WORKING PAPERS
Consumer Loans, Heterogeneous Interest Rates, and Inequality (with Marco Bonomo, Tiago Cavalcanti, Fernando Chertman, Andrew Hannon, Cezar Santos)
We examine empirically and quantitatively the impact of financial reforms on consumer welfare in Brazil. The data comprise the Brazilian credit registry combined with the matched employer-employee dataset, focusing on unsecured consumer personal loans and payroll loans, which are repaid through deductions from the borrower's paycheck. Low-income individuals consistently face higher interest rates, even after controlling for occupation, financial literacy, default probabilities, among other variables. Our model integrates life-cycle dynamics, credit types, occupations, and income shocks with endogenous default. Reforms that reduce loan interest rate spreads could significantly benefit consumers, particularly young and poor informal workers. The 2013 Loan Portability reform, aimed at enhancing banking competition in Brazil, increased welfare by 0.34\% of annual consumption.
Does Loan Portability Promote Competition? (with Marco Bonomo, Tiago Cavalcanti, Fernando Chertman)
Loan portability has been recommended as a significant instrument for promoting competition in the banking industry. In 2014, the Brazilian Central Bank (BCB) introduced a regulatory framework to facilitate consumer loan portability. In this study, we explore the spatial concentration of local banking in Brazil to investigate how this institutional change affected local credit markets. Our findings provide robust evidence that credit portability led to a reduction in interest rates and a surge in credit volume, primarily benefiting the categories of loans most affected by the regulatory change.
PUBLICATIONS
A POLÍTICA FISCAL EXPANSIONISTA QUE CONTRAI! (with Celso Costa Jr, Vladimir Teles)
No presente trabalho, analisamos a desoneração do imposto sobre o consumo de bens duráveis com o objetivo de fornecer contribuições em duas direções: a) estimar e calibrar um modelo dynamic stochastic general equilibrium (DSGE) de pequena escala que incorpore esse aspecto; e b) analisar o impacto específico dessa política nas principais variáveis macroeconômicas à luz do modelo. Os resultados sugerem que a redução da alíquota do imposto sobre produtos industrializados (IPI) sobre bens duráveis não foi a política mais adequada para estimular a atividade econômica, pois contrai em vez de expandir o produto total. Melhor seria uma redução da alíquota do imposto indireto para toda a economia.
WORK IN PROGRESS
Debt Service Matters for Economic Activity: Evidence from Revolving Credit Cards (with Fernando Chertman)