Research

Working Papers

Donkey business: trade, resource exploitation, and crime (with Lucas Corrêa-Dias) Revision requested at Journal of the European Economic Association 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) Revision requested at The B.E. Journal of Economic Analysis and Policy 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.

Resource boom, export composition, concentration, and sophistication: evidence from Brazilian local economies. Submitted 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.

The Consumption Side of Trade Shocks: Inequality Dynamics and Luxury Imports (with Laura Heras-Recuero) Submitted PDF

We study how a large, exogenous trade shock — triggered by China’s accession to the WTO in 2001 — reshaped income, inequality, and import behavior across Brazilian regions. Using a shift-share instrument based on pre-shock export structures, we show that regions more exposed to China’s demand boom experienced increases in income per capita and within-region inequality relative to less exposed areas. These changes, in turn, led to rising import values and a shift in import composition, particularly toward consumption goods and medium- to high-tech manufactured products. To interpret these patterns, we classify goods by necessity and luxury status using Brazilian household survey data and develop a complementary ``demonstration luxury’’ classification — designed to capture status-oriented goods — based on U.S. consumption patterns. Luxury imports rose most in regions that were initially more unequal or experienced sharper post-shock increases in inequality, consistent with non-homothetic preferences and status-driven consumption. Our findings highlight inequality as a key channel through which trade shocks shape regional import demand in developing economies.

Declining Federal Spending and the Social Safety Net: Evidence from the Budget Control Act of 2011 (with Tim Komarek) Submitted PDF

In 2011 political debate on federal spending and growing federal deficits climaxed with a showdown over raising the debt ceiling. This led to the Budget Control Act of 2011, which resulted in a steep decline in federal discretionary spending. We leverage the institutional details from the Budget Control Act to examine how the contraction in federal procurement contracts with private-sector firms impacted individuals and the social safety net. Our results show procurement reductions in industries with high labor intensity resulted in more pronounced local social safety net expansions. We also examine heterogeneity by demographic groups.

Great Expectations: Electoral Accountability After Economic Shocks (with Iasmin Goes) PDF

This paper examines how exogenous economic shocks shape electoral accountability in local elections. We develop a theoretical framework in which a sudden increase in household income temporarily boosts support for incumbents, even when the shock is unrelated to their actions. As voters gradually update their expectations, however, the incumbent’s advantage fades. We test the model’s predictions using Brazil’s 2003 legalization of genetically engineered soybean seeds, a policy that triggered uneven productivity gains across municipalities due to variation in climate and soil. Leveraging this quasi-natural experiment over the 2000–2020 period, we show that incumbent mayors were more likely to be reelected in municipalities with larger gains in soy productivity — but this advantage was short-lived. Our findings highlight how misattribution and voter learning jointly shape the political consequences of economic change in developing countries, where structural reliance on commodity exports increases vulnerability to external shocks.

Publications and Accepted

Institutional changes, effective demand, and inequality: a structuralist model of secular stagnation (with Daniele Tavani). Forthcoming at Metroeconomica. Published Version WP Version

Trade liberalization and mortality rates: evidence of pro-cyclical mortality from Brazil (with Lucas Corrêa-Dias and Sammy Zahran), Health Economics 34:3 (2025), 392-414. 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

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)