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Department of Economics Seminar Series: Large Devaluations, Heterogeneous Consumption Adjustments, and Macroeconomic Implications
September 22, 2023 @ 11:00 am - 12:00 pm
The Economics Department Seminar Series is back this semester, and the first talk of the series will be held virtually this Friday, September 22 from 11:00am-12:00pm on Zoom. The Zoom link and meeting ID are listed below. Our speaker will be PhD Candidate Luis Cabezas from UCLA. He will present his paper entitled “Large Devaluations, Heterogeneous