I’m a Research Economist in the Monetary Research Division at Banco de México. I earned my Ph.D. in Economics from the Pontificia Universidad Católica de Chile.
My research lies in applied macroeconomics, with interests in monetary policy, international macroeconomics, and international finance.
E-mail: frantorrealba [at] gmail.com | francisca.torrealba [at] banxico.org.mx | Link CV
Abstract. This paper evaluates the effects of U.S. Large-Scale Asset Purchases (LSAPs) on emerging economies (EMEs), focusing on external corporate bond credit as a key transmission channel. To estimate these effects, I use a panel Bayesian VAR model with U.S. LSAP shocks identified by Swanson (2021), defining credit as the share of long-term, USD-denominated bonds in total external credit to the non-financial corporate (NFC) sector in EMEs. The main findings are: (i) a contractionary LSAP shock significantly reduces this ratio, coupled with financial and real economic strains in EMEs, and heightens global risk aversion; (ii) LSAP shocks explain approximately 40% of the variation in global risk aversion and 33% of the fluctuation in external corporate bond credit in EMEs; (iii) the external corporate bond credit ratio is a primary propagation mechanism for LSAP shock to real variables. When firms have limited access to financing alternatives beyond long-term, USD-denominated bonds, higher relative financing costs lead to a steeper decline and slower recovery in GDP and investment in EMEs; and (iv) small open advanced economies (SOAEs) with developed financial markets exhibit milder responses to LSAP shocks, with external corporate bond credit playing a negligible role.
Presentations:
LACEA-LAMES Annual Meeting and the LACEA Mentoring Workshop for Ph.D. candidates, Universidad de la República, Montevideo, Uruguay, in November 2024.
SECHI Annual Meeting, Universidad Andrés Bello, Concepción, Chile, in September 2024.
Macroeconomic Seminars, Pontificia Universidad Católica de Chile, Santiago, Chile, in September 2023.
Workshop for Ph.D. students in Economics, Pontificia Universidad Católica de Chile, Santiago, Chile, in November 2023.
Market Financial Distress: The State-Dependent Effects of Fed Asset Purchases on Emerging Economies [PDF]
Abstract. This paper explores whether the spillover effects of U.S. LSAPs on EMEs are amplified during periods of global financial market distress. Using LSAP shocks identified by Swanson (2021), a panel of EMEs, and a smooth transition local projection model, I allow the impact of the U.S. unconventional monetary policy to vary with the degree of global financial market tensions. Under financial market stress, LSAP expansions improve global market conditions and quickly reduce risk aversion, boost capital inflows from the U.S., and enhance financial and real conditions in EMEs for over a year. These results are about twice as large as those from a linear model. In contrast, under stable market conditions, LSAP expansions lead to milder and short-lived impacts, with global risk aversion, real activity, and country spreads moving in the opposite direction in the early months. The difference between market regimes may stem from a nonlinear international risk-taking channel influenced by changes in risk aversion, confidence, and economic expectations among market participants. Lastly, LSAP effects are stronger internationally than in the U.S., exceeding other asymmetries like sign-dependent effects.
Presentations:
31st International Conference Computing in Economics and Finance, Universidad de Chile, Santiago, Chile, in July 2025
Workshop for Ph.D. students in Economics, Pontificia Universidad Católica de Chile, Santiago, Chile, in November 2024
