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Links to some of my
Macroeconomic Theory I (Econ 504), Fall 2013
World Food Prices, the Terms of
Trade-Real Exchange Rate Nexus, and Monetary Policy
(with Luis Catao). We study a small open economy that imports a
commodity (food) whose world relative price is stochastic, and derive
implications for monetary policy. A novelty of this paper is that we
allow for incomplete risk sharing across countries, adopting
Schulhofer-Wohl's assumption of complete markets with costly transfers
between agents. (This paper revises, extends, and supersedes an earlier
one that circulated with the name "World Food Prices and Monetary
- New! Financial Intermediation, Exchange Rates, and
Unconventional Policy in an Open Economy (with Luis Felipe
Andrés Velasco). A model of the interaction between financial
frictions, exchange rates, and interest rates, applied to the analysis
of unconventional monetary policy. A novel perspective is
obtained, in particular, on sterilized foreign exchange intervention.
- New! Monetary Rules for Commodity Traders
(with Luis Catao). A model of a small economy that trades
commodities whose world prices are subject to random shocks, with an
analysis of the dynamic and welfare implications of
alternative monetary rules.We show how to derive
analytical and intuitive characterizations of optimal Ramsey
allocations and flexible price (natural) outcomes, not only under
complete markets (as in most of the related literature) but under
balanced trade. Forthcoming, IMF
Is Inflation Target Still on Target?
(with Luis Felipe Céspedes and Andrés Velasco).
A review of recent
monetary policy in Latin American inflation targeting countries,
emphasis on the tensions between the theory of IT and actual
Sources of Fluctuations in Emerging Economies (with Andrés
empirical investigation of stochastic trends versus financial frictions
as explanations of emerging markets fluctuations. Forthcoming, International
- New Version! Privatization
and Nationalization Cycles (with Constantino Hevia and Norman
review evidence on the recurrence of nationalization and privatization,
and develop a model of an efficiency-equity tradeoff that is
consistent with several of the stylized facts.
Policy Under Financial Turbulence,
Luis Cespedes, Roberto Chang and Diego Saravia eds., Series on Central
Banking, Analysis, and Economic Policies, Volume 16, 2011.
Central Banking (with Luis Cespedes and Javier Garcia Cicco). Discusses
theory and practice of recent central banking moves. Prepared for the
13th Annual Central Bank of Chile Conference, "Monetary Policy Under
Capital Flows, and Politico Economic Equilibria
A simplified exposition of the interactions between
elections and capital flows. American
Economic Review 2010
Targeting, Reserves Accumulation, and Exchange Rate Management in Latin
America. Prepared for the Latin
American Reserves Fund.
- Openness Can
be Good for Growth: The Role of Policy Complementarities. (with Linda Kaltani and Norman Loayza) Journal of Development Economics,
- An entry on dollarization
for the New Palgrave Dictionary of Economics, 2nd Edition.
version of Financial Crises and Political Crises
(Journal of Monetary Economics, 2007). Appendix.
Uncertainty and the Volatility of International Capital Flows
develops a theoretical model of the interactions between elections,
distributional conflict, and international capital movements. This
revision allows for factor rewards to be derived endogenously, and for
a continuous distribution of wealth.
Seminar on International
Macroeconomics (Econ 606), Spring 2013
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