Current Projects

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

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


Investment and Saving along the Development Path

with Manuel García-Santana, Lucciano Villacorta


Migration, Trade, and Structural Change

with Tomás Budí-Ors


Health, Consumption, and Inequality

with Jay Hong, Víctor Ríos-Rull


Old 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.