Seminario CEDE

Lunes 2 de febrero | 12:30 p.m. | ML-513
Presenta: Giselle Labrador-Badia - University of Winsconsin-Madison.

Deposit Segmentation and Bank Competition: Implications for Monetary Policy
This paper quantifies how segmentation and bank market power in deposit markets shape the transmis sion of monetary policy. Using rate data differentiated by deposit account size, I document that uninsured rates are higher than insured rates, significant heterogeneity in banks’ uninsured deposit exposure, and in complete pass-through from policy rates to deposit rates. I develop and estimate a structural model of bank competition with segmented deposit markets by insurance status and spatial competition to understand these patterns and quantify their implications for monetary transmission. I find that uninsured deposits are slightly more elastic than insured deposits, while insured deposits have higher servicing costs. In counterfactual simulations of federal funds rate increases, I find that insured deposit outflows are three times larger than unin sured outflows and pass-through is higher for uninsured rates. Banks substitute toward wholesale funding, contracting lending as monetary policy tightens. Small banks experience larger balance sheet contractions following rate increases, while competitive markets exhibit stronger deposit pass-through. These findings demonstrate that accounting for deposit segmentation is essential for understanding monetary transmission: segmentation amplifies policy effects in competitive markets but dampens transmission in concentrated mar kets.

Viernes 30 de enero | 12:30 p.m. | ML-513
Presenta: Katarina Kuske - Bocconi University.

Co-Parenting and Careers after Divorce
Joint physical custody (co-parenting) is an increasingly popular post-divorce parenting arrangement, and while it benefits children, its economic implications for parents are theoretically ambiguous. I investigate empirically how co-parenting affects parents’ labour market outcomes after divorce, exploiting a custody reform in the Netherlands that encouraged co-parenting and increased its uptake by 7.6 percentage points among parents with young children. I find that mothers who divorce after the reform experience a 0.8% wage decline in an intention-to-treat framework relative to those divorcing before the reform, which implies an average wage loss of about 10% for compliers. This is driven by slower wage growth for mothers in the treatment group, who are less likely to move further away to access better-paid employment. The findings suggest that co-parenting ties both parents to a fixed location, reducing geographical mobility. Treated mothers also reduce their hours temporarily – largely due to rising overtime in the control group – while fathers’ wages and hours remain unaffected. The wage penalty is concentrated among mothers who were secondary earners during marriage and younger at the time of divorce. These patterns are consistent with couples placing greater weight on the primary earner’s career when making location decisions, which makes the post-divorce location constraint under co-parenting bind more tightly for mothers than fathers, thereby widening the gender wage gap. My results indicate an efficiency cost of location constraints under coparenting.

Jueves 29 de enero | 12:30 p.m. | W-101
Presenta: Isabel Di Tella - MIT - Massachusetts Institute of Technology.
Coautor: Emilio Colombi

Do Institutions Remove Inflation’s Grease? Evidence from Brazil’s Indexed Minimum Wage
How do labor market institutions shape the propagation of inflation shocks? We address this question by studying Brazil’s annually indexed minimum wage in a highinflation context. Conventional wisdom suggests that inflation can “grease” labor market adjustments, but institutional wage-setting may alter this mechanism. Using administrative data, we show that indexation creates upward nominal wage rigidity: workers exposed to the policy experience fewer month-to-month wage increases before indexation events, and firms anticipate the policy by rigidifying wages of workers who will be newly bound. We evaluate the macroeconomic implications by introducing a cost-push shock to a New Keynesian model with heterogeneous labor and an indexed minimum wage. While staggered indexation amplifies the inflation as grease mechanism by introducing nominal rigidities, anticipation dampens it via intertemporal substitution. Overall, amplification matters more since cost-push shocks have a weaker effect compared to a setting where the minimum wage indexes every period. Our findings demonstrate that even in high-inflation environments, the institutional structure of wage-setting fundamentally shapes how shocks propagate through the economy.

