Professor, Department of Economics, London School of Economics.
External Member of the Monetary Policy Committee, Bank of England
Member of the Royal Economic Society's Women in Economics Committee
Member of the Editorial Board, Review of Economic Studies
Council Member of the Royal Economic Society
Programme Leader, CfM
Research Associate, CEP
Research Fellow, CEPR
Curriculum Vitae (pdf)
Ph.D., Harvard University, 2002. (Advisors: A. Alesina, R. Barro--chair, K. Rogoff.)
M.A., Harvard University, 1999.
A.B., Universidad Nacional de Tucuman, Argentina, 1997.
If you have questions about "The Log of Gravity", please click here
Published and Forthcoming Academic Papers
Pushing on a String: US
Monetary Policy is Less Powerful in Recessions
Joint with Gregory Thwaites. Forthcoming American Economic Journal: Macroeconomics
Data Set used in "Pushing on a String": Extended Series of Romer and Romer's shocks 1969-2007 by Thwaites and Tenreyro.
Hot and Cold Seasons
in the Housing Market
Joint with Rachel Ngai. The American Economic Review, December 2014, Volume 104, Issue 12. Pages 2991-1026.
Estimating the Extensive
Margin of Trade
Joint with J.M.C. Santos Silva and Kehai Wei. Forthcoming Journal of International Economics 2014.
Trading Partners and Trading Flows: Implementing
the Helpman-Melitz-Rubinstein Model Empirically
Joint with J.M.C. Santos Silva. Forthcoming Oxford Bulletin of Economics and Statistics 2014.
models for non-negative data with many zeros,
Joint with J.M.C. Santos Silva and Frank Windmeijer. Forthcoming Journal of Econometric Methods, 2014
Patterns and Monetary Policy: International Evidence
Joint with Giovanni Olivei. Journal of Monetary Economics, October 2010, Volume 57, Issue 7. Pages 785-802
*Data discussion: microeconomic evidence of wage rigidity in the United States, Europe, and Japan.
Currency Unions in
Prospect and Retrospect
Joint with J.M.C. Santos Silva. Annual Review of Economics, September 2010, Volume 2, Pages 51-74.
Supplemental Appendix to "Currency Unions in Prospect and Retrospect"
On the Existence of the
Estimates for Poisson Regression
Joint with J.M.C. Santos Silva. Economics Letters, May 2010, Volume 107, Issue 2. Pages 310-312.
The Timing of Monetary
Joint with Giovanni Olivei. The American Economic Review, June 2007, Vol
Joint with Miklos Koren. The Quarterly Journal of Economics, February 2007, Volume 122, No. 1: 243-287.
On the Trade Impact of Nominal Exchange Rate Volatility
Journal of Development Economics, March 2007, Volume 82, No. 2: 485-508
The Log of
Joint with J.M.C. Santos Silva. The Review of Economics and Statistics, November 2006, Volume 88, No. 4: 641-658.
circulated as Gravity-Defying Trade; FRB Boston Series, paper no.
For other questions, data, and codes, please, check the paper's page here
Closed and Open Economy
Models of Marked Up and Sticky Prices
Joint with Robert Barro. The Economic Journal, April 2006, Vol. 116, No. 511: 434-456.
Economic Effects of
Joint with Robert Barro. Economic Inquiry, January 2007, Vol. 45, No. 1: 1-197.
Is Poland the Next
Joint with Francesco Caselli. NBER International Seminar on Macroeconomics; R. Clarida, J. Frankel, and F. Giavazzi, editors, 2004.
Optimal Currency Areas
Joint with Alberto Alesina and Robert Barro. NBER Macroeconomics Annual, Mark Gertler and Kenneth Rogoff, eds. Cambridge, MA: MIT Press, 2002.
Chapter 31: Currency Unions, in Gerard Caprio Jr. (ed.), The
Evidence and Impact of Financial Globalization, Academic Press: San Diego,
Pages 451-461, 2013.
Joint with J.M.C. Santos Silva.
Diversification and Development in the Gulf Cooperation Council Countries
Joint with Miklos Koren. The Transformation of the Gulf: Politics, Economics and the Global Order, David Held and Kristian Ulrichsen, eds. 2011.
Some Convergence Issues
Joint with J.M.C. Santos Silva. The Stata Journal, 2011, Vol. 11 No. 2: 207-212.
