Refereed publications
Real exchange rate and export surge episodes: What sectors take advantage of the real exchange rate stimulus? [In press Structural Change and Economic Dynamics (SCED)]
What are the main characteristics of sectors that take advantage of the real exchange rate stimulus after a large and long-lasting devaluation? How important is the level of the real exchange rate (RER) for the take-off of new export sectors? In this paper, we aim to answer these questions by analyzing the development of export sectors in Argentina during the period 2003-2008, after the crisis and large devaluation of 2002. This six-year period shows the highest number of sectors with export surge episodes from 1980 to 2015 and a large change in the RER level compared to the previous decade. The main hypotheses are that (i) labor-intensive sectors are more responsive to exchange rate levels because non-tradable costs prevail in their production function, and (ii) the development of new export sectors occurs in sectors close to already competitive sectors. Our results are summarized as follows. First, we find that the probability of export surge episodes increased 2.5% by each standard deviation of the higher labor intensity index during 2003-2008. Second, we show that export surges are more likely to occur in sectors related to already competitive sectors. Third, when assessing the cross-industry kinds of linkages, we find evidence that the probability of an export surge episode is higher in the upstream sector of those already competitive. Finally, the new export volumes in sectors with export surge episodes show persistent dynamics despite the end of the period of currency competitiveness, a signal of trade hysteresis.
From macro to micro and macro back: macroeconomic trade elasticities in a developing economy. With Martín Rapetti. [In Press Structural Change and Economic Dynamics (SCED)] .
A long tradition in economic theory has seen the real exchange rate (RER) as a key determinant of trade performance. Several empirical studies, however, have found low estimates of macro trade elasticities and, as a result, questioned this argument. In this paper, we show that to understand and estimate the effect of RER on trade performance, it is crucial to explore the existence of heterogeneous responses of individual products to RER movements. Using trade data from Argentina, we employ the Mean Group method to estimate macro trade elasticities by individual products disaggregated at four digits of the SITC; rev.2. We find a wide range of heterogeneous responses of exports and imports to RER movements at the individual product level. We find that the estimated RER-elasticities in differentiated products and labor-intensive manufacturing goods are substantially larger than those of primary and homogeneous products. Based on the estimated elasticities at the product level, we obtain a “low” aggregate RER-elasticity of exports when we weigh them by the country's trade basket. We show that this result is a consequence of Argentina’s economic structure, a country whose exports are heavily specialized in primary and homogeneous products. Our results are important because they help build a bridge between two conflicting views in the RER-economic development literature. Even in countries with “low” aggregate macro RER-elasticities, the real exchange rate may be an important variable for economic performance. An undervalued RER, for instance, may facilitate economic growth by stimulating investment in activities producing more complex/differentiated goods in countries that specialize in the production of primary and homogenous goods and, as a result, have “low” trade elasticities. This seems to be the case of several countries in Latin America, including Argentina.
El potencial exportador verde de la Argentina: un análisis del espacio producto verde. En Desarrollo Económico. Con M. Feole, M. Gutman y S. Bercovich.
¿Es posible armonizar una estrategia de desarrollo exportador verde con la aceleración del crecimiento económico en Argentina? ¿Hacia qué sectores deben dirigirse los esfuerzos de política pública para lograrlo? Para responder estas preguntas el presente artículo el presente artículo construye el espacio-producto “verde” a 6 dígitos de desagregación del sistema armonizado de comercio internacional y se analiza la complejidad económica asociada a cada uno de sus productos, así como sus conexiones con los sectores ya competitivos del país. De esta forma, se pueden ponderar los beneficios económicos asociados a productos que brindan servicios ambientales directamente o son piezas claves para actividades que disminuyen las emisiones de gases. Los principales resultados se resumen de la siguiente manera: (i) los productos verdes, en general, son productos complejos y su desarrollo aceleraría el crecimiento económico de los países; (ii) no obstante, los productos verdes más próximos a las capacidades productivas actuales de Argentina son de baja complejidad y con bajo aporte al crecimiento económico; (iii) por lo tanto, se necesitan políticas productivas que maximicen la complejidad de la canasta exportadora verde a desarrollar y minimice el esfuerzo productivo para realizarlo. A tal fin se proponen distintos criterios de selección que decantan en 30 productos que podrían ser el puntapié inicial para una estrategia de desarrollo exportador verde para Argentina.
