Research

Peer-Reviewed Journal Papers

  1. “Filling the Gap: Infrastructure Investment in Brazil.” (2018) Journal of Infrastructure, Policy and Development 2 (2), 301-318 (with Mercedes Garcia-Escribano and Izabela Karpowicz). link (28 citations, as of Oct 2019).
    Abstract: Infrastructure bottlenecks have been identified as a key obstacle to growth affecting productivity and market efficiency, and hindering domestic integration and export performance. This paper assesses the state of Brazil’s infrastructure, in light of past investment trends and various quality and quantity indicators. Brazil’s infrastructure stock and its quality rank low in relation to that of comparator countries, chosen amongst main export competitors. We provide evidence that infrastructure affects domestic integration by analyzing price convergence of tradable goods across major cities. The government’s concession program will narrow part of the infrastructure gap, however, governance reforms will be crucial to improving investment efficiency.
  2. “Institutions and Growth: A GMM/IV Panel VAR approach.” (2016) Economics Letters, v. 138, p. 85-91. link (49 citations, as of Oct 2019).

    Abstract: Both sides of the institutions and growth debate have resorted largely to microeconometric techniques in testing hypotheses. In this paper, I build a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years and find support for the institutions hypothesis. Controlling for individual fixed effects, I find that exogenous shocks to a proxy for institutional quality have a positive and statistically significant effect on GDP per capita. On average, a 1% shock in institutional quality leads to a peak 1.7% increase in GDP per capita after six years. Results are robust to using a different proxy for institutional quality. There are different dynamics for advanced economies and developing countries. This suggests diminishing returns to institutional quality improvements.

  3. Domestic market integration and the law of one price in Brazil.” (2016) Applied Economics Letters (Print), v. 23, p. 1-5. (with Troy Matheson) link (10 citations, as of Oct 2019)

    Abstract: This article presents the first assessment of domestic market integration in Brazil using the law of one price. The law of one price is tested using two panel unit root methodologies and a unique data set comprising price indices for 51 products across 11 metro-areas. We find that the law holds for most tradable products and, not surprisingly, nontradable products are found to be less likely to satisfy the law of one price. While these findings are consistent with evidence found for other countries, price convergence occurs very slowly in Brazil, suggesting relatively limited domestic market integration.

Working Papers

  • “Inequality in Brazil: A Regional Perspective.” (with Izabela Karpowicz) IMF Working Papers, v. 17, p. 1, 2017.
  • “Testing Piketty’s Hypothesis on the Drivers of Income Inequality: Evidence from Panel VARs with Heterogeneous Dynamics.” IMF Working Papers, v. 16, p. 1, 2016.

Book Chapters

  1. “Trade Liberalization and Active Labor Market Policies”. (2018) In: Antonio Spilimbergo and Krishna Srinivasan (eds), Brazil: Boom, Bust and the Road to Recovery. (with Alexandre Messa, Carlos Pio, Eduardo Leoni and Luis Gustavo Montes).

    Abstract: Trade liberalization will boost Brazil’s productive potential and growth prospects, but it will also affect labor markets, including employment and wages. Using a computable general equilibrium model with labor frictions and heterogeneity in productivity, this chapter examines the effects of trade liberalization on regional labor markets. Labor markets in regions that now enjoy higher trade protection are more likely to suffer from trade liberalization. Given the limited mobility of labor in Brazil’s domestic market, trade liberalization must be accompanied by active labor market policies and a skills enhancement program, so that workers hurt by trade can acquire new skills for sectors and industries that benefit from the economy’s opening

  2. “Inequality in Brazil: a Closer Look at the Evolution in States”. (2018) In: Antonio Spilimbergo and Krishna Srinivasan (eds), Brazil: Boom, Bust and the Road to Recovery. (with Izabela Karpowicz).

    Abstract: Using a novel methodology that allows households’ incomes to be adjusted for price-level differences across states, this chapter analyzes the evolution of income inequality in Brazil during the period 2004–14. Inequality declined both within and between states. The decline was sharper in more unequal states. The decline in within-state inequality was driven by, among other factors, strong growth of incomes of poor households, while between-state inequality declined because overall income growth was stronger in poorer states.

  3. “Infrastructure in Latin America and the Caribbean.” (2016) (with Valerie Cerra, Alfredo Cuevas, Izabela Karpowicz, Troy Matheson, Rania Papageorgiou, Issouf Samake, Kristine Vitola, and Svetlana Vtyurina) In: Hamid & Berkmen (Eds). Managing Transitions and Risks. 1ed. Washington: IMF. p. 1-115.

    Abstract: Inadequate infrastructure has been widely viewed as one of the principal barriers to growth and development in Latin America and the Caribbean (LAC). Despite the fact that the region’s infrastructure network has been upgraded over the past decade and is broadly comparable with those in other emerging market economies, infrastructure quality across individual countries often compares poorly with their export rivals and, more importantly, considerable catch-up is still required relative to advanced economies. The improvement in infrastructure quality over the past decade reflected both an increase in public investment, facilitated by the commodity boom, and greenfield investment by the private sector, notably in sectors where regulatory impediments had been alleviated. Deepening domestic capital markets helped finance an increasing fraction of private investment in local currency. For most LAC countries, the efficiency of public investment remains below that achieved by advanced economies,
    notwithstanding improvements in fiscal institutions. Reasonably sound frameworks for public-private partnerships in some large economies should be replicated by others to crowd-in greater private participation.