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Contact Information

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

ruiz-garcia@cemfi.edu.es

+34 618 648 023

Welcome to my Website!

I am a PhD candidate in Economics at CEMFI. My research interests are in the fields of Macroeconomics and Firm Dynamics. You can know more about me in my CV

I am currently on the job market and will be available for interviews at the 2019 EEA Job Market Meeting in Rotterdam and the 2020 ASSA Job Market Meeting in San Diego


Job Market Paper

Financial Frictions, Firm Dynamics and the Aggregate Economy:
Insights from Richer Productivity Processes

How do financial frictions affect firm dynamics, allocation of resources across firms, and aggregate productivity and output? Is the nature of productivity shocks that firms face important for the effects of financial frictions? In order to answer these questions, I first use a comprehensive dataset of Spanish firms from 1999 to 2014 to estimate nonparametrically the firm productivity dynamics. I find that the productivity process is non-linear, as persistence and shock variability depend on past productivity, and productivity shocks are non-Gaussian. These dynamics differ from the ones implied by the standard AR(1) process, commonly used in the firm dynamics literature. I then build a model of firm dynamics with financial frictions in which productivity shocks are non-linear and non-Gaussian. The model is consistent with a host of evidence on firm dynamics, financial frictions, and firms' financial behavior. In the model economy, financial frictions affect the firm life cycle. Without financial frictions, the size of an entrant firm will be three times larger. Furthermore, profit accumulation, which allows firms to overcome financial frictions, is slow, and it only speeds up when firms are mature. As a consequence, the average exiting firm is smaller than it would be without financial frictions. The aggregate consequences of financial frictions are large. They result in misallocation of capital and reduce aggregate productivity by 16%. This figure is only 8% if productivity dynamics evolve according to a standard AR(1) process.


Placement Directors


References

Advisor

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

nezih.guner@cemfi.es

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

fawaz@cemfi.es

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

nezih.guner@cemfi.es

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

pijoan@cemfi.es

University of Toronto
150 St. George Street
M5S 3G7 Toronto, Ontario - Canada

diego.restuccia@utoronto.ca


Contact Information

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

ruiz-garcia@cemfi.edu.es

+34 618 648 023


References

Advisor

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

nezih.guner@cemfi.es

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

pijoan@cemfi.es

University of Toronto
150 St. George Street
M5S 3G7 Toronto, Ontario - Canada

diego.restuccia@utoronto.ca


Placement Directors

Nezih Guner

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

nezih.guner@cemfi.es

Yarine Fawaz

CEMFI
Casado del Alisal 5
28014 Madrid - Spain

fawaz@cemfi.es