We present a dynamic quantitative trade and migration model that incorporates downward nominal wage rigidities and show how this framework can generate changes in unemployment and labor participation that match those uncovered by the empirical literature studying the "China shock." We find that...

We examine the labor market consequences of recent global supply chain disruptions induced by COVID-19. Specifically, we consider a temporary increase in international trade costs similar to the one observed during the pandemic and analyze its effects on labor market outcomes using a...

Multinational enterprises (MNEs) increasingly impose "Responsible Sourcing" (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just "hot air" or do they impact exposed suppliers and their workers? What...

This paper extends the tourist test model proposed by Rochet and Tirole (2011) by incorporating the government in order to take into account informality (understood as tax evasion in cash payments) and the net social cost of cash usage. These two elements are relevant in developing countries,...

Despite the implementation of negative nominal interest rates by several advanced economies in the last decade and the many papers that have been written about this novel policy tool, there is still much we do not know about the effectiveness of this instrument. The pass-through of negative...

In spite of deep structural reforms, Central American countries have failed to experience rapid and stable growth in recent years. This paper explores whether and to what extent we can consider lack of innovation and technology adoption as a main reason for this disappointing experience. The...

Industrial agglomerations or `clusters` arise in the presence of industry-specific and local externalities, also called Marshallian externalities. The standard argument is that such externalities may justify a policy of infant-industry protection to allow and encourage clusters to emerge. This...

There is a common perception that low productivity or low growth is due to what can be called an `innovation shortfall,` usually identified as a low rate of investment in research and development (RD) compared with some high-innovation countries. The usual reaction to this perceived problem is...

This paper discusses coordination failures, their relevance to developing countries, and the circumstances under which they occur, arguing that that clusters can be seen as agglomerations of firms and organizations in related economic activities among which coordination failures are likely to...

This paper examines the microeconomic interventions used to complement Washington Consensus reforms in Latin America. It maintains that the kind of interventions currently in vogue in most countries lack a sound theoretical and empirical foundation or are applied in a manner likely to prove...