Education

May 2023

Ph.D., EconomicsUniversity of Virginia

Dissertation, defended April 2023

Monetary and Fiscal Policy and Debt Structure in Small Open Economies

Committee: Eric Leeper, Eric Young, Ana Fostel and Felipe Saffie

Abstract

In the past two decades, emerging economies have registered a reduction in the share of sovereign debt denominated in foreign currency and an extension in its maturity. First, I study how these changes affect the optimal monetary and fiscal policy. I derive analytical results using a commitment framework. A higher share of debt denominated in local currency increases the reliance on variations in inflation to hedge against fiscal stress, which in turn increases with the maturity. Additionally, it reduces the relative exposure to foreign shocks. Second, I study the differences in currency composition across countries, focusing on Latin America. In this case I use a time-consistency framework, to capture the large shares of debt denominated in foreign currency observed in the data. I find that large external debt-to-GDP ratios, long debt duration, and low inflation costs encourage more borrowing in inflation-indexed bonds and can explain the larger share of inflation-indexed debt in Uruguay compared to other Latin American countries.

May 2018

M.A., EconomicsUniversity of Virginia

2014

M.S., Economics (selected courses)Universidad de Montevideo, Uruguay

2011

Diploma in Quantitative Methods in Applied Economics and FinanceUniversidad ORT, Uruguay

May 2010

B.S., Economics, with HonorsUniversidad ORT, Uruguay