Current Projects

Procurement and Credit Growth: Firm-Level Evidence and Aggregate Implications

with Julian di Giovanni, Manuel García-Santana, Enrique Moral-Benito


Investment and Saving along the Development Path

with Manuel García-Santana, Lucciano Villacorta


Health, Consumption, and Inequality

with Jay Hong, Víctor Ríos-Rull

Working Papers

Investment Demand and Structural Change

R&R Econometrica; with Manuel García-Santana, Lucciano Villacorta

Downloads: working paper (August 2019, first version December 2016);


Abstract: In this paper we study the joint evolution of the investment rate and the sectoral composition of developing economies. Using panel data for several countries in different stages of development we document three novel facts: (a) both the investment rate and the industrial weight in the economy are strongly correlated and follow a hump-shaped profile with development, (b) investment goods contain more domestic value added from industry and less from services than consumption goods do, and (c) the evolution of the sectoral composition of investment and consumption goods differs from the one of GDP. We build and estimate a multi-sector growth model to fit these patterns. Our results highlight a novel mechanism of structural change: the evolution of the investment rate driven by the standard income and substitution effect of transitional dynamics explains half of the hump in industry with development, while the standard income and relative price effects explain the rest. We also find that the evolution of investment demand is quantitatively important to understand the industrialization of several countries since 1950 and the deindustrialization of many Western economies since 1970.

Inequality in Life Expectancies across Europe and the US 

Submitted; with Radim Bohacek, Jesús Bueren, Laura Crespo, Pedro Mira

Downloads: working paper (March 2020) plus online  appendix 

Downloads: old and longer working paper (November 2018)

Media and Blogs: VoxEU column


Abstract: We use harmonized household panel data from Continental Europe, England, and the US to provide comparable measurements of education and gender inequalities in total, healthy, and unhealthy life expectancies. Common across countries, the education advantage in total life expectancy is larger for males but the education advantage in (fewer) unhealthy years is larger for females. These results arise because the education advantage in survival is relatively more important for males, while the education advantage in health transitions is relatively more important for females. Across countries, inequalities are largest in Eastern Europe and lowest in Scandinavia, while the US stands out with the largest education gradient in healthy life expectancy. Finally, we find that countries with higher public spending in health display smaller education inequalities in life expectancy.

Older Working Papers

Durable Goods, Borrowing Constraints and Consumption Insurance

with Enzo Cerletti

Downloads: Working paper (March 2014, first version June 2012) 


Abstract: We study the different transmission of income shocks into consumption goods of different durability. We show that binding borrowing constraints lead to a substitution between goods upon arrival of an unexpected income change. The sign of this substitution depends critically on the persistence of the shock, whereas its size depends on the durability of goods and on their role as collateral for borrowing. An important consequence is that the response of non-durable consumption to income shocks is an imperfect measure of household insurance against labor market risk. We use a life-cycle model with labor market uncertainty and incomplete markets to quantify the actual amount of insurance implied by the observed transmission of income shocks to non-durable consumption. We find that young households have substantially less insurance against transitory shocks and more insurance against permanent shocks than implied by the transmission of the shocks into non-durable consumption expenditure.

The Effects of Labor Market Conditions on Working Time: the US-EU Experience

with Claudio Michelacci

Downloads: working paper (September 2008)


Abstract: We consider a labor market search model where, by working longer hours, individuals acquire greater skills and thereby obtain better jobs. We show that job inequality, which leads to within-skill wage differences, gives incentives to work longer hours. By contrast, a higher probability of losing jobs, a longer duration of unemployment, and in general a less tight labor market discourage working time. We show that the different evolution of labor market conditions in the US and in Continental Europe over the last three decades can quantitatively explain the diverging evolution of the number of hours worked per employee across the two sides of the Atlantic. It can also explain why the fraction of prime age male workers working very long hours has increased substantially in the US, after reverting a trend of secular decline.