Working papers

Conducting Unconventional Monetary Policy with Foreign Exchange Reserves (New draft coming soon!) [JMP version, World Bank Blogs]

This paper studies asset purchase programs sterilized with the use of foreign exchange reserves in emerging markets and developing economies. It provides a theoretical framework to study the effectiveness and the design of this new unconventional policy implemented for the first time during the recent COVID-19 crisis.

Re-estimating Potential GDP: New Evidence on Output Hysteresis (with Diego Anzoategui) [paper, online appendix, slides, poster]

This paper provides a structural estimation method for potential GDP. The method has advantages over existing methods of being simple and immune to Lucas Critique. The estimates for the US provide evidence of hysteresis β€” demand shocks have persistent (but not permanent) effects on potential GDP.

A Note on Optimal Foreign Reserve Management without Commitment [paper]

This paper studies optimal policy for foreign exchange reserve management without commitment. The paper develops a stylized framework incorporating three key ingredients: (i) fear of floating, (ii) forward-looking exchange rates, and (iii) cost of reserve management. The paper first compares the Ramsey and the Markov-Perfect policies. It then provides a sustainable plan that resolves the time-inconsistency in reserve management.

Optimal Foreign Exchange Intervention and Financial Crises [paper]

Best second-year paper, New draft coming soon!

Work in progress


Fair international protocols for the abatement of GHG emissions (with Biung-Ghi Ju, Suyi Kim, and Juan D. Moreno-Ternero), Energy Economics, 2021 [paper]

We lay out theoretical framework for greenhouse gas emission allocation problems in which four allocation rules are characterized from the historical and fairness perspectives. We compute CO2 emission allowances using these rules and compare them with the one proposed at the Kyoto Protocol.