Emilio Zaratiegui
LightNews LightNews
emilio-zaratiegui.bsky.social
Emilio Zaratiegui
@emilio-zaratiegui.bsky.social
48 followers 300 following 11 posts
PhD Candidate at Columbia University | Macroeconomics and International Finance
https://www.emiliozaratiegui.com
Posts Replies Media Videos
emilio-zaratiegui.bsky.social
I am on the Job Market!
In my #EconJMP, I study optimal capital controls considering previously overlooked effects on investment and productivity using a sufficient statistic approach

Estimating productivity losses using micro-data, I find that capital flows should be incentivized.
📈📉🧵
Macroprudential Policy with Firm Heterogeneity, Emilio Zaratiegui, Columbia University, I study optimal macroprudential policy when its effects on investment and productivity are taken into account. To do so, I introduce a tractable way of modeling misallocation that generates a link between investment and productivity and can be easily taken to the data. Because macroprudential policies affect investment, they lead to productivity losses. I show that, when the policymaker is constrained in their available instruments, this generates a policy trade-off between financial stability and productivity growth. I derive a sufficient statistic formula for the second-best policy composed of measurable objects, including its productivity costs. I leverage the tractability of my model to get a range of estimates for the latter using rich firm-level microdata for several European countries. The trade-off is quantitatively relevant: For baseline crisis probabilities, productivity losses switch optimal policy from a capital control to a foreign borrowing subsidy.
November 28, 2024 at 1:43 AM