Working Papers

1. Firms' Expected Growth and the Transmission of Monetary Policy to Investment
   with Carlos Eggers
   
   [ Paper | Abstract ]

   This paper studies how firms’ expected long-term growth affects the transmission of monetary policy to investment. Using analyst forecasts of long-term growth, we document that investment in high-growth firms is significantly more sensitive to monetary policy shocks. This effect persists even after accounting for heterogeneity in firms’ exposure to financial frictions and is, in fact, stronger among firms with high liquidity and low leverage. We show that our main result is consistent with neoclassical models of investment, where long-term growth determines the duration of the firms' cash flows and thus their responses to interest rate changes.
2. The Aggregate Effects of Public Holidays
   with Rodrigo Wagner
   
   [ Paper | Abstract ]

   This paper studies the effect of a marginal working day on aggregate output. To do so, we exploit a new panel covering 221 countries from 2000 to 2019, together with a novel source of exogenous variation: the mechanical change in working days that arises when a holiday falls on a weekend. Changes in effective working days are economically meaningful, with the average country in our sample experiencing a year-to-year change of up to 2.5 percent (roughly 6 days). Using this variation, we estimate an elasticity of GDP growth with respect to changes in working days of 0.17. The effect is concentrated in industrial sectors and insignificant in agriculture; it is also stronger in countries with a higher share of formal employment. We further find that years with more working days are associated with lower self-reported happiness and higher work-related mortality, revealing costs and benefits beyond output.
3. The Portfolio Choice Channel of Wealth Inequality
   with Mauricio Calani
   
   [ Paper | Abstract ]

   This paper studies how differences in portfolio choice across households help explain the highly unequal wealth distribution seen in the data. It has been well documented that participation rates are substantially smaller than the ones predicted in standard models of portfolio choice. Also, both participation rates and risky shares are highly increasing in wealth. However, both features are usually absent in workhorse models of wealth accumulation. We introduce portfolio choice and adjustment frictions into an otherwise standard model of household saving behavior. Calibrating it to U.S. household-level data, we show that the model is able to provide a better fit of the wealth distribution while being consistent with well-known facts of households’ portfolio choices. In particular, the model explains roughly half of the gap between top wealth shares predicted by traditional models of wealth accumulation (e.g. Aiyagari, 1994) and the data.

Publications

1. How Much Does Mobility Matter for Value-Added Tax Revenue? Cross-Country Evidence Around COVID-19
   with Rodrigo Wagner
   International Tax and Public Finance, 31(3), 841–855 (2024)
   [ Journal Version ]