Research
Publications
The Micro Anatomy of Macro Consumption Adjustments
(NBER working paper | link to journal)
with
Pablo Ottonello
and
Diego Perez
American Economic Review 2023, Vol. 113, No. 8, 2201-31
We study crises characterized by large adjustments of aggregate consumption through
their microlevel patterns. We document the cross-sectional patterns of consumption
adjustment across the income distribution and find large adjustments for top-income
households, who exhibit consumption-income elasticities similar to or larger than the
average. We construct a heterogeneous-agent open economy model of consumption
under income fluctuations and show that the data patterns are largely consistent with
theories that attribute the dynamics of aggregate consumption to changes in aggregate
permanent income. We also discuss our findings' implications for theories based on the
tightening of households' borrowing constraints and analyze policy implications.
Working Papers
Financial Frictions and the Market for Firms
with Federico Kochen
Revise and Resubmit, Review of Economic Studies
We study and quantify the aggregate implications of the trade of firms in the presence of financial frictions.
Empirically, we document that one in four U.S. entrepreneurs purchased their business, with younger, smaller, and higher average revenue product of capital (ARPK) firms having the highest trading rates.
After trade, capital outpaces output growth, reducing firms’ ARPK over time. To explain these findings, we propose a general equilibrium model of entrepreneurship with a frictional market for firms where the trade of firms alleviates financial constraints.
We show that the predictions from our theory are consistent with the cross-sectional and longitudinal facts. Our quantitative results indicate that firms’ trade significantly improves allocative efficiency, with potential larger gains in less financially developed economies. We provide cross-country evidence supporting this prediction.
The Business Cycle Volatility Puzzle: Emerging vs Developed Economies
with Lucia Casal
Revise and Resubmit, Journal of International Economics
Tapan Mitra Memorial Prize for Outstanding 3rd Year Paper (awarded to Lucia Casal, Cornell University)
Firms' Rollover Risk and Macroeconomic Dynamics
[submitted]
2022 National Prize in Economics (Premio Raul Trajtenberg) Uruguay
This paper analyzes the macroeconomic implications of firms’ rollover risk. I develop a heterogeneous-firms macroeconomics model where rollover crises arise from coordination failures among creditors. Rollover crises are events in which a firm defaults because creditors fail to roll over its debt, but would have repaid otherwise.
I assess the quantitative relevance of rollover crises using a model-based identification strategy informed by the observed distribution of firms’ bankruptcy outcomes. Finally, I use the model to evaluate the aggregate implications of rollover risk for the U.S. economy and examine the effectiveness of imperfectly targeted credit policies for stabilization during recessions.
The Origins of Top Firms
with Federico Kochen
Working From Home and Contact-Intensive Jobs in Uruguay (spanish | slides | post | data + codes)
RISEP paper (Social Sciences Research Network to Confront Sequels of the Pandemic - Uruguay)
supplementary material: risky jobs in Uruguay (spanish)
coverage:
CEPAL,
UNDP,
UNDP blog,
ILO,
En la Mira (TV),
El Observador (newspaper),
El Pais Uruguay (newspaper),
Puntos de Vista (radio)
In this article, I estimate how many workers have jobs that can be performed at home (WFH) and jobs with close physical contact with other people (CI) in Uruguay.
To identify the jobs that are WFH and CI, I adopt the methodology of Dingel & Neiman (2020) and Mongey, Pilossoph & Weinberg (2020) used for the U.S.
My baseline estimates show that around 78% of the workers in the private sector can’t WFH and 22% have CI jobs.
Next, I find large heterogeneity in WFH and CI propensities across the income distribution, geographical locations, age groups, education levels, and production sectors. In addition, I study the access to social insurance, hand-to-mouth propensity, and intra-household insurance for households exposed to the pandemic. Lastly, I show that my baseline estimates of WFH are consistent with ex-post survey estimations during the Covid-19 pandemic lockdown in Uruguay.
Work in Progress