Publications
The Evolving Landscape of Tourism, Travel, and Global Trade since the Covid-19 Pandemic. Research in Globalization, 2024 (joint with W. Leimgruber). (link.)
Accounting for Real Exchange Rates in Emerging Economies: The Role of Commodity Prices. International Review of Economics and Finance, 2022 (joint with F. Dzikpe) (link).
International Risk Sharing in Emerging Economies. International Finance, 2020 (link). online appendix (pdf).
Informality and International Business Cycles. Journal of International Financial Markets, Institutions & Money, 2019 (link)
Financial Intermediation and Real Estate Prices Impact on Business Cycles: A Bayesian Analysis. North American Journal of Economics and Finance, 2018 (link)
Cyclical wage movements in emerging markets compared to developed economies: A general equilibrium comment. The Journal of International Trade & Economic Development, 2018 (link). (Highlights link)
The Impact of Credit and Fiscal Policy under a Liquidity Trap. North American Journal of Economics and Finance, 2017 (link).
Financial Conditions and Labor Productivity over the Business Cycle. Economics Letters, 2017 (link). online appendix (pdf).
Financial Intermediation, Consumption Dynamics, and Business Cycles. Economic Modelling, 2017 (link).
Working Papers
Firm Dynamics, Informality, and Monetary Policy (pdf).
A significant structural characteristic of many developing countries is the presence of a large shadow or informal economy, which often serves as a form of insurance during economic downturns. Despite this understanding, the impact of the informal economy on inflation and output dynamics in these countries is not well understood. This study investigates the extent to which monetary policy can stabilize economies with a large informal market.
First, we use VAR analysis to provide new evidence showing that the labor informality rate responds counter-cyclically to monetary policy shocks. Second, we explore the transmission mechanism of monetary policy through a two-sector New Keynesian (NK) model that incorporates endogenous firm entry. This analysis allows us to examine the role of informality in sectoral reallocation, inflation, and output dynamics.
Our findings indicate that, under a reasonable calibration of the model, the existence of a flexible informal market leads to a lower sacrifice ratio in response to monetary policy surprises. This suggests that the presence of informality enhances the effectiveness of monetary policy.
Cycles and Trends in Commodity Exporting Economies: A Bayesian Investigation (pdf, slides).
Recent literature has documented a prominent role for commodity price shocks in driving fluctuations in emerging markets (Dreschel and Tenreyro 2018, Fernandez et al. 2018.) Our study adds to this literature by considering the case of advanced commodity exporting economies, as well as asking how important are commodity shocks for understanding the high observed volatility of real exchange rates. Specifically, we carry out a quantitative examination of the well-known sources of business cycles in small open economies, with emphasis on commodity exporting countries. We estimate a standard open economy model with Bayesian methods for the cases of Mexico and Canada -two oil producing countries. We measure the relative contribution of both trend and transitory components of productivity, interest rate shocks, and commodity price shocks to the volatility of macroeconomic variables. We find that transitory shocks to productivity along with commodity price shocks explain a sizeable share of the volatility of macroeconomic aggregates as well as the real exchange rate. Our results are thus suggestive of the importance of commodity prices for the conduct of stabilization policy in these economies.
Commodity prices and informality in small open economies. (slides).
This paper studies the transmission of commodity price shocks in economies with a large informal sector. First, I provide novel empirical evidence that the informality rate increases in response to higher commodity prices. This new fact qualifies the commonly-held view that informal employment generally works as an insurance mechanism against shocks. Second, I develop a model of a small open commodity exporting economy with endogenous firm entry to analyze the transmission of commodity price shocks on sectoral (formal and informal) labor market and aggregate dynamics, as well as movements of the real exchange rate and capital flows. I find that the income effect resulting from commodity prices can be reconciled with the empirical facts when there is high substitutability across goods.