Research
Working Papers
Resource boom, export composition, concentration, and sophistication: evidence from Brazilian local economies. Job Market Paper. Under Review PDF
This paper investigates the impact of resource booms on export value, concentration, composition, and sophistication in resource-rich developing economies. Using a shift-share instrument that leverages heterogeneous exposure to Chinese demand after China’s 2001 WTO accession and the ex-ante composition of export baskets, I examine the causal effects on export baskets and sectoral employment of Brazilian local economies. The findings reveal increased export values and concentration in more exposed regions, with a shift from resource-based manufactures to primary products and declining export sophistication. Despite wage growth in primary and service sectors, primary employment remained stable while manufacturing jobs contracted, resembling a Dutch disease pattern. These results underscore the trade-offs of resource booms, where short-term gains in export value and sectoral wages may be offset by long-term development challenges. Given Brazil’s similarities to other commodity exporters, these findings may indicate similar trends emerging across developing economies.
Donkey business: trade, resource exploitation, and crime (with Lucas Corrêa-Dias) Under Review PDF
This paper examines the relationship between the institutionalization of a renewable resource market with poorly defined property rights and local crime rates. We focus on the regulation of the donkey hide trade in Brazil, driven by foreign demand for ejiao, a Traditional Chinese Medicine product. Using a quasi-experimental research design, we leverage the timing of regulatory measures alongside spatial variations in donkey populations across Brazilian municipalities to provide causal evidence that the slaughtering of free-roaming donkeys led to an increase in crime and violence. We further explore the role of market illegality, finding that the impact on crime was twice as large during periods when the trade was illegal in Brazil. Our results carry important policy implications for developing countries grappling with resource booms and weak property rights. These findings emphasize the need for effective regulation, robust monitoring, and enforcement mechanisms to mitigate the social costs associated with natural resource exploitation.
How Much is Fiscal Consolidation Offset by Increases in Social Safety Net Spending? Evidence from the 2011 Budget Control Act (with Tim Komarek and Kendall Stephenson) Under Review PDF
This paper investigates how much reductions in federal procurement spending from the Budget Control Act of 2011 are offset or “crowded out” by increases in spending on social safety net programs. We use a shift-share instrumental variables approach and find that approximately 7% of the cuts in federal spending are offset by social safety net transfers. Specifically, for every dollar reduced in federal procurement, there is an associated increase of 0.06 in unemployment insurance payments and less than 0.01 in SNAP benefits. Furthermore, our analysis reveals that these effects vary significantly with the type of spending that is cut. These findings underscore the broader implications of fiscal adjustments, highlighting the potential consequences for state policies and employer costs.
Institutional changes, effective demand, and inequality: a structuralist model of secular stagnation (with Daniele Tavani). PKES Working Paper 2410. Revision requested at Metroeconomica PDF
This paper addresses the factors driving economic stagnation and inequality in the US over recent decades. We study a demand-driven model with joint adjustment of the functional distribution and capacity utilization in the short run, and explore the dynamics of wealth accumulation and labor productivity growth in the long run. Our analysis formally explains several stylized facts observed in the US economy: the decline in labor share of income, the increase in the top 1% wealth share, the slowdown in labor productivity growth, and the reduction in the income-capital ratio. Institutional changes that weakened workers’ bargaining power or strengthened firms’ market power have reduced the labor share of income. While these changes may have initially stimulated short-term economic activity and growth within a profit-led demand regime, their long-term effects are concerning. In particular, a lower labor share negatively impacts labor productivity growth and, in turn, slows down the growth rate of the economy in the long run. To achieve balanced growth, the income-capital ratio, proxied by the rate of capacity utilization, must eventually decrease. The long-run behavior of our model is captured by a simple 2D dynamical system analyzing the capitalist wealth share and the labor share. Our findings demonstrate that an institutionally driven decline in the labor share exacerbates wealth inequality over time. These results point to the importance of policies counterbalancing the labor-crushing developments of the past decades to escape the process of stagnation and inequality.
Publications and Accepted
Trade Liberalization and Mortality Rates: Evidence of Pro-Cyclical Mortality from Brazil (with Lucas Corrêa-Dias and Sammy Zahran). Forthcoming at Health Economics Published Version WP Version
Functional distribution of income as a determinant of importing behavior: An empirical analysis (with Gilberto Tadeu Lima), Structural Change and Economic Dynamics 65 (2023), 393–405. Published Version WP Version Online Appendix
Selected Works in Progress
Exogenous economic shocks and incumbents’ electoral fortunes: evidence from Brazilian mayoral elections
Regional export composition and economic growth: the multi-regional Thirlwall’s Law
Tip Credit effects on employment, earnings, and establishments (with Sammy Zahran, David Mushinski, and Sayorn Chin)
Size matters: wealth accumulation and conflict in a Classical model (with Gilberto Tadeu Lima)
Trade liberalization and income inequality: evidence from Brazil (with Sammy Zahran and Daniele Tavani)