I'm a PhD Candidate at the Department of Economics at.
Fields: International Economics, Macroeconomics, Environmental Economics, Finance
Secondary Field: Labor Economics
I am on the 2022-2023 Economics job market.
Prior to my graduate studies at University of Michigan, I worked as a research assistant at the University of San Andres and at the Inter-American Development Bank.
This paper studies the role of buyer market power in determining the response of international prices to exchange rate changes (i.e., exchange rate pass-through). Using a novel dataset of the universe of Colombian export transactions that links Colombian exporters (sellers) to their foreign importers (buyers), I document that (i) most Colombian exports are concentrated in a few foreign buyers in each market, (ii) the same seller charges different prices to different buyers in the same product and destination, and (iii) markets with a higher concentration of sales among buyers display lower exchange rate pass-through. Motivated by these stylized facts, I propose an open economy model of oligopsony that accounts for buyer market power in international markets and its consequences for price determination in international transactions. The model shows that larger foreign buyers pay a marked-down price; a price below marginal productivity. Most importantly, these markdowns are flexible and play a role when adjusting prices to exchange rate shocks. I derive a model-based equation relating pass-through to buyer size and estimate it on the micro transaction level data for Colombia. I find that after an exchange rate shock, sellers connected to larger buyers face more moderate changes in their prices in the seller currency (i.e., lower exchange rate pass through) than those connected to small buyers. Pass-through ranges from 1% for firms connected with the largest buyers and up to 17% for firms connected with the smallest buyers. I use the estimates from the empirical analysis to calibrate the model and propose a counterfactual where buyer market power is eliminated. Under this scenario, sellers' revenues increase; however, the price in seller currency is more responsive to exchange rate shocks.
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.
[Winner of CAF Grant 2021-2022 on environmental policies]
[Award Rackham Graduate Student Research Grant]
Environmental regulations designed to reduce firm-level greenhouse gas emissions are an important component of strategies to tackle climate change and protect biodiversity. Little is known about how a transition to greener production processes would affect labor market inequality. This paper seeks to document the effect of firm-level greenhouse emission abatement on labor markets, specifically the skill premium. For this purpose we construct a unique dataset containing matched firm-level data on firms characteristics and CO2 emissions with worker-level data on employment, education and wages from the Internal Revenue Service (IRS) . Our empirical strategy consists of a shift-share instrument that leverages exogenous variation on the foreign prices of green capital goods and inputs across firms and over time to explore the effect on labor markets. Results show that employment, total wages and the skill premium are positively associated to an increase in firm-level imports of green goods. To rationalize these findings, we introduce carbon inputs into a model featuring firm and worker heterogeneity. In the model, complementarity between carbon inputs and labor is heterogenous across workers of different skill types. Firm-specific abatement shocks induce a change in relative skill demand that is further amplified by the equilibrium reallocation of production across firms.
Work in Progress
Over the last few decades employment became increasingly concentrated among a few firms, that act strategically and exert labor market power over their workers. This has macroeconomic implications at the worker level. This paper studies the effect of labor market power on the gender wage gap. A general equilibrium model of oligopsony shows that the relationship between employer concentration in a market and the gender wage gap is theoretically ambiguous. On one side, workers in concentrated markets have fewer outside options to give them bargaining power in wage negotiations. This would suggest a compression of the wage distribution that could improve the gender wage gap. On the other side, when firms have labor market power, wages are a function of labor supply elasticities. To the extent that there is gender heterogeneity in these elasticities, this could worsen the gender wage gap in concentrated markets. Determining if the supply or demand effect dominates is crucial to informing the design of policies that aim to reduce gender pay inequality. This project uses administrative employer-employee data from Chile to study the relative magnitudes of the two channels. Preliminary analysis suggests that wage gaps are smaller in markets with higher concentrations.
University of Michigan
I am passionate about teaching and have taught undergraduate or graduate level courses during most of the semesters I have been at University of Michigan.
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