Trade, revise and resubmit, Quarterly
Journal of Economics
Joint with Francesco Caselli, Miklos Koren, and Milan Lisicky
Abstract: Existing wisdom links increased openness to trade to greater macroeconomic volatility, as trade induces a country to specialize, increasing its exposure to sector-specific shocks. Evidence suggests, however, that country-wide shocks are at least as important as sectoral shocks in shaping volatility patterns. We argue that if country-wide shocks are dominant, the impact of trade on volatility can be negative, because trade becomes a source of diversification. For example, trade allows domestic goods producers to respond to shocks to the domestic supply chain by shifting sourcing abroad. Similarly, when a country has multiple trading partners, a domestic recession or a recession in any one of the trading partners translates into a smaller demand shock for its producers than when trade is more limited. Using a calibrated version of the Eaton-Kortum and Alvarez-Lucas model, we quantitatively assess the impact of lower trade barriers on volatility since the 1970s in a broad group of countries.
Commodity Booms and
Busts in Emerging Economies
Joint with Thomas Drechsel
Abstract: Emerging economies, particularly those dependent on commodity exports, are prone to highly disruptive economic cycles. This paper proposes a small open economy model for a net commodity exporter to study the triggers of these cycles. The economy consists of two sectors, one of which produces commodities with prices subject to exogenous international fluctuations. These fluctuations affect both the competitiveness of the economy and its borrowing terms, as higher commodity prices are associated with lower spreads between the country's borrowing rate and world interest rates. Both effects jointly result in strongly positive effects of commodity price increases on GDP, consumption and investment, and a negative effect on the total trade balance. Furthermore, they generate excess volatility of consumption over output and a large volatility of investment. The model structure nests various candidate sources of shocks proposed in previous work on emerging economy business cycles. Estimating the model on Argentine data, we find that the contribution of commodity price shocks to fluctuations in post-1950 output growth is in the order of 38%. In addition, commodity prices account for around 42% and 61% of the variation in consumption and investment growth, respectively. We find transitory productivity shocks to be an important driver of output fluctuations, exceeding the contribution of shocks to the trend, which is smaller, although not negligible.
History Dependence in
the Housing Market
Joint with Philippe Bracke
Abstract: Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing markets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring.
Intermediation, and the Gains from Trade in Agricultural Markets
Joint with Swati Dhingra
Abstract: When the world price of a crop increases, how do the incomes of the crop’s farmers in a developing country change? This paper investigates the distributional gains stemming from changes in agricultural world prices. Agricultural markets in developing countries are often characterized by the presence of a large number of small farmers who sell their produce to one or few big companies with significant monopsony or oligopsony power. We develop a flexible theoretical framework that captures this market structure and allows us to examine the impact of international trade on the incomes of farmers, agribusiness and traders in developing countries. The model highlights the conditions under which small farmers benefit (or lose) from increases in the world price of their crops. Using household-level panel data from Kenya, we empirically study the magnitude of the trickle-down effect of world price changes on the incomes of farmers. Farmers benefit from quality spillovers when selling through agribusinesses, but when global crop prices increase, on average, their income increases 30 percent less if they sell through agribusinesses rather than small traders. The model helps inform the debate over land and market reforms recently implemented or planned by several developing countries.
Joint with Tiloka De-Silva
Abstract: The rapid population growth in developing countries in the middle of the 20th century led to fears of a population explosion and motivated the inception of what effectively became a global population-control program. The initiative, propelled in its beginnings by intellectual elites in the United States, Sweden, and some developing countries, mobilized resources to enact policies aimed at reducing fertility by widening contraception provision and changing family-size norms. In the following five decades, fertility rates fell dramatically, with a majority of countries converging to a fertility rate just above two children per woman, despite large cross-country differences in economic variables such as GDP per capita, education levels, urbanization, and female labour force participation. The fast decline in fertility rates in developing economies stands in sharp contrast with the gradual decline experienced earlier by more mature economies. In this paper, we argue that population-control policies are likely to have played a central role in the global decline in fertility rates in recent decades and can explain some patterns of that fertility decline that are not well accounted for by other socioeconomic factors.
Joint with Tiloka De-Silva
Over the past four decades, fertility rates
have fallen dramatically in most middle- and low-income countries around the
world. To analyse these developments, we study a quantitative model of
endogenous human capital and fertility choice, augmented to allow for social
norms over the
number of children. The model enables us to gauge the role of human capital
accumulation on the decline in fertility and to simulate the implementation of
population-control policies aimed at affecting social norms and fostering the
use of contraceptive technologies. Using data on several socio-economic
variables as well as information on funding of population-control policies to
parameterise the model, we find that policies aimed at altering family-size
norms have provided a significant impulse to accelerate and strengthen the
decline in fertility that would have otherwise gradually taken place as
economies move to higher levels of human capital.
