Welcome!
I am an Economist at the Research Department of the Inter-American Development Bank (IDB). I work on the fields of International Economics, Macroeconomics, Environmental Economics.
I received my Ph.D. in Economics from the University of Michigan in 2023.
Feel free to reach out to me at leticiaj@umich.edu
You can find my CV here.
Working papers
Buyer Market Power and Exchange Rate Pass-through
[Submitted]
Abstract: This paper investigates the impact of buyer market power on international price responses to exchange rate changes, focusing on exchange rate pass-through. Using a novel dataset of Colombian export transactions that links Colombian exporters (sellers) to their foreign importers (buyers), I document three key findings: (i) Colombian exports are concentrated among a few foreign buyers in each market, (ii) sellers charge different prices to different buyers for the same product and destination, and (iii) markets with higher buyer concentration exhibit lower exchange rate pass-through. Motivated by these observations, I estimate an open economy oligopsony model with endogenous markdowns, revealing that larger foreign buyers secure marked-down prices that adjust flexibly to exchange rate shocks. Sellers connected to larger buyers experience milder price changes (1% impact) compared to those connected with smaller buyers (15% impact). These findings highlight a trade-off: while larger buyers reduce seller revenues, they also reduce sellers’ exposure to exchange rate volatility. Using the model estimates, I propose a counterfactual scenario where buyer market power is eliminated, leading to increased seller revenues but greater price sensitivity to exchange rate shocks. This underscores the strategic importance of buyer relationships in international markets.
The Consequences of Non-Tariff Trade Barriers: Theory and Evidence from Import Licenses in Argentina
Abstract: As WTO regulations rendered tariffs less viable, the trade policy landscape experienced a significant transformation: Non-tariff barriers have proliferated, becoming a central instrument of countries' trade policy. How do Non-Tariff import Barriers affect downstream firms? What role do firm market power and market concentration play in shaping the effects of these barriers? This paper investigates the effects of import licenses (NAILs) in Argentina from 2005 to 2011. We construct a novel database with yearly data on products that require import licenses to analyze the causal effects of NAILs on firms' imports, exports, and employment. Our empirical strategy leverages the staggered introduction of NAILs as a unique opportunity for causal identification. We find that NAILs significantly reduce firm imports, leading firms reliant on these imported inputs to decrease exports and employment. In a trade model with oligopolistic competition in export markets, we provide conditions under which firms' market power can shape the aggregate impact of NAILs. In markets where a firm is relatively large, it can respond to NAILs by adjusting its markups while maintaining relatively stable prices and output. This reduces the overall impact on consumer prices in more concentrated markets.
From Tax Amnesty to Bank Credit: The Transmission of Asset Repatriations through Bank-Firm Relationships
Abstract: In the past two decades, over 30 countries have implemented tax amnesty policies to encourage the declaration and repatriation of hidden assets, with the goal of increasing government tax revenues. While previous literature has primarily focused on the fiscal impact, this paper studies a new channel: the potential expansion of the financial sector resulting from these policies. We examine the macroeconomic effects of Argentina’s 2016 Tax Amnesty, one of the largest programs for disclosing hidden assets, through the financial channel. This amnesty led to an influx of savings into domestic banks, primarily in dollars, equivalent to 1.4% of GDP. We leverage the heterogeneous exposure of banks and firms to this amnesty-induced financial shock to identify bank responses and the spillovers to firms in the private sector. We find that more exposed banks significantly increased their lending compared to less exposed ones. Firms connected to banks with higher exposure experienced increased borrowing and a boost in imports, exports, and employment. Our findings reveal that tax amnesty policies can stimulate economic growth by expanding the financial sector, demonstrating effects beyond their direct fiscal impact. These results are particularly relevant for countries with underdeveloped financial systems, where the potential for growth through improved access to capital is significant.
Abstract: This paper studies how the effects of exchange rate shocks on international prices vary with trade credit. We put together a dataset that contains customs data and bank statements for the universe of Chinese exporters for the period 2001-2012. We start by documenting some stylized facts. First, we observe substantial complementarity between trade credit and bank loans. Second, the interests paid by exporters to domestic banks respond to exchange rate shocks. Third, exporters’ international prices respond significantly less for products sold by exporters issuing more trade credit (more complete exchange rate pass-through). Motivated by these stylized facts, we model an open economy with heterogeneous firms. In the model, exporters in the home country borrow from domestic banks to finance their production activities, which translates into a credit premium in their export prices. This paper introduces a trade credit premium channel: exchange rate shocks affect domestic banks’ expectations of exporters' profits, and, in this way, impact interest rates (financial costs) offered to exporters. The changes in interest rate affect the international prices charged by these exporters. With the estimates from the model, we conduct the following counterfactual: reduce financial frictions between banks and exporters.
Work in Progress