Viernes 23 de enero | 12:30 p.m. | ML-513
Presenta: Alfredo Mendoza-Fernández - University of California, Berkeley.
Coautor: Serra Pelin

Do Central Banks Follow the Fed?
We study how central banks respond to U.S. monetary shocks. Using a newly constructed dataset covering over 9,500 monetary policy meetings across 59 economies (the MPM-dataset), we show that emerging market economy (EME) central banks systematically move in unison with the Fed, whereas advanced economy central banks do not. We present evidence that this heterogeneity arises because, in EMEs, U.S. monetary shocks are perceived as cost-push shocks, transmitted through exchange rate fluctuations that affect firms’ costs, owing to the greater prevalence of dollar debt and dollar-invoiced imports. A three-bloc open-economy New Keynesian model with dominant currency pricing and partial debt dollarization reproduces these empirical patterns, highlighting that EME responses stem from the immediate impact of Fed shocks on exchange rates and, in turn, on firms’ marginal costs.

Jueves 22 de enero | 12:30 p.m. | W-101
Presenta: Lautaro Chittaro - Stanford University.
Coautor: Cristián Sánchez

Selection in Crisis Lending: Evidence from Chile’s Government-Guaranteed Loans
We study the long-run effectiveness of government-guaranteed loan programs implemented during recent crises. Using administrative and loan application data from the Central Bank of Chile, we track firm defaults five years after the COVID-19 shock. Our instrumental-variable estimates show that these loans postponed defaults for two years but did not reduce total defaults in the long run. Banks used private information to direct credit toward firms that would have been safer even without the program. To assess the welfare implications of the delayed defaults and banks’ selection of safer firms, we build a dynamic model of heterogeneous entrepreneurs disciplined by our causal estimates. The program generated welfare gains 21% above its fiscal cost, with limited rents for banks and modest increases in aggregate risk-taking. Younger firms are the most cost-effective group to support, yet they are the least likely to be approved because their growth relies on leverage, increasing default risk. A budget-neutral redesign that raises guarantees for younger firms and reduces them for the rest could increase welfare by 6pp.

Martes 20 de enero | 12:30 p.m. | SD-702
Presenta: Javier Gonzalez - Southern Methodist University.

Does Watching Women Work, Work? The Effect of Television on Female Labor Outcomes
I study the effect of female empowerment in media on female labor market outcomes using Latin American telenovelas. Using generative AI, I construct a Female Empowerment Index (FEI) for these TV shows from 1960 to 2024. I show that FEI exposure during the impressionable years increases the likelihood of labor force participation among Latin American women. To identify the causal effect of FEI exposure, I implement an instrumental variables strategy using detailed data on television signal coverage in Mexico. The causal estimates confirm the positive effect of FEI exposure, with an effect size comparable to previous studies. Furthermore, FEI changes account for a significant fraction of the aggregate increase in female labor force participation observed over this period. Moreover, both the emotional framing of narratives and the types of jobs depicted play an important role in shaping the effects.

Viernes 16 de enero | 12:30 p.m. | SD-702
Presenta: Matteo Ruzzante - Northwestern University.
Coautor: Felipe Berrutti

Price Regulation and the Adoption–Innovation Trade-off
Regulating the price of existing technologies can spur their adoption yet deter subsequent innovation. In India, price controls on genetically engineered (GE) cotton seeds induced this trade-off. Leveraging the policy’s differential timing across states, we show that mandated price reductions accelerated adoption of GE seeds by farmers. Although seed supply kept pace, innovation subsequently stalled: fewer new varieties were introduced. Using newly assembled data from experimental field trials across India, we show that agronomic yields of new varieties fell in price-controlled states. To quantify the welfare implications of price and yield effects, we develop and estimate a structural model of demand and supply for seeds with endogenous product attributes. While the policy raised farmers’ surplus, especially among the poor, ignoring innovation responses in equilibrium vastly overstates their welfare gains. We use the estimated model to assess alternative policies that better balance adoption and innovation incentives. For a given public budget, incentives for seed developers tied to the productivity of new varieties achieve the highest welfare for farmers.

Miércoles 14 de enero | 12:30 p.m. | SD-702
Presenta: Natalia Pia Guerrero Trinidad - University of Minnesota.

