequality and dynamics in Argentina between 1996 and 2015. Following the 2001–2002 crisis, the Argentine economy transitioned from a low‐ to a high‐inflation regime, while collective bargaining and the minimum wage gained influence. This transition was associated with a persistent decrease in earnings dispersion and cyclical movements in higher‐order moments of the distribution of earnings changes. To shed light on the changing nature of wage rigidity during this period, we develop a new method to estimate regular‐wage processes. As the Argentine economy transitioned from low to high inflation, the monthly frequency of regular‐wage changes almost doubled, while the distribution of regular‐wage changes morphed from having a mode around zero and positive skewness to having a positive mode and more symmetric tails. 

Farm size and land allocation are important factors in explaining lagging agricultural productivity in developing countries. This paper examines the effect of land market imperfections on land allocation across farmers and aggregate agricultural productivity. We develop a theoretical framework to model the optimal size distribution of farms and assess to what extent market imperfections can explain non-optimal land allocation and output inefficiency. We measure these distortions for the case of Guatemala using agricultural census microdata. We find that due to land market imperfections aggregate output is 19% below its efficient level for both maize and beans and 31% below for coffee, which are three major crops produced nationwide. We also observe that areas with higher distortions show higher land price dispersion and less active rental markets. The degree of land market distortions across areas co-variate to some extent with road accessibility, ethnicity, and education. 

Substituting maintenance of existing fixed assets for investment in new assets, and thus affecting their depreciation, can play a major role in the economic decisions of low-income agents. We develop a theoretical framework that shows that poorer households, which generally face relatively higher adjustment (moving) costs and more credit constraints, will adjust their home maintenance decisions to a higher degree than richer households after an income change. We test our predictions using a panel of homeowners from the American Housing Survey for 1997-2011. We find that the income elasticity of maintenance is higher among low- versus high-income households and that the adjustment differences are more acute for permanent than for transitory income changes. For every dollar increase in the estimated permanent and transitory income, home maintenance expenses will increase by 5.2 and 2.9 cents in the lower income tertile and by zero and 0.5 cents in the upper tertile. 

Using a large panel of countries during the period 1950–2009, we estimate the inflation thresholds above which its association with economic growth is expected to be negative, taking into account differences in institutions across countries. First, in line with previous literature, we find that the estimated threshold is substantially higher for developing countries compared to that of developed countries. However, we further show that the inflation threshold in developing economies falls when we consider reduced groups that exceed certain levels of institutional quality. We also find that the cost of inflation increases with the quality of institutions. 

We examine the role of inventories and capacity utilization (of both capital and labor) for the propagation of business cycle fluctuations. We document a new set of facts regarding the U.S. cyclical regularities of inventories and capacity utilization. First, we find that capital utilization and the flows of services from both capital and labor are procyclical, and comove with the holdings of inventories. Second, we find that labor utilization is procyclical as well, but is weakly negatively correlated with inventories. We build a model that accounts for these facts, and also accounts for the stylized inventory facts, i.e., inventory holdings are procyclical, while the inventory-to-sales ratio is countercyclical. The analysis is centered on the effects of two possible shocks: preference (demand) shocks and technology shocks. Our model shows that inventories and the rate of capital utilization are mostly complements, while inventories and the rate of labor utilization are mostly substitutes. It further shows that temporary demand shocks emphasize the role of inventories as being a “shock absorber,” whereas high-persistence demand shocks, as well as technology shocks of any persistence, emphasize the role of inventories as being a complement to consumption. 

This paper examines the dynamics of volatility across major global exchanges for corn, wheat and soybeans in the USA, Europe and Asia. We follow a multivariate GARCH approach and account for the potential bias that may arise when considering exchanges with different closing times. The results indicate that agricultural markets are highly interrelated and there are both own- and cross-volatility spillovers and dependence among most of the exchanges. In particular, Chicago plays a major role in terms of spillover effects over other markets. Additionally, the level of interdependence between exchanges has only increased in recent years for some commodities. 

The big picture issue this paper intends to address is on the incentive aspects of a multilateral trade liberalization. The paper builds on a framework originally introduced in Grossman and Helpman’s The Politics of Free-Trade Agreements (1995). The aim of that work was to explain the viability of free trade agreements (FTAs) between two countries in a political-economy framework. A simple extension to a three-country setting allows us to analyze whether FTAs are “building blocs” or “stumbling blocs”. An illustration with specific functional forms serves to find conditions under which FTAs are, somehow, partial building blocs, i.e., a bilateral liberalization can be feasible when multilateral liberalization is not. 

This paper studies the asymmetries that are claimed to arise in the real economy as a response to monetary policy shocks. It follows Lo and Piger’s (2005) regime-switching specification in order to investigate time variation in the response of the transitory component of output to monetary shocks in Argentina. The results suggest time variation in the coefficients that describe the response of output, which can be well explained by a dummy variable indicating the phase of the cycle at the time the policy is applied. We also find support to Friedman’s “plucking” view of economic fluctuations, while other two features of the shocks (direction and size of the monetary policy) explain strongly the business cycle of Argentina. 

Reprinted in Spanish as “Política monetaria y asimetría en los ciclos económicos de la Argentina,” Revista de Economía Política de Buenos Aires, Vol. 15, 99-122, 2016. 

This paper builds a time series for vacancies in Argentina and shows the path of the Beveridge curve during the period 2000-2018. We use a novel dataset from a survey that collects vacancy postings since 2008 and combine it with a print help-wanted index published from 2000 through 2014. We present, as a result, a job vacancy series long enough to cover six recessions in addition to the 2001 crisis. 

Este trabajo examina formalmente los efectos de los shocks macroeconómicos sobre las principales variables del mercado laboral argentino. Estimamos dichos shocks en un modelo dinámico, estocástico y de equilibrio general calibrado para una pequeña economía abierta con fricciones de búsqueda e informalidad laboral. Los resultados muestran que el modelo logra reproducir las principales fluctuaciones del mercado laboral. En particular, replica la correlación negativa entre el empleo formal e informal y la alta volatilidad de las variables del mercado de trabajo. Asimismo, el presente artículo apunta en la dirección de desarrollos ulteriores de modelos con fricciones sobre el mercado de trabajo que nos permitan entender mejor cómo se transmiten y persisten las perturbaciones. 

El carácter procíclico de los agregados monetarios es un hecho que ha sido explicado por la presencia del multiplicador monetario de carácter endógeno. Desde esta perspectiva, la parte de los agregados que corresponde a los depósitos bancarios es la que se correlaciona positivamente con el nivel de actividad. En este trabajo analizamos los hechos estilizados que hacen a la presencia de un multiplicador endógeno utilizando un modelo de equilibrio general dinámico y estocástico (DSGE) calibrado para la economía argentina. De acuerdo con los resultados, este multiplicador presenta características particulares en una economía con amplia volatilidad como la argentina. 

Is there any inflation level above which the inflation-growth nexus changes of sign? Eventually, do these thresholds differ among developed and developing countries? Finally, how smooth is the eventual transition from one regime to another in these groups of economies? In a recent paper, we intend to answer these questions, finding the following results: (i) there is an estimated threshold of 4.1% for industrialized countries, while for non-industrialized countries the threshold is considerably higher: 19.1%; (ii) the speed of transition is relatively smooth in the first group, but for developing economies inflation rapidly has negative effects on growth once it exceeds the threshold; and (iii) the inflation threshold falls to 7.9% by selecting a reduced group of developing countries, according to a measure associated with institutional quality.