Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Large Devaluations, Heterogeneus Consumption Adjustments and Macroeconomic Implications".

Expone: Luis Cabezas, Economista Senior Banco Central de Chile.

Abstract: This paper studies massive drops in consumption across households during large devaluations associated with sudden stops. Using cross-country comparison and the Mexican 1994-peso crisis as a case study provides evidence that, unexpectedly, non-tradable consumption decreased considerably, as much as tradable. Employing micro-data, we show that non-tradable consumption falls more for higher-income households. Moreover, expenditure share in non-tradable increases with income level, reflecting non-homotheticities. As a result, higher-income households concentrate their expenditure on non-tradable and motivate the aggregate result. Based on this evidence, we build a new open economy framework that combines a Heterogeneous Agent New Keynesian structure and non-homothetic CES preferences. We show this framework allows us to reconcile micro and macro evidence of the Mexican 1994-peso crisis and a novel result: The propagation of disturbances across economic sectors through household consumption decisions is asymmetric, depressing production more when it starts from the tradable sector. Finally, through sufficient statistics, we provide evidence of the economic significance of the interaction between heterogeneous consumption bundles and MPCs.

El formato será presencial y el seminario se desarrollará en la Sala P-302.

Saludos cordiales,

Dirección de Investigación