My profile on IDEAS / REPEC can be found here.

Working Papers / Current Research:


"Trading down and Inflation Bias"


Recent literature discussed the observed missing disinflation (inflation) during downturns (and the recovery phases) of the business cycle. We suggest that part of the explanation is related to trading down during the business cycle. This endogenous, to the cycle, consumption choice of quality could bias the inflation profile leading to a less responsive reported prices. As individuals switch to lower quality goods, during downturns, the endogenous increase in demand reduces the price decrease flattening the observed inflation profile. In this paper we will document the extend of the shift in consumption habits using detailed supermarket scanner data from the US that span from before the Great recession until the recovery and estimate the effect on observe aggregate inflation rate including a theoretical model. 

JEL Classification: E2; E3; E4
Keywords: Inflation bias, quality choice, business cycles


"Wages, Compositional Effects and the Business Cycle", May 2018 Submitted ECB Working Paper Series


In this paper we are using individual level data to control for the effect of workers heterogeneity and labour force composition changes on real wages and wage cyclicality. We find significant compositional effects especially in countries where increases in unemployment where more severe. The importance of the results is twofold. Firstly, the results partially explain the muted response of the observed real wages on the business cycle as wages decreased more then what the aggregate numbers suggest during the downturn a picture that is reversed during the recent years. Secondly, the compositional effects are highly correlated with the severity of the business cycle leading to differential effects across countries. These differences significantly contribute to the rebalancing of the euro area real wages a fact that is understated by the aggregate data. Additionally we try to explore and quantify the components of the compositional effects. The decomposition shows that education and experience tend to have the most significant impact.

JEL Classification: J30; E32
Keywords: Wage cyclicality, Compositional bias, Wage inflation


"Evaluating The Marital Contract Effect: A Natural Experiment",  Draft out soon


In this paper we exploit the WWII draft as a natural experiment which exogenously shocks marriage incentives in order to estimate the causal effect of marriages on fertility and other fam- ily outcomes. The purpose of the paper is to assess whether the act of marriage per se has any effect on individuals predetermined choices, such as the age at which you produce an offspring. During WWII, young men could avoid the draft by getting married. This provides exogenous variation in marriages which were induced by draft evasion behavior, allowing us to estimate the true treatment effect. Additionally, using a simple search and matching model we show that an asymmetric increase in the value of marriage will decrease the quality of the induced matches. Our results show both a strong response of births and divorces to the draft induced marriages, indicating both an alteration of the fertility decisions and a reduction to the realized quality of the matches.

JEL codes: J12, J13, J18, N32
Keywords: Marriage, Fertility, Matching, WWII Draft. 



Undergraude Papers (Not indented for publication):


"Political Budget Cycles Revisited: The Case for Social Capital", September 2013



Recent literature on Political Budget Cycles has provided appealing evidence that their existence is conditional to country specific characteristics. In this paper we hypothesize that the level of social capital prevailing in a country might be an underlying fundamental reason that might be driving these results. We provide strong evidence that political budget cycles are only present in low social capital countries by utilizing a large panel data set for 63democratic countries. We also show that the political budget cycles occur both in developing and developed countries under low social capital. Simultaneously, our results are robust under most other conditional effects considered by the literature. Finally, we also propose a theoretical model of conditional capital budget cycles by adapting a moral hazard model to account for different distributions of social capital.

JEL Classification:  E02 ; E32 ; E62 ; D72 ; H60 ;

Keywords:  Political Budget Cycles; Political Processes; Trust; Social Capital;



"Trust, Social Capital and the Success of Economic Reforms for Growth Accelerations,

Conditional on Political Regimes", November 2012 (with Fabian Ten Kate)



Social capital, commonly defined as generalized trust, is proven to be one of the factors driving economic growth along with traditional forms of capital. In the long-run, the formulation of social capital depends on formal institutions. In the short-run however, it is a fairly static variable that we hypothesize might affect the effectiveness of economic reforms. Thus we argue that in high social capital environments, economic reforms might have an increased probability of triggering growth accelerations vis-Ã˘a-vis low social capital environments. Furthermore, due to its influence on the efficiency of governance in democratic regimes, we hypothesize that there will be clear difference in the success of economic reforms in terms of growth accelerations. Hence, economic reforms undertaken by a democratic regime, will underperform in comparison to reforms by an autocratic regime in a low social capital environment, and outperform in high social capital environment. Focusing our attention on the determinants of growth acceleration episodes, a newly established line of research that takes into account the short-run volatility of growth rates, we find that social capital per se, contrary to our priors, turns out to have a negative effect on the outcomes of reforms. However, when the interaction with political regimes is introduced, we find a robust positive influence of social capital in democratic regimes, and a negative effect for autocratic regimes.

JEL Classification:  O10 ; O43 ; O44 ; P41 ;

Keywords:  Trust; Social Capital; Economic Freedom; Growth; Political Regimes