Photo by Hagit Caspi
Ph.D. Candidate, University of California-Berkeley
I am a fifth year student at the Economics Department of the University of California-Berkeley. My fields are Macroeconomics and International Economics. Before coming to Berkeley, I got a Master and B.A. degree in Economics at the Universidad de Chile.
I am on the job market in 2019-2020 and I will be available for interviews at the European Job Market in Rotterdam and at the 2020 ASSA meeting in San Diego.
JOB MARKET PAPER
Fireside Chats: Communication and Consumers’ Expectations in the Great Depression.
Motivated by an increasing interest from economic authorities to use communication as a policy tool, I use regional variation in radio exposure in 1930 to analyze the impact of President Franklin D. Roosevelt's 1935 speech in which he showcased the introduction of important social policies. I document that states and cities with higher exposure to the announcement exhibited a significant increase in spending of durable goods. I transcribed weekly data on banks debits and show that cities one standard deviation more exposed to the speech increased their bank debits by 3.6% following the speech. I provide evidence that suggests that this result is not driven by wealth or other potentially confounding variables. To better understand these results, I develop a model where consumers live in a multi-region monetary union, have sticky information and consume durable and non-durable goods to show how regions with more informed consumers increase their spending after a policy announcement, similar to FDR's.
WORK IN PROGRESS
Inflation Expectations as a Policy Tool?, NBER Working Paper No. 24788 (with Olivier Coibion, Yuriy Gorodnichenko and Saten Kumar) Accepted for publication at Journal of International Economics
We assess whether central banks may use inflation expectations as a policy tool for stabilization purposes. We review recent work on how expectations of agents are formed and how they affect their economic decisions. Empirical evidence suggests that inflation expectations of households and firms affect their actions but the underlying mechanisms remain unclear, especially for firms. Two additional limitations prevent policy-makers from being able to actively manage inflation expectations. First, available surveys of firms’ expectations are systematically deficient, which can only be addressed through the creation of large, nationally representative surveys of firms. Second, neither households’ nor firms’ expectations respond much to monetary policy announcements in low-inflation environments. We provide suggestions for how monetary policy-makers can pierce this veil of inattention through new communication strategies. At this stage, there remain a number of implementation issues and open research questions that need to be addressed to enable central banks to use inflation expectations as a policy tool.
The Price Pass-Through of Local Shocks and the Effectiveness of Fiscal Devaluations (with Juan Herreno) (Draft coming soon)
The effectiveness of local fiscal policies in a monetary union depends on the reaction of prices. We estimate the pass-through of local sale taxes to prices to using data underlying the CPI. We estimate a higher pass-through of sale taxes on tradable goods relative to non-tradable goods. We use a New Keynesian model where regions trade and consume tradable and non-tradable goods to interpret the evidence. In the model, the pass-through of a sale tax depends on the extent of geographical competition for a good. We explore conditions under which fiscal policies are output and welfare-improving.
Robot Adoption, Automation, and Labor Markets in a Global Economy (with Tara Vishwanath and Roman D. Zarate) Preliminary Draft
There is a heated debate about the negative consequences of automation and rapid technological progress on jobs performed by human labor and its implications on the future of manufacturing. While different studies have analyzed the impact of automation in advanced economies, there is scarce evidence for developing ones. The question whether manufacturing is still a sensible and feasible development strategy is critical in creating global equitable and efficient markets. And, studies in low-middle income countries have only examined patterns of job polarization or the direct impact of technology adoption. We explore a new channel on how technology adoption in advanced economies may affect labor outcomes in developing ones: The displacement of traditional economic sectors by the adoption of computer-assisted technologies and robots in advanced countries. We start showing three facts: 1) there is a positive correlation between trade flows and robots; 2) robots adopted by advanced countries are in sectors with traditional comparative disadvantage; 3) preliminary results suggest a negative association between US robot adoption and net exports stemming from developing countries and a negative impact on labor outcomes.
Using panel co-integration techniques and a comprehensive dataset covering the period 1980-2013, this paper finds a positive and significant correlation between national saving and domestic investment rates in Latin America and the Caribbean (LAC). The estimated correlation is approximately 0. 39; i. e. , for every 1 percentage point of GDP increase in national saving, domestic investment increases by 0. 39 percentage points on average. There are however, three nuances to the headline result: i) the estimated correlation has been declining over time; ii) the regional average hides a large degree of intra-regional heterogeneity; and iii) the estimated coefficient is largest amongst the biggest economies in the region. It is concluded that low national saving rates remain a binding constraint for capital accumulation in LAC.
This paper proposes a new taxonomy of Sudden Stops comprised of seven categories with definitions depending on the behavior of gross and net capital flows. The incidence of different types of Sudden Stops is detailed over time and we relate the type of Sudden Stop to economic performance. Sudden Stops in Net Flows associated with reductions in Gross Inflows are associated with larger falls in output than those where Sudden Starts in Gross Outflows dominate. The paper further discusses the mechanisms that might result in Sudden Stops in Gross Flows that are not Sudden Stops in Net Flows such that purchases and sales in financial assets or liabilities do not require a sharp current account adjustment. Still, it is found that Sudden Stops in Gross Inflows that do not provoke a sharp contraction in Net Flows may also be disruptive, particularly Sudden Stops that are driven by “other flows” - which include banking flows. The results suggest new avenues for research and future policy analysis.