Research
PUblications
Optimal Monetary Policy with Non-Homothetic Preferences (with Sebastian Diz).
Accepted at the International Journal of Central Banking.
Summary: We explore the optimal design of monetary policy in a multi-sector model where agents' preferences are non-homothetic. We find that the introduction of a minimun consumption requirement reduces the weight on food inflation in the optimal index that the monetary authority should target. In this paper, we identify three reasons for such prescription.
Agricultural Composition and Labor Productivity (with Xavier Raurich).
Journal of Development Economics, 2022. Vol 158, doi.org/10.1016/j.jdeveco.2022.102934.
[Link to published version] [Working Paper] [Code] [Data]
Summary: Labor productivity differences between developing and developed countries are much larger in agriculture than in non-agriculture. We show that differences in agricultural composition across countries explain part of the differences in labor productivity. To this end, we classify agricultural products into capital-intensive and labor-intensive agriculture, and we use a multi-sector growth model that generates transitional dynamics consistent with patterns of structural change observed in Brazil during 1960-2018 and with cross-country data.
Agricultural Trade and Structural Change: Evidence from Paraguay.
The B.E. Journal of Macroeconomics, 2021. Vol. 21(2), pages 773-799, June.
[Link to published version] [Working Paper version]
Summary: I study how international trade affects structural change in an agricultural exporting country. I calibrate a three-sector growth model to quantify the role of international trade in explaining structural change patterns observed in Paraguay, a country that experienced a significant rise in net agricultural exports during 1962–2012.
Working papers
Monetary Policy, Sectoral Composition and Sticky Wages (with Sebastian Diz).
Submitted.
[Working Paper] New Version!
Summary: Using a two-sector New Keynesian model with flexible prices in agriculture, sticky prices in non-agriculture, sticky wages in both sectors and idiosyncratic productivity shocks, we study what is the optimal measure of inflation that a central bank should target given the sectoral composition of the economy. This measure is given by the weights assigned to inflation in each sector, such that welfare losses due to nominal frictions are minimized.
Work in progress
Public Spending Composition and Aggregate Volatility in an Emerging Economy (with Zulma Barrail).
This project received the 2020 Latin America Early-Career Scholar Program Award from the Becker Friedman Institute at the University of Chicago.
[Draft coming soon]
Summary: Public spending in the form of capital investment has a direct impact on long term economic growth, particularly in developing countries where the initial stock of capital is low. We take a look into public spending and ask what are the business cycle implications of its composition. We illustrate the effect of public spending composition on the transmission of exogenous disturbances to emerging economies. We also examine how other typical forms of financial imperfections in emerging economies amplify or dampen the effect of public spending composition on the transmission of exogenous shocks.
Structural Change across Regions in Japan (with Saumik Paul and Kyoji Fukau).
[Draft coming soon]
Summary: We study the patterns of structural change across 47 prefectures in Japan during the period 1955-2008. We document that structural change at the country level is mostly explained by structural change within regions. The reallocation of employment across prefectures accounts for a smaller fraction of structural change at the country level. To account for these patterns we build a multi-sector and multi-region model of structural change with trade in goods and migration across prefectures.
Structural Change, the Construction Sector and Economic Growth (with Edgar Cruz).
[Draft coming soon]
Summary: The shift of employment from agriculture to manufacturing has been a feature of economic growth in advanced countries. However, current developing economies face premature deindustrialization. We document that, in developing countries, employment moves from agriculture to the construction sector instead of manufacturing. We argue that this is driven by demand for housing, infrastructure and by low employment mobility barriers between agriculture and construction. Since the construction sector suffers from a lack a productivity growth in both developed and developing countries, this is an apparent constraint to economic growth. In this paper, we show that this is not the case, since an increasing share of activity in the construction sector implies more capital available for other sectors.
Financial Constraints, Structural Change and the Informal Sector (with Edgar Cruz and Xavier Raurich).
Trade Openness and Structural Transformation (with Saumik Paul).
Policy papers
Economic Impact of Non-Pharmaceutical Interventions Adopted During Covid-19: the Case of Paraguay (in Spanish) (with Gustavo Rivas).
Latin American Research Review.