Optimal Monetary Policy with Non-Homothetic Preferences (with Sebastian Diz).
International Journal of Central Banking, 2025. Vol 21, Number 2, p. 309-350.
[Link to published version] [Working Paper]
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.
Monetary Policy, Sectoral Composition and Sticky Wages (with Sebastian Diz).
Under review.
[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.
Land ownership inequality, capital-labor substitution and structural change patterns in developing countries.
[Working Paper] New WP!
Summary: I examine structural change patterns in developing countries. For this purpose, I build a two-sector open economy growth model that incorporates four key features: (i) the net export orientation of agricultural sectors, (ii) unequal distribution of agricultural land, (iii) limited access to financial markets, and (iv) a high elasticity of substitution between capital and labor in agricultural production. I calibrate the model to match empirical facts from Latin America and then I analyze the role of sector- and factor-specific productivity improvements. The model explain the process of structural change, income inequality, and trade dynamics observed in this region during the period 1990–2018.
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.
Agricultural Productivity, Sectoral Composition and Commodity Trade (with Xavier Raurich).
Structural Change, the Construction Sector and Economic Growth (with Edgar Cruz).
Output Volatility and the Composition of the Agricultural Sector in Emerging Countries.
Energy shocks and Fiscal Policy in UK (with Francesco Fusari and Claudia Udroiu)
Economic Impact of Non-Pharmaceutical Interventions Adopted During Covid-19: the Case of Paraguay (in Spanish) (with Gustavo Rivas).
Latin American Research Review.