Norms That Travel: The Role of Grassroots Institutions on Antisocial Behavior
In weak-state environments, behavior depends less on formal rules and more on internalized norms, yet how such norms emerge–and whether informal institutions can cultivate them remains unclear. I provide causal evidence that accountable grassroots institutions can form, internalize, and sustain moral norms that shape long-run behavior. My empirical strategy exploits the staggered emergence of Peru’s Peasant Rounds (1976–1983)–community-run security organizations with participatory and accountable design that promoted moral norms– and combines archival, ethnographic, administrative, survey, and original fieldwork data into a new dataset. Using a matched difference-in-differences design across cohorts and birth districts, paired with displacement induced by exogenous weather shocks, I show that exposure to the rounds before age 11 shifts rule-following from fear to empathy, fosters more impartial moral judgments, increases respect for others’ rights, and raises trust beyond the in-group. These changes in moral norms translate into meaningful behavioral outcomes: adult arrests and incarceration fall by roughly 14 percent relative to the control-group mean, and insurgent recruitment declines by about 32 percent. I also find substantial evidence that these norm changes persist when individuals relocate, diffuse into previously unexposed host communities, and extend to the next generation. A placebo comparison with self-defense groups lacking accountability shows no comparable effects. Taken together, the results are consistent with a mechanism in which accountable community institutions socialize children and raise the moral cost of wrongdoing, cultivating intrinsic prosocial motivation that travels with individuals over space and time.

Martes 13 de enero | 12:30 p.m. | SD-702
Presenta: Antonia Vazquez - University of Texas at Austin.

Can We Save Failing Schools? Evidence From Los Angeles
Can investing in failing schools help them improve? This paper studies this question using a natural experiment based on a 2017 lawsuit settlement that allocated substantial resources to the lowest-performing schools in the Los Angeles Unified School District (LAUSD). Using a difference-in-differences design, I compare 50 secondary schools that received an increase of 13.5% on average in their annual budgets for three years, to nearby public, noncharter schools that received no settlement funding. The intervention mandated hiring of additional staff members and allocating of funds for professional development, but allowed discretionary spending on initiatives for high-need students. I find that, in line with the intent of the settlement, schools hired more personnel, including instructional staff such as teachers and counselors and support personnel such as paraprofessionals and school service staff, all effects statistically significant. Settlement schools achieved a 0.75 percentage points reduction in suspension rate relative to unfunded schools, reflecting a marked improvement in performance outcomes. These reductions were particularly notable given that the settlement triggered demographic sorting, with the treated schools losing students overall and shifting toward higher concentrations of economically disadvantaged students and lower Black enrollment. A simple bounding exercise that accounts for demographic sorting indicates that the settlement had meaningful effects on suspension rates, suggesting real improvements on noncognitive dimensions of schooling. Survey evidence suggests that two key mechanisms for lower suspensions were improvements to school climate as reported by staff and students, and enhancements to educators’ capacity and disciplinary approaches.

Jueves 27 de noviembre | 12:30 p.m.
Presenta: Román Andrés Zárate - University of Toronto.
Coautores: Josefa Aguirre y Fernanda Ramírez-Espinoza

Violencia en la Escuela
Este artículo estima el impacto de la violencia perpetrada por pares y por el personal escolar sobre los estudiantes víctimas. A partir de datos administrativos de Chile que vinculan reportes de violencia escolar con registros educativos individuales, abordamos limitaciones metodológicas que han dificultado la identificación de los efectos causales de la violencia escolar en el corto, mediano y largo plazo. Usando un diseño de diferencias en diferencias con emparejamiento, encontramos que la exposición a la violencia escolar tiene efectos negativos persistentes: el ausentismo aumenta entre un 46 % y un 64 %, las tasas de repitencia se duplican, y tanto las calificaciones como los puntajes en pruebas estandarizadas disminuyen significativamente, con impactos que se extienden hasta por cuatro años. A largo plazo, las víctimas presentan una probabilidad sustancialmente menor de graduarse de la educación secundaria o matricularse en la universidad. Los efectos son más severos cuando la violencia es perpetrada por adultos que cuando proviene de pares. Evidencia complementaria de encuestas muestra que los incidentes reportados se asocian con mayores percepciones de violencia y discriminación, así como con una menor sensación de pertenencia escolar y menores expectativas por parte de los docentes. Aunque estos efectos psicológicos y de percepción desaparecen un año después de los incidentes, las consecuencias educativas adversas persisten, evidenciando cómo experiencias de violencia, incluso breves, pueden generar desventajas educativas duraderas.

