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 "Beware the side effects: Capital controls, misallocation and welfare".

Expone: Sofía Bauducco, Jefe del Departamento de Investigación Económica de la Gerencia de Estudios Económicos, División Política Monetaria, Banco Central de Chile.

Co-autores: Eugenia Andreasen, Evangelina Dardati y Enrique Mendoza.

Abstract: We study the effects of capital controls using a dynamic model with heterogeneous firms, monopolistic competition, endogenous trade participation and financial frictions. Taxing foreign borrowing increases misallocation via static effects that reduce capital- labor ratios and increase firm prices, reduces it via dynamic effects that strengthen saving incentives, and may increase or reduce it via general equilibrium effects. Quantitative analysis calibrated to the 1990s Chilean encaje predicts higher misallocation with larger effects on more financially-dependent firms (exporters, younger or less productive firms). Social welfare falls and welfare costs are much larger for exporters. LTV regulation that reduces aggregate credit by the same amount yields much smaller welfare costs, even tough misallocation still rises, because it spreads the burden of credit tightening more evenly and real wages and output fall less. Empirical evidence from Chilean firm-level data shows that misallocation did increase relatively more for more productive firms, for exporters and for firms that were further away from their steady state.

El formato será presencial y el seminario se desarrollará en la Sala P-304.

Saludos cordiales,

Dirección de Investigación