Carlos Esquivel

Gabriel Devoto Gabriel Devoto Ph.D. Candidate in Economics

Why does Latin America suffer from high inflation, high informality, and low financial intermediation?

UMN Econ JMC Gabriel Devoto's @gabriel-devoto.bsky.social hypothesis: Government’s use of inflation as fiscal tool causes informality and low financial intermediation.

www.gabrieldevoto.com

If your department is hiring in Macro, check out @gabriel-devoto.bsky.social work on inflation and informality. On top of the JMP, I witnessed firsthand Gabriel’s development as a macroeconomist.

Gabriel Devoto Gabriel Devoto Ph.D. Candidate in Economics

He is in the job market this year, about to graduate from the great @umn-econ.bsky.social under the guidance of fantastic advisors. If you’re looking to hire an international macroeconomist and a great guy you should definitely check him out 👇

www.gabrieldevoto.com/home

This reduces savings and has a negative effect on financial intermediation, which in the long-run leads to higher informality and lower tax revenues from the shrinking formal sector.

He develops a general equilibrium model in which these interact and shows that inflation increases household’s incentives to hold cash to pay for the now more expensive informal goods.

@gabriel-devoto.bsky.social documents that countries with high levels of inflation also feature large informal sectors and limited financial intermediation.

Inflation, informality, and financial intermediation are at the core of policy makers’ concerns in Latin America.

Some argue that inflation may work as an imperfect, but effective, way of taxing the otherwise fiscally elusive informal sector.

They get it wrong…

Mauricio is a terrific economist and my best friend. Doing the PhD with him was a total pleasure. He is exceptionally generous and tirelessly provided feedback and comments to me and others, all of whom were working on different topics.

@umn-econ.bsky.social JMC Maurico Barbosa-Alves @mbarbosaalves.bsky.social unpacks a critical challenge: how climate change will reshape food prices and impact different income groups. Very interesting paper on climate change. Check it out.

How will climate impact poor households in developing countries?

UMN Econ JMC Maurico Barbosa-Alves @mbarbosaalves.bsky.social constructs a model of Brazil in which high temps lower crop yields and agricultural incomes but poor road networks also increase food prices.

mbarbosaalves.github.io

Mauricio is in the Job Market this year graduating from the great @umn-econ.bsky.social and you should definitely check him out if you’re looking to hire a great colleague doing macro and trade 👇

mbarbosaalves.github.io

Him and his coauthor Braulio develop a state-of-the-art special macro trade model to investigate these effects in general equilibrium. The model is disciplined using micro data from Brazil and is a fantastic display of cutting edge theoretical and empirical work.

Mauricio’s JMP shows that these investments may have a more pressing motivation: mitigating the effects of climate change, especially on the poor.

We have known for a while that investment in infrastructure that facilitates trade has huge potential to generate economic growth.