Working Papers

The Historical Legacy of (Pre?)Colonial Indigenous Settlements in Mexico[Link]

What is the long-term impact of pre-colonial ethnic institutions? I examine the consequences of the fragmentation of local indigenous communities produced by Spanish rule in Mexico. To do this I make use of unique data from 18th century pueblos—the basis of modern-day counties—to study the institutional impact that the formation of these pueblos had on current development in Mexico. I find that after controlling for alternative mechanisms, counties encompassing more historical pueblos, are more developed, and have less poverty, but are more unequal today. The effects are more latent in places where pre-hispanic roots are deeper (historical Mesoamerica and high altitude areas), suggesting the institutional impact has a pre-colonial basis.

Fragmentation of an Empire: The Political Economy of Spain and Its Colonies in the Late Bourbon Period [SSRN]

How an empire that seemed cohesive for hundreds of years could easily fragment in a decade? I present a simple computational model of Spain’s political economy and do some simulations that could help explain the rationale behind such system. I also provide an analytical narrative in which I stress the importance of the Spanish Empire’s fiscal sociology, one in which certain political enterprises (Miners, Merchants, Crown) played key roles. I maintain that the empire had an implicit political arrangement; one in which the Crown maximized tax revenue through its power in managing the transatlantic trade. It did so by coopting a small set of local American elites (In Lima and Mexico City), which gained rents from their privileged trade position. It was a stable setting while Spain had sea supremacy. The advent of the British Navy in the late 18th century disrupted everything. Thereafter, the Crown attempted to decentralize its oceanic trade through new routes, and by trying to coopt a larger set of regional elites within the empire. This tactic backfired: it only gave major power to new local elites and created incentives for political fragmentation.

Working Projects

Will you have it back? Measuring Trust through Retailers’ Refund Policies

In this paper I present an alternative measure of trust that distances from experimental and survey based approaches. I contend that it is possible to estimate trust in a real world context by locating proxies. I argue that refund policies implicitly account for the level of trust that retailers posit in their customers, and represent a tacit measure of their client’s overall trustworthiness.

The Political Economy behind Political Jurisdictions: Exploring the Size of Nations Through Agent-Based Modeling

My attempt in this paper is to provide an alternative framework to study the size of nations. I provide a robust behavioral paradigm based on standard political economy and neoinstitutional tenets - identifying the existence of two classes: a general population and a governing elite. I explore this framework through an agent based model that allows me to generate a flexible yet rigorous setup to test different scenarios.

Money Network Dynamics in Historical Perspective: Understanding the Complexity of the Mexican Banking System, 1897-1910 [With André L’huillier]

Most banking and monetary analysis rely on a top down approach that focuses mostly in the supply side. We address the problem from the exact opposite point of view, by emphasizing the demand side. Money users and the networks they create are essential to understand the success and stability of a banking and monetary system. The Mexican case in the Pofirian Era represents a well - defined scenario that allows us to test the money dynamics at the time. We build an Agent Based Model that captures the dynamics.

Political Transformation through Cultural Change: The Impact of Anglo Migration into Historical Texas [With José Torra]

Migration is a hot topic today in all the developed world. What are its global welfare effects? Within the economics profession, there is an increasing consensus that migration, overall, has a positive impact. Yet, there is a far bigger question that has not been properly analyzed: can immigrants modify the local political institutions to be more aligned with their homeland cultural values? If the answer is on the positive, open border policies could end up being very problematic (at least for the local constituents). The research project focuses on a historical study case, where migration modified the political equilibrium of the original population: Texas. Starting in late 18th Century, Anglo migrants moved to Spanish/Mexican Texas and started shaping its policies and they became independent/indifferent of the original locals. Studying (through an economic and statistical lens) how this demographic change occurred, and how it created a new sector that demanded a political change could help us comprehend better how migration can indeed end up transforming societies.

Bachelor's Dissertation

The Historical Debate on the Supply of Money: Between State Monopoly and Free Banking (Spanish)[Link]

In today’s world the possibility of competition in the money market is unthinkable; the central bank regime is thought as if it were the only viable institution. Historically this has not been the case: Most monetary economists of the past have discussed the appropriate role of the State in the money market. In general terms it is possible to identify certain schools of thought through time. It is the aim of this thesis to accurately describe and analyze the main points of each one and to provide a rough classification of them: 1) First of all, from times of Plato and Aristotle to the 14th century we can acknowledge the existence of two postures–Free minting, which ascribes a mere supervisory role or no role at all to the State and State Minting which posits that the government has the duty and the obligation to intervene in the coinage trade; 1.1) A transitional period in the 15th and 16th centuries in which the discussion is centered around the nature of “interest” and the banking industry; 2) A period that goes from the 18th to the 19th centuries. The role of the banking business has been accepted and the debates are conformed around the inter dependence of the monetary and financial systems. Three different schools emerge: a Free Banking School which adheres to the principles of Laissez-faire in the money market; a Central Banking rule bounded School which states that it is necessary to have a central monopolist entity that could centralize the national metallic reserves, by which it could provide a stable and redeemable money supply; a Central Banking discretionary School that manifests that money is endogenous to the economy, yet a Central Bank is needed for financial stability purposes. 2.1) We can identify a second transitional period in times of the Bellé Epoque of capitalism (1870-1930) which correctly takes the name of “monetary orthodoxy” and accepts the need of a Central Bank both to provide sound money–via a gold standard– and because its role as the lender of last resort of the economy; 3) A third period comes about the end of the great depression to our own time. First, a renewed Central Banking discretionary School gains prominence and articulates a second role for the Central Bank: to actively pursue policy objectives (economic activity and employment). For which it is necessary to adopt a fiat monetary system; given the stagflation problems of the 70s, a rehabilitated Central Banking rule bounded School emerges and pinpoints the importance of stabilizing consumer prices via an unchanging fiat money supply; as an alternative to this school, a Modern Laissez-Faire School appears which emphasizes the possibility of free market solutions to the money market through several available schemes: Hayek-Klein, a fiat private competition system; Selgin-White, a modern free banking approach; and Salerno-Huerta de Soto and Greenfield-Yeager as heterodox approaches. Who must manage the money supply and how it must be done, have been the greatest questions in monetary and banking history. By answering them we can also resolve the main inquires about the nature of money. It is necessary to understand the past theories in order to regain lost knowledge. I hope this thesis serves as an introduction to the topic for those who think that having a Central Bank is the only way