Found 34 article(s) for author 'Laura Alfaro'

Fiscal Rules and Sovereign Default

Fiscal Rules and Sovereign Default. Laura Alfaro, February 2016, Paper. “We provide a quantitative analysis of fiscal rules in a standard model of sovereign debt accumulation and default, modified to incorporate quasi-hyperbolic preferences. For reasons of political economy or aggregation of citizens’ preferences, government preferences are present biased, resulting in over accumulation of debt. A quantitative exercise calibrated to Brazil finds welfare gains of the optimal fiscal policy to be economically substantial, and the optimal rule to not entail a countercyclical fiscal policy.Link

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Internalizing Global Value Chains: A Firm-Level Analysis

Internalizing Global Value Chains: A Firm-Level Analysis. Laura Alfaro, Pol Antras, April 2015, Paper. “In recent decades, technological progress and falling trade barriers have allowed firms to slice up their value chains, retaining within their boundaries and in their domestic economies only a subset of their production stages. A key question facing firms worldwide is figuring out which segments of the value chain are more profitably o§shored, outsourced, or both. Building on Antras and Chor (2013), we describe a property-rights model in which the organization of a firm’s manufacturing process is shaped by characteristics of the different stages of production and their position in the value chain…” Link

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The global agglomeration of multinational firms

The global agglomeration of multinational firms. Laura Alfaro, April 2014, Paper. “The explosion of multinational activities in recent decades is rapidly transforming the global landscape of industrial production. But are the emerging clusters of multinational production the rule or the exception? What drives the offshore agglomeration of multinational firms in comparison to the agglomeration of domestic firms? Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of agglomeration and analyze…” Link

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Selection and Market Reallocation: Productivity Gains from Multinational Production

Selection and Market Reallocation: Productivity Gains from Multinational Production, Laura Alfaro, September 2014 , Paper, “Quantifying the productivity gains from multinational production has been a vital topic of economic research. Positive productivity gains are often attributed to within-firm productivity improvements due to positive spillovers from multinational to domestic firms. An alternative, less emphasized explanation is between-firm selection and market reallocation, whereby competition from multinationals leads to factor reallocation andthe survival of only the most productive domestic firms…” Link

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Debt Redemption, Reserve Accumulation, and Exchange Rate Regimes

Debt Redemption, Reserve Accumulation, and Exchange Rate Regimes. Laura Alfaro, August 2015, Paper. “Foreign participation in local-currency bond markets in emerging countries has increased dramatically over the past decade. In light of this trend, we revisit sovereign debt sustainability and incentives to default when the sovereign is temporarily excluded from capital markets. Differently from previous analyses, we assume that in addition to accumulating international reserves, countries can borrow internationally using their own currency. As opposed to traditional sovereign debt models (all in foreign currency)…”  Link 

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Sovereign Debt Restructuring: Evaluating the Impact of the Argentina Ruling

Sovereign Debt Restructuring: Evaluating the Impact of the Argentina Ruling. Laura Alfaro, June 16, 2014, Paper. “Recent rulings in the ongoing litigation over the pari passu clause in Argentinian sovereign debt instruments have generated considerable controversy. Some official-sector participants and academic articles have suggested that the rulings will disrupt or impede future sovereign debt restructurings by encouraging holdout creditors to litigate for full payment instead of participating in negotiated exchange offers. This paper critically examines this claim and argues that the incentives for holdout…” Link verified August 21, 2014

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Do Prices Determine Vertical Integration? Evidence from around the World

Do Prices Determine Vertical Integration? Evidence from around the World. Laura Alfaro, June 2014, Paper. “Despite its pertinence for policy, the role of market forces in determining firms’ integration decisions has received relatively little attention in development economics. This paper focuses on the relationship between product prices and vertical integration: while the IO literature has focused on how integration affects prices, we offer evidence that prices can affect integration. Many theories in organizational economics and industrial organization posit that integration, while costly, increases productivity…” Link

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Sovereigns, Upstream Capital Flows and Global Imbalances

Sovereigns, Upstream Capital Flows and Global Imbalances. Laura Alfaro, May 2014, Paper. “We construct measures of net private and public capital flows for a large cross-section of developing countries considering both creditor and debtor side of the international debt transactions. Using these measures, we demonstrate that sovereign-to-sovereign transactions account for upstream capital flows and global imbalances. Specifically, we find (1) international net private capital flows (inflows minus outflows of private capital) are positively correlated with countries’ productivity growth; (2) net sovereign debt flows…” Link verified August 21, 2014

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The Real Effects of Capital Controls: Liquidity Constraints, Exporters, and Firm Investment

The Real Effects of Capital Controls: Liquidity Constraints, Exporters, and Firm Investment. Laura Alfaro, May 2014, Paper. “This paper evaluates the effects of capital controls on firm-level stock returns and real investment using data from Brazil. Theory suggests that the imposition of capital controls can drive up the cost of capital and curb investment. Credit constraints are also more likely to bind for firms that are more dependent on external finance. The data suggest that there is a significant decline in cumulative abnormal returns for Brazilian firms following the imposition of capital controls in 2008-2009 consistent with…” Link verified August 21, 2014

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To Pay Or Not To Pay: Argentina And The International Debt Market

To Pay Or Not To Pay: Argentina And The International Debt Market. Laura Alfaro, April 25, 2014, Opinion. “Argentina’s escalating financial crisis is taking on the look and feel of 2002, when it defaulted on $82 billion worth of sovereign bonds – a move that triggered economic chaos in that nation. Along with Argentina’s current struggles — the sharp devaluation of its currency, rampant inflation, and civil unrest— past financial problems remain unresolved and much on the minds of its creditors, a few of whom have not yet been repaid from the default…” Link verified June 19, 2014

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