Macroeconomics with a special interest in Development, Growth, Housing, and International Macroeconomics
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Scopus Publications
Scopus Publications
GROWTH, HOUSING, AND GLOBAL IMBALANCES LUIS FRANJO, LUISA LAMBERTINI, SERHIY STEPANCHUK International Economic Review, 2024 In the decade leading to the Great Recession, the United States experienced rising house prices and current account deficits, whereas China and other fast‐growing Asian economies saw rising house prices accompanied by current account surpluses. To explain these differences, we study a transition path in a two‐country life‐cycle model with housing once the two economies become financially integrated. We allow for asymmetries in productivity growth, the loan‐to‐value ratio, the life‐cycle wage profile, and the population structure across countries. Our findings highlight that differences in the life‐cycle pattern of the wage income profile are key to obtaining our results.
FINANCIAL FRICTIONS AND FIRM INFORMALITY: A GENERAL EQUILIBRIUM PERSPECTIVE Luis Franjo, Nathalie Pouokam, Francesco Turino Economic Journal, 2022 This paper assesses the extent to which financial development and informality are related, and how this relation translates into differences in GDP and TFP across countries. To this end, we develop a quantitative life-cycle general equilibrium model of occupational choice with imperfect tax enforcement, in which informal entrepreneurs have no access to credit and face an endogenous probability of being caught for tax evasion. Our quantitative analysis shows that the degree of financial frictions of a country is crucial in shaping the firm’s incentives to evade taxation, a feature that, in the aggregate, results into a non-linear relationship between financial development and both the size of informality and GDP per capita. We test these model’s predictions with cross-country data and find supporting evidence in favour of both non-linearities.