Jueves 13 de noviembre | 12:30 p.m.
Presenta: Rachid Laajaj - Universidad de los Andes.
Coautora: Maria Camila Ortiz Alvarez

Measuring the Climate Adaptation Gap
This paper presents a new approach to decompose the effects of climate change on agriculture into the direct effect of a change in climate conditions and the effect of imperfect climate adaptation. We first provide a theoretical framework showing that to capture both effects, a regression should model agricultural outcomes as a function of both the change in expected weather conditions and its absolute value. The former captures the direct effect, which may be positive or negative, while the absolute value accounts for the fact that any deviation in expected weather, regardless of its direction, creates a need for adaptation, causing inefficiency until the farmer fully adjusts her farming decisions. We further derive econometrically how, in the presence of both a direct and adaptation effect, the omission of the absolute value of the change in expected weather, a common limitation in previous studies, compromises the interpretation of the results. Our analysis predicts that the coefficient(s) in front of the absolute value in weather change should be negative in the presence of a Climate Adaptation Gap (CAG). We take this prediction to US and Colombian data, using the long-differences methodology and variations in expected temperature and precipitation over long periods. The results confirm the existence of a significant CAG in both countries, though substantially larger in Colombia.

Jueves 6 de noviembre | 12:30 p.m.
Presenta: Vitor Possebom - São Paulo School of Economis.
Coautor: Rafael Araujo

Potato Potahto in the FAO-GAEZ Productivity Measures? Nonclassical Measurement Error with Multiple Proxies
The FAO-GAEZ productivity data are widely used in Economics. However, the empirical literature rarely discusses measurement error. We use two proxies to derive novel analytical bounds around the effect of agricultural productivity in a setting with nonclassical measurement error. These bounds rely on assumptions that are weaker than the ones imposed in empirical studies and exhaust the information contained in the first two moments of the data. We reevaluate three influential studies, documenting that measurement error matters and that the impact of agricultural productivity may be smaller than previously reported. Our methodology has broad applications in empirical research involving mismeasured variables.
>>Paper

Jueves 30 de octubre | 12:30 p.m.
Presenta: Alvaro Riascos - Universidad de los Andes y Quantil.
Coautores: Juan David Martín (Quantil) y Daniel Mejía (UniAndes)

Revisiting the Police–Crime Relationship: A structural estimation of a discrete-choice model of offender location
In this paper, we estimate the causal impact of police presence on crime using a structural discrete-choice model of criminal location choice. Our approach combines credible quasi-experimental variation in police patrols—induced by emergency calls unrelated to crime—with a behavioral model of offender decision-making, allowing us to estimate deterrence effects and simulate policy counterfactuals. In our structural model, offenders choose locations based on potential rewards and the risk of apprehension, proxied by police presence. Using an instrumental variable for police deployment based on non-crime emergency calls, we find that increased police presence significantly deters crime. Our main results indicate that a 10% increase in patrol presence leads to roughly a 7–8% reduction in crime, an elasticity toward the upper end of prior estimates. The structural model reveals spatial heterogeneity in deterrence. According to our counterfactual simulations, reducing police response to non-crime emergency calls by 50% would lower total crime by about 7.1%—a reduction equivalent to increasing total police patrol time (comparable to the active force) by 11.2%. These findings extend reduced-form evidence by quantifying offenders’ responsiveness to police presence and by illustrating how alternative deployment strategies can enhance deterrence, with direct policy relevance for resource-constrained cities.

Jueves 23 de octubre | 12:30 p.m.
Presenta: Giorgio Chiovelli - Universidad de Montevideo.
Coautores: Francesco Amodio (McGill University) and Serafin Frache (Universidad de Montevideo)

Beefing Up the Service Sector: Commodity Export Booms and Production Network Spillovers
We show that commodity export booms can propagate up the value chain, reshape production networks, and promote growth in the service sector. We study Uruguay’s beef ex- port boom to China in the 2010s, combining customs, firm-to-firm transactions, employer- employee, and balance sheet data. Firms more linked to exporters experienced higher sales, especially in services, with associated gains in employment, wages, and sales per worker. Aggregate sales rose by 1.79%, with each export dollar generating 46 more cents in domestic sales, 10 cents in services. Over time, service firms reoriented their connections toward beef exporters, amplifying their gains from trade.