The Transmission of
Monetary Policy Operations through Redistributions and Durable Purchases
Joint with Vincent Sterk
Abstract: The central explanation for how monetary policy transmits to the real economy relies critically on nominal rigidities, which form the basis of the New Keynesian (NK) framework. This paper studies a different transmission mechanism that operates even in the absence of nominal rigidities. We show that in an OLG setting, standard open market operations (OMO) carried by central banks have important revaluation effects that alter the level and distribution of wealth and the incentives to work and save for retirement. Specifically, expansionary OMO lead households to front-load their purchases of durable goods and work and save more, thus generating a temporary boom in durables, followed by a bust. The mechanism can account for the empirical responses of key macroeconomic variables to monetary policy interventions. Moreover, the model implies that different monetary interventions (e.g., OMO versus helicopter drops) can have different qualitative effects on activity. The mechanism can thus complement the NK paradigm. We study an extension of the model incorporating labor market frictions.
The Argentine Debt Crisis in Retrospect
Some loud thoughts on Argentina, the IMF, Greece...
Reply to "The Log of
Joint with J.M.C. Santos-Silva, January 2009
For other questions, data, and codes, please, check the Log-of-Gravity page here
Selected Comments and Discussions
The Micro Origins of International Business Cycle Co-movement, by J. Di Giovanni and A. Levchenko. NBER SI 2016.
Does Finance Benefit Society? by Luigi Zingales. Banque de France, Paris 2015
Insider Outsider Labour Markets, Hysteresis and Monetary Policy, by Jordi Gali. Oxford 2015.
Specialization Patterns in International Trade, by Walter Steingress. London 2015.
Small and Large Price Changes and the Propagation of Shocks, by Fernando Alvarez, Francesco Lippi, and Herbe Le Bihan. Fondation Banque de France, Paris 2014.
Segmented Housing Markets, by Monika Piazzesi, Martin Schneider, and Johannes Stroebel. LBS, London 2013.
Macroeconomic Performance during Commodity Prices Booms, by Luis Cespedes and Andres Velasco, IMF Res conference, Istanbul 2012.
Economic Integration and Structural Change, by Jean Imbs and Romain Wacziarg, CEPR, Paris 2012.
Non-uniform Wage Staggering: European Evidence and Monetary Policy Implications, by Julliard, Le Bihan, and Millard, 2011.
Low Interest Rates and Housing Booms: the Role of Capital Inflows, Monetary Policy and Financial Innovation, by Filipa Sa, Pascal Towbin and Tomasz Wieladek. LBS, London 2011.
International Differences in Fiscal Policy, by Agustin Benetrix and Philip Lane. NBER TAPES conference, 2010.
From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons, by Miguel Alumnia, Agustin Benetrix, Barry Eichengreen, Patrick O'Rourke and Gisella Rua, 2010. Forthcoming in Economic Policy.
Subprime-Related Losses and Board In-Competence: Private vs. Public Banks in Germany, by Harald Hau and Marcel Thum, 2009. Forthcoming in Economic Policy.
Productivity and the Dollar, by Giancarlo Corsetti, Luca Dedola, and Sylvain Leduc. ESSIM, Izmir 2007.
Do Exports Generate Higher
Productivity? Evidence from Slovenia, by Jan DeLoecker. CEPR, Alghero 2004.
Globalization and Inflation,
by Natalie Chen, Jean Imbs, and Andrew Scott. CEPR, Rome 2003.
Exchange Rate Volatility and the Composition of Trade,
by Christian Broda and
John Romalis. Federal Reserve Bank, 2003.
Effect of Common Currencies on International Trade: A Meta-Analysis, by Andy
Rose. Harvard, Cambridge MA 2002.
Excellence in Refereeing Award, American Economic Review 2013
American Economic Journal, American Economic Review, Canadian Journal of Economics,
Economic Journal, Economics of Transition, Empirical
Economics, European Economic Review, European Journal of Political Economy,
Fiscal Studies, International Economic Review, IMF Staff Papers,
of Applied Economics, Journal of Development Economics, Journal of Economic Dynamics and
Control, Journal of the European Economic
Association, Journal of International Economics, Journal of International
Journal of International Trade and Development, Journal of Monetary Economics,
Journal of Political Economy,
National Science Foundation, Oxford Bulletin of Economics and Statistics, Quarterly Journal of
Economics, Review of Economics and Statistics,
Review of Economic Studies,
Review of International Economics.
EC442 (Macroeconomics for Ph.D. students). Lectures: Tuesdays 2.30-5.30. LT.
EC475 (Quantitative Economics). Lectures: Mondays 16:00-18:00. Classes: Mondays 10:30-11:30. MT.
EC532 (International Economics). Tuesdays 9:30-12:30. MT.