Thanks for visiting my website! I am a research scholar at the Levy Institute of Bard College. I am part of the Institute’s Macro-Modeling Team and a coauthor of its Strategic Analysis reports. My academic research focuses on macroeconomic theory and policy, growth and income distribution, structural change and patterns of innovation, international financial instability and ecological economics.
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New Research Paper published!
4/10/2025
New Paper Published (with Coauthors)
New Paper Published (with Coauthors)
Pasinetti, debt sustainability and structural change in an era of global finance: an emerging and developing countries’ perspective
Abstract
This paper studies the relationship between financial integration, external debt sustainability and fiscal balance in emerging and developing economies (EDEs). We do so by applying Pasinetti’s ‘geometry of debt sustainability’ to EDEs and analysing how it is shaped by exposure to global financial cycles. Through the lenses of Pasinetti’s theoretical framework, we study whether global finance opens ‘windows of opportunities’ or creates more constraints for EDEs in offering fiscal support for structural change, including green structural transformations. We suggest EDEs may face a ‘gridlock’. Global finance and pressures to keep external debt sustainable make them struggle to maintain vital public investment and enact counter-cyclical fiscal actions. This, in turn, exacerbates technological backwardness, which feeds back in the form of more binding external constraints and tighter ‘surveillance’ by international creditors. We support our theoretical analysis with an econometric study over a sample of 55 countries from 1980 to 2018. Capital controls and external macroprudential policy emerge as fundamental policies enabling EDEs to adeptly manoeuvre through debt challenges without falling into the pitfalls of stagnation and enduring technological underdevelopment.
3/30/2025
New Coauthored Strategic Analysis Published for Greece
New Coauthored Strategic Analysis Published for Greece
Greece: Growing on an Unsustainable Path
Abstract
Greece has been among the fastest growing economies among the EU member states in the post-COVID-19 period. However, in a previous (February 2024) report, Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza raised serious concerns regarding Greece’s dependency on imports. In their latest report, the authors argue that these problems have worsened, and the relatively high growth rates the country has recently achieved have been at the expense of an increase in foreign indebtedness, as well as an increasing transfer of real estate property rights to foreigners—a pattern that cannot be sustained for long.
2/25/2025
New Paper Published (with Coauthors)
New Paper Published (with Coauthors)
Monetary Policy and the Pasinetti Index: A Stock Flow Model for Latin American Economies
Abstract
The Pasinetti index is an early example of the analysis of the effects of monetary policy on income distribution. In this paper, we examine how high interest rates pose significant challenges to the implementation of monetary policy in Latin American economies. We explore the factors contributing to the high costs of borrowing, highlighting a set of stylized facts related to the external financial constraints faced by these countries, including the increase in risk premium. To analyse the macroeconomic and distributional implications of these policies, we develop a stock-flow consistent (SFC) model based on Latin American stylized facts. We incorporate the close relationship between sovereign risk and sovereign premiums, the feedback loop between these two variables, and the role of currency mismatches in the private non-financial sector. Scenario analysis reveals that a tightening of international lending conditions leads to reduced GDP growth, while fuelling a continuous process of income redistribution and currency devaluation.
6/11/2024
New Coauthored Strategic Analysis published for the US
New Coauthored Strategic Analysis published for the US
Economic Challenges of the New U.S. Administration
Abstract
On the eve of the 2024 US presidential election, the authors share their latest macroeconomic projections using the Levy Institute’s tailored stock-flow consistent model and evaluate two alternative policy scenarios, depending upon the next occupant of the White House: (1) a significant increase in import tariffs and decrease in the marginal tax rate, and (2) a substantial increase in government expenditure paired with an increase in the marginal tax rate.
27/7/2024
New Coauthored Paper published for ECLAC Review (In Spanish)
New Coauthored Paper published for ECLAC Review (In Spanish)
Un modelo stock-flujo ecológico para Centroamérica
Un modelo stock-flujo ecológico para Centroamérica
Abstract
En este artículo se presenta un modelo stock-flujo consistente con un módulo ecológico para las economías centroamericanas. El modelo se basa en un conjunto de hechos estilizados. Incluye cinco sectores institucionales (consumidores, empresas, gobierno, banco central y resto del mundo) y siete activos financieros: i) deuda pública emitida en moneda nacional y extranjera, ii) deuda privada emitida en moneda nacional, iii) deuda emitida por el resto del mundo, iv) préstamos de los bancos al sector privado para inversión y crédito al consumo, v) depósitos públicos y privados, vi) préstamos del resto del mundo al sector financiero nacional y vii) efectivo.