Jueves 16 de octubre | 12:30 p.m.
Presenta: Elisa Belfiori - Professor, School of Business, Universidad Torcuato Di Tella.
Coautor: Manuel Macera, Economics Department, Universidad Torcuato Di Tella

Optimal Climate Policy with Demographic Transitions
This paper develops a framework to integrate demographic change into climate policy analysis. We build an overlapping-generations climate-economy model with a rich demographic structure, allowing population growth and survival probabilities to vary over time. These features endogenously determine the age composition of society and shape aggregate preferences over time. A central result of our framework is an aggregation result: despite the heterogeneity across cohorts, the planner’s problem can be recast as a representative-agent model with a time-varying social discount factor that reflects demographic dynamics. Notably, as the population ages, the discount factor declines, causing society to behave as if it were more impatient. We use this framework to study how current global demographic trends affect the social cost of carbon—the model-based measure of the economic cost of climate change. We find that this cost is significantly higher under medium- and high-fertility scenarios, driven by greater emissions from larger populations. These effects are partially offset by higher discounting in aging societies. Relative to a benchmark model with no demographic change, the initial social cost of carbon rises by 20% under medium fertility and by 57% under high fertility. Global temperatures also increase more sharply in these scenarios, suggesting that demographic trends will exacerbate the climate problem.

Jueves 9 de octubre | 12:30 p.m.
Presenta: Maria Pia Paganelli - Trinity University.

From dull to cheerful: the relevance of Adam Smith for today
Is there a secret recipe for economic growth? No, but we can extrapolate some pieces of advice from Adam Smith. An economy can leave behind its “dull” stagnant state and grow when its markets expand, when the productivity of its workers increases thanks to high compensations which are seen as incentives to work harder, and when lobbying and cronyism are kept at bay. Luck plays a role too, but these three ingredients are necessary, even if not sufficient, for an economy to grow and thus be “cheerful.”

Jueves 25 de septiembre | 12:30 p.m.
Presenta: Luis Felipe Sáenz - University of South Carolina
Coautor: Robert E. Lucas, Jr.

The Global Industrial Revolution
Standards of living were roughly constant before 1800, almost everywhere. In the early 19th century, English-speaking countries began a process of sustained economic growth that continues today. We document that this rise in living standards—first observed in Great Britain and the United States—is now a global phenomenon. Across countries, we observe four robust patterns along the development path: (i) a reallocation of labor out of agriculture, (ii) a demographic transition, (iii) rising human capital, and (iv) a U-shaped trajectory of female labor force participation. We develop a Unified Growth Theory in which these changes arise endogenously from household decisions. Parents choose how to allocate their time between working and raising children, and how to divide labor between a traditional land-based technology and a modern, human-capital-intensive one. A gradual rise in traditional productivity relaxes resource constraints, enabling investments in child quality. These investments, in turn, make the modern sector profitable, triggering a self-sustaining transition to growth. Calibrated to historical data, the model reproduces the main features of the global development path—including, critically, the U-shaped evolution of female labor force participation.

Jueves 18 de septiembre | 12:30 p.m.
Presenta: Hernando Zuleta - Universidad de los Andes

Labor-Saving Innovations? Optimal Capital-Biased Taxation
This paper investigates optimal taxation in a growth model with capital-biased technological change. We study how the optimal allocation of resources between capital accumulation and innovation depends on who controls this decision. Three scenarios are considered: a centralized economy where a planner chooses the allocation to maximize output, and two decentralized economies that differ in their allocation mechanisms. In the first decentralized scenario, households allocate their savings between capital accumulation and innovation to maximize capital income. We show that: (i) If the production function is linear in capital stock, the decentralized solution is optimal. (ii) If the production function is concave in the capital stock, the decentralized solution is sub-optimal, allowing optimal taxation. In the second decentralized scenario, firms, rather than households, decide how to allocate investment resources. Although the firm also maximizes capital income, the resulting equilibrium diverges from both the planner’s and the household-driven case, leading to a distinct expression for the optimal tax. Across both decentralized settings, a tax on RD becomes necessary when the marginal return to capital deviates from the marginal return to innovation.

