I am currently a PhD candidate in economics at Columbia University, concentrating in macroeconomics and international finance. My research focuses on how heterogeneity across firms and households affect macroeconomic dynamics. My personal website is https://www.emiliozaratiegui.com/.
I study how capital misallocation affects optimal macroprudential policy in a small open economy susceptible to sudden stops. I introduce a novel and tractable way of modeling misallocation that generates a link between investment and productivity and can be easily taken to the data. 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 formula for the second-best capital control that only requires a few sufficient statistics, including the productivity cost of capital controls. Leveraging the tractability of the model I obtain a range of estimates for the latter using firm-level microdata for several European countries. The trade-off is quantitatively relevant: for the baseline crisis probabilities, productivity losses reduce optimal capital controls from 0.22% to a subsidy of almost 0.4%. Productivity losses are also a source of heterogeneity, with capital controls varying as
much as 0.4% within the countries in the sample.
Publications
Principles of Economics – Fall 2020
Money, Banking and Credit – Spring 2021
Advanced Macroeconomics – Fall 2022 and 2023
Macroeconomics I (MA) – Summer 2023