JEL: Q54, Q43, E12, N16
15/5/2024
New Coauthored Working Paper published for Levy series
New Coauthored Working Paper published for Levy series
Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades
Deindustrialization from the Center Perspective: US Trade and Manufacturing in the Last Two Decades
Abstract
We argue that the US trade and industry sector has experienced several unsustainable sectoral processes, including (i) a fall in the trade balance in machinery and equipment and high-tech (HT) industries, (ii) a rise in import multipliers in machinery and equipment and HT industries, (iii) a fall in the manufacturing share of GDP in machinery and equipment and HT industries, (iv) a rise in commodities share of GDP, (v) a fall in the wage share, (vi) structural shifts in the consumption share of wages, and (vii) a fall in employment multipliers for the US, particularly in manufacturing. To address these issues, the US must shift toward a more sustainable and value-added economy with a focus on innovation and investment in high-tech industries, renewable energy, and sustainable agriculture. Additionally, policies must be put in place to address the negative impacts of resource extraction and to promote a more equitable distribution of income and wealth.
JEL: C67; D57; O25; D33
2/1/2024
New Coauthored Working Paper published for PKES series
New Coauthored Working Paper published for PKES series
Pasinetti, debt sustainability and (green) structural change at the time of global finance: An emerging and developing countries’ perspective
Pasinetti, debt sustainability and (green) structural change at the time of global finance: An emerging and developing countries’ perspective
Abstract
This paper studies the relationship between financial integration, external debt sustainability, and fiscal policy space in emerging and developing (EDE) countries. We do so by applying Pasinetti’s “geometry of debt sustainability” to EDE countries and analysing how it is shaped by exposure to global financial cycles. Through the lenses of Pasinetti’s theoretical framework, we study whether global finance opens “windows of opportunities” or creates more constraints for EDE countries in offering fiscal support for structural changes, including green structural transformations. This analysis is crucial for tackling the pressing issue of the climate crisis. We suggest EDE countries may face a “gridlock”. Global finance and pressures to keep external debt sustainable make them struggle to maintain vital public investment and enact counter-cyclical fiscal actions. Lack of fiscal space in turn exacerbates technological backwardness, which feeds back in the form of more binding external constraints and tighter “surveillance” by international creditors. We support our theoretical analysis with an econometric study over a sample of 55 countries from 1980-2018. Capital controls and external macroprudential policy emerge as fundamental policies enabling EDE countries to adeptly manoeuvre through debt challenges without falling into the pitfalls of stagnation and enduring technological underdevelopment.
JEL: F65; O14; O23
10/10/2023
New Coauthored Working Paper published for Levy series
New Coauthored Working Paper published for Levy series
A Stock Flow Ecological Model from A Latin American Perspective
A Stock Flow Ecological Model from A Latin American Perspective
Abstract
This study aims to develop an ecological stock-flow consistent (SFC) model based on the Latin American–stylized facts regarding economic, financial, and environmental features. We combine the macro-financial theoretical framework by Pérez-Caldentey et al. (2021, 2023) and the ecological modeling of Carnevali et al. (2020) and Dafermos et al. (2018). We discuss two scenarios that test exogenous climate-related shocks. The first scenario presents the case in which international regulation on commodity trade becomes more stringent due to environmental concerns, thus worsening the balance-of-payment constraint of the region. The second scenario concerns the increase in frequency and intensity of adverse climate events in the region. Both scenarios show that the financial external constraint that determines the growth path of Latin American economies may be further exacerbated due to environmental-related issues.
JEL: Q54; Q43; E12; N16
7/27/2023
New Research Paper published on ROKE (with Botta, Spinola)
New Research Paper published on ROKE (with Botta, Spinola)
Growth trajectories and political economy in a Structuralist open economy model
Growth trajectories and political economy in a Structuralist open economy model
Abstract
This paper presents a set of growth and distribution models for open developing economies under different political economy regimes. These regimes give rise to different institutional frameworks which in turn shape macroeconomic outcomes. We focus on three cases: (1) a pure developmentalist state, (2) conflicting claims between workers and government, and (3) an open capital account under a Neoliberal coalition. The equilibrium growth rate is defined by the Balance-of-Payments (BOP) constraint. Cumulative causation à la Kaldor in periods in which the depreciation of the real exchange rate temporarily raises the equilibrium growth rate allows (under certain conditions) for a process of learning that transforms the income elasticity of exports and hence the BOP-constrained rate of growth in the long run. The model produces a variety of outcomes that explains some of the contradictory results reported in the empirical literature in terms of different constellations of power and institutions .