Jueves 11 de septiembre | 12:30 p.m.
Presenta: Juan José Ferro - Universidad de los Andes

Relative price and deterrence: the effect of speeding tickets on road behavior
Governments use fines in order to deter socially unwanted behavior on a wide array of issues. It is commonly assumed that, fixing the probability of sanction, the higher the price, the more deterrent a sanction is. I use data from automated speed cameras in Bogotá, Colombia to measure the deterrent effect of a speeding ticket. By using the real speed limit as a source of exogeneous variation and a regression discontinuity design, I find that speeding tickets have a general deterrent effect on speeding behavior but a null effect on reducing traffic accidents. Using the commercial price of the vehicle as a proxy for wealth and the fact that the monetary sanction is fixed, I find that the deterrent effect is concentrated on the higher quintiles of the distribution. I validate these findings with a judge-IV using the fact that a police agent manually verifies all tickets. Other dimensions of driving behavior show that speeding tickets do change behavior, not only adjust beliefs about enforcement. In short, speeding tickets might be less useful for preventing road fatalities than it is commonly assumed and inefficiently expensive for changing behavior for a considerable number of drivers. They also seem to be of little effectiveness for the current public health challenge of traffic fatalities in low and middle income countries. This evidence points to income based fines as a necessary public policy tool.

Jueves 4 de septiembre | 12:30 p.m.
Presenta: Daniel Schwartz - Universidad de Chile

The Rise of a Nudge: Field Experiment and Machine Learning on Minimum and Full Credit Card Payments
An analysis of corporate income tax reveals a largely overlooked fact: statutory tax rates are higher in developing economies. In addition, statutory tax rates are procyclical in low-income economies, rising during downturns and potentially amplifying recessions. This paper develops a theoretical framework that reconciles these two phenomena. In our model, firms choose between formal and informal operations based on their productivity and the benefits of formalization, while the government---constrained by limited tax collection efficiency---must set a statutory tax rate to finance a given level of expenditure. We show that low state capacity forces governments to adopt high statutory tax rates, which in turn raise the threshold for formalization and exacerbate informality. Moreover, during economic downturns, the contraction of the tax base compels these governments to raise statutory rates, rendering fiscal policy procyclical. We demonstrate that this procyclicality intensifies as state capacity decreases, creating a compounding challenge where the weakest states face the most destabilizing fiscal adjustments during economic downturns. We also show that even when firms in different countries have the same inherent productive capabilities, stronger state capacity leads to higher observed productivity. This creates an artificial productivity gap between developing and developed countries, driven by institutional constraints rather than actual differences in productive potential. A dynamic extension of our model reveals how political instability and high reform costs can trap countries in a low-capacity equilibrium. Our framework offers implications for policies aimed at modernizing tax administration, broadening the tax base, and implementing countercyclical fiscal measures in developing economies.
>>Paper

Jueves 28 de agosto | 12:30 p.m.
Presenta: Luis Fernando Mejía - Director ejecutivo Fedesarrollo

Why are Tax Rates High and Procyclical in Developing Economies?
An analysis of corporate income tax reveals a largely overlooked fact: statutory tax rates are higher in developing economies. In addition, statutory tax rates are procyclical in low-income economies, rising during downturns and potentially amplifying recessions. This paper develops a theoretical framework that reconciles these two phenomena. In our model, firms choose between formal and informal operations based on their productivity and the benefits of formalization, while the government---constrained by limited tax collection efficiency---must set a statutory tax rate to finance a given level of expenditure. We show that low state capacity forces governments to adopt high statutory tax rates, which in turn raise the threshold for formalization and exacerbate informality. Moreover, during economic downturns, the contraction of the tax base compels these governments to raise statutory rates, rendering fiscal policy procyclical. We demonstrate that this procyclicality intensifies as state capacity decreases, creating a compounding challenge where the weakest states face the most destabilizing fiscal adjustments during economic downturns. We also show that even when firms in different countries have the same inherent productive capabilities, stronger state capacity leads to higher observed productivity. This creates an artificial productivity gap between developing and developed countries, driven by institutional constraints rather than actual differences in productive potential. A dynamic extension of our model reveals how political instability and high reform costs can trap countries in a low-capacity equilibrium. Our framework offers implications for policies aimed at modernizing tax administration, broadening the tax base, and implementing countercyclical fiscal measures in developing economies.