Sales Tax Enforcement and Business Activity: Evidence from Economic Nexus Laws - w/ Donald Bruce (Latest Version)

Abstract: The South Dakota v. Wayfair (2018) decision authorized states to impose sales tax obligations on remote sellers based on economic presence rather than physical location, prompting nearly universal adoption of economic nexus thresholds across U.S. states. While most states converged toward a $100,000 annual sales threshold, meaningful variation persists in how binding these thresholds are relative to state market size. This paper examines how economic nexus threshold exposure—measured as the threshold amount normalized by state population—affects business activity using a state-level panel from 2013 to 2023. Exploiting cross-state variation in threshold tightness following Wayfair, we estimate two-way fixed effects models with a rich set of controls and fixed effects. We find small but statistically significant negative effects of higher threshold exposure on the number of firms, establishments, and employment, with effects concentrated among very small firms (fewer than 20 employees). These results suggest that states where the nexus threshold is less binding relative to market size experience modest competitive disadvantages for physical retailers, as more online sellers remain exempt from tax collection obligations, widening tax-induced price differentials. The findings challenge the assumption that higher thresholds are neutral for economic activity and underscore that threshold exposure—not merely threshold level—is the relevant policy parameter for ensuring competitive equity between remote and local commerce.

Surfing the Black Wave: Assessing Oil Prices and Macroeconomic Tail Risk (Latest Version)

Abstract: I characterize the effect of oil price fluctuations in the full conditional distribution of economic growth using the quantile regression framework. I propose a model that includes oil price fluctuations, financial information, and current economic output, I show that this model can forecast the lowest quantiles of future GDP growth (growth-at-risk) more accurately by 23%. In addition, I find that oil price fluctuations can increase the left-tail area in the conditional GDP growth distribution for specific periods, meaning that there is an augmented recession probability that can be explained by oil price information. 

House Speeches and Government Expenditure

Following Brazil's re-democratization in 1984 and inflation control in the early 1990s, government budget control became a primary legislative responsibility. However, Brazil has experienced rising indebtedness in recent decades. I conduct textual analysis of Brazilian House representative speeches over the past 30 years to investigate whether contractionary and fiscal control terms have become less frequent in congressional discourse, and evaluate the relationship between changing speech patterns and actual fiscal policy outcomes.

Trade Openness and Non-Linearities in Brazilian Monetary Policy  - São Paulo University Periodic Journal (2023) - (link here)

(with Elano Arruda and Roberto Tatiwa)

Abstract: We investigate the existence of asymmetries in monetary policy in Brazil, considering distinct levels of trade openness. Using monthly data between 2003 and 2020, we estimate a non-linear Taylor rule with threshold effect and endogenous regressors. The results show that in the higher trade openness regime, the response to deviations of inflation expectations from its target is statistically null. In addition, there is a smoothing process in the conduct of Brazilian monetary policy and a response to the output gap in both regimes, with a greater response in the lower openness trade regime.