Mapping social conflicts in natural resources: a text-mining study of extractive activities. With Ramiro Albrieu. CEPAL review no. 131 p. 29-59
Applying text mining techniques, a methodology was developed to measure the number of social conflicts related to the exploitation of non-renewable natural resources. The study focuses on conflicts in four mining countries (Australia, Canada, Chile and Peru) between 2003 and 2016, based on more than 20,000 articles from the leading newspapers of each country. A statically significant correlation was found between the main index and mineral rents as a percentage of gross domestic product (GDP). However, the results should be interpreted with caution since endogeneity issues have not been addressed and the indices could be biased by various, country-specific factors. This study’s main outcome is a database with different indices of soft conflicts related to the exploitation of non-renewables natural resources and its media coverage in Australia, Canada, Chile and Peru.
Inflation Targeting, Disinflation and Debt Traps in Argentina. With Emiliano Libman. [In Press European Journal of Economics and Economic Policies: Intervention (EJEEP) 2019] . Download
This paper highlights the role of external indebtedness and the degree of inflationary inertia in order to assess the effectiveness and the sustainability of Inflation Targeting during disinflation episodes. As the recent Argentinean experience illustrates, a sluggish inflation rate and a significant current account deficit may render difficult the stabilization process, weakening the credibility of monetary policy. To illustrate the point, we built a model that shows that fast inflation adjustments and a slow build-up (or a low initial level) of external debt are key preconditions to successfully implement and sustain Inflation Targeting. When inflation adjusts slowly or external debt builds up fast, the economy may be placed on an unstable trajectory, and the authorities may be forced to abandon the target or the entire Inflation Targeting regime.
Determinants of bank efficiency: evidence from the Latin American banking industry. With Ignacio Jiménez-Hernandez and Javier Saez-Fernandez, 2019. Applied Economic Analysis. Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/AEA-09-2019-0027
The purpose of this paper is to analyze a variety of factors that can explain the differences in commercial bank efficiency among 17 countries in Latin America (LatAm). In a first stage, data envelopment analysis (DEA) and conditional efficiency analysis techniques are used to assess the relative efficiency level of 409 banks for the 2014-2016 period. The conditional efficiency approach considers environmental variables (that are beyond the manager’s control), which could influence the shape and the level of the boundary of the attainable set. In the second stage, the resulting conditional efficiency scores are correlated with internal variables (those that are under the manager’s control), which might affect the distribution of the inefficiencies. For this purpose, an econometric approach developed by Simar and Wilson (2007) is used. First stage scores reveal the heterogeneity of average efficiency within the region. Regarding the factors that may explain the differences in performance in the LatAm banking sector, the results allow us to state that certain internal variables such as bank size, the ratio of loans to total assets and the ratio of non-performing loans show the expected relationship to efficiency, in line with much of the previous literature. This is the first time that conditional efficiency and Simar and Wilson (2007) approaches have been applied at the same time to analyse the LatAm banking industry.
Real exchange rate and export performance in Argentina, 2002–2008. Journal of Post Keynesian Economics, 40(1), pp.75-94 / 2017 with Martín Rapetti.
Between 2002 and 2008, Argentina experienced a phase of very high and sustained economic growth. During this period, macroeconomic policy aimed to preserve a stable and competitive real exchange rate (SCRER). There is controversy on whether the SCRER policy was a key factor fostering growth and, even more, on whether it helped promote the expansion of tradable activities and exports. We use a methodology to detect episodes of export surges among Argentina’s export industries and find that labor-intensive industries—especially low- and medium-technology manufactures—experienced the highest proportion of export surges within this period. We also find that between 1980 and 2015, the highest proportion of surges in total exports occurred during the 2003–8 period. The performance of export of services was also particularly dynamic during this period. This evidence suggests that the SCRER policy was instrumental for export surges in Argentina during 2002–8.
Minería de Datos, Conflictos Sociales y Explotación de Recursos Naturales: Un Aporte Metodológico. Compendium: Cuadernos de Economía y Administración, 4(7). Palazzo, G., 2017 (In Spanish). Also, this project was awarded “Young Economists 2014” - South American Network of Applied Economics.
Using Text Mining techniques we have created a methodology that measures the quantity of sociopolitical conflicts related with the exploitation of natural resources. We focused on conflicts occurred in Argentina among 1996 to 2014, taking into account of 1.758.747 piece of news of one of the principal Argentine newspapers. As a result we have generated a framework easily extensible to all Latin American countries and we have concluded about the relationship between social conflicts and natural resources in Argentina.