JEL: O33; O40; O41
5/01/2023
New Research Paper published on STRECO (with Botta, Porcile, Spinola)
New Research Paper published on STRECO (with Botta, Porcile, Spinola)
Financial integration, productive development and fiscal policy space in developing countries
Financial integration, productive development and fiscal policy space in developing countries
Abstract
This paper offers a simple, tractable post-Keynesian model, which highlights the importance of structural change and productive development in defining the dynamics of the Real Exchange Rate (RER) and foreign debt in a small open developing economy. The argument is that in countries that keep the capital account open and rely on austerity policies to induce a notional surplus in the Balance of Payment, the RER can hardly be used as a tool aimed at smoothing the impacts of changes in international financial markets (as argued in the classical macroeconomic trilemma). In our model, capital flows and fluctuations in the RER endogenously feed back into each other and give rise to medium-term cyclical macroeconomic volatility. Fiscal austerity, supposedly taming external imbalances, exacerbates such instability. More diversified productive structures and stronger non-price competitiveness open more space for expansionary fiscal policies, make the economy more resilient to finance-led macroeconomic cycles and make external debt more sustainable. Capital controls, together with stronger price sensitivity of net exports, can further stabilize the economy. The paper carries important policy implications, in particular for the combination of industrial and macroprudential policies in peripheral economies, whose pattern of specialization is highly dependent on a few low-tech commodities. The adoption of industrial policies to foster non-price competitiveness and diversification is critical to sustaining macroeconomic stability, both in the short and the long run.
JEL: O30; F32; F38
3/06/2023
New Research Paper published on ROPE
New Research Paper published on ROPE
Beyond Job Guarantee: The Employer of Last Resort Program as a Tool to Promote the Energy Transition
Beyond Job Guarantee: The Employer of Last Resort Program as a Tool to Promote the Energy Transition
Abstract
We argue that a careful design of a program of direct employment and public provision by the state can have permanent effects and promote the structural and environmental transformation of the economy. Starting from this point, we develop a multisectoral stock-flow consistent model to study the long-run effects of the implementation of a job guarantee program, both in the original formulation of Minsky and in its recent version put forward as part of the ‘Green New Deal’ (GND) policy package. We also assess the impact of both ‘green’ and ‘brown’ standard fiscal expenditures, as well as a policy mix including industrial, environmental and employment measures. Results from our simulations point out that, in order to pursue the twin targets of full employment and environmental sustainability, the government should invest in gross fixed capital formation while both reducing energy consumption and acting as an employer of last resort in order to absorb the workforce expelled from the energy sector.
JEL: B52; J68; Q43
1/27/2023
New WP published for Levy series
New WP published for Levy series
(with Rodousakis, Solkis)
(with Rodousakis, Solkis)
Working Paper No. 1013 | January 2023
The Economic and Environmental Effects of a Green Employer of Last Resort. A Sectoral Multiplier Analysis for the United States
The Economic and Environmental Effects of a Green Employer of Last Resort. A Sectoral Multiplier Analysis for the United States
Abstract
We assess the sectoral impact of the implementation of a “green” employer of last resort (ELR) program in the US, based on an environmental modification of an extended Kurz’s (1985) multiplier framework and data from OECD Input-Output tables. We use these multipliers to estimate the impact of an “optimal” ELR, designed to maximize the impact on both output and employment while minimizing both imports and carbon emissions. We then test several alternative policy scenarios based upon different compositions of US government expenditure. We provide evidence that (1) investing in the optimal sectors in terms of output, employment, Co2, and import multipliers does not always deliver optimal results in the aggregate; (2) ecological sustainability for the US economy also fosters import sustainability; (3) a rebounding effect in Co2 emissions may be tamed if the ELR satisfies the abovementioned optimality condition, though this undermines its success in terms of output and employment.
JEL: B52; C67; D57; J68; Q43
12/28/2022
New Research Paper published on ICC
New Research Paper published on ICC
(with Botta,Porcile)
(with Botta,Porcile)
Abstract
Recent contributions to the literature on industrialization and development have confirmed that manufacturing continues to play a key role as a driver of economic development. As a corollary, these contributions highlight the importance of premature industrialization as a barrier to economic development and as one of the main sources of the middle-income trap. In this paper, we analyze the factors that may have hindered industrial development in the past four decades. In particular, we focus on the role of (non-Foreign Direct Investment) net capital inflows as a potential source of premature deindustrialization. We consider a sample of 36 developed and developing countries from 1980 to 2017, with major emphasis on the case of emerging and developing economies (EDEs) in the context of increasing financial integration. We show that periods of abundant capital inflows may have caused a significant contraction of manufacturing share to employment and GDP, as well as the decrease of the economic complexity index. We also show that the phenomena of “perverse” structural changes are significantly more relevant in EDE countries than in advanced ones and that they may similarly occur across EDE countries, regardless of structural differences in the way manufacturing contributed to their development. Based on such evidence, we conclude with some policy suggestions highlighting capital controls and external macroprudential measures taming international capital mobility as useful policy tools for promoting long-run productive development on top of strengthening (short-term) financial and macroeconomic stability.
JEL: F32, F38, O14, O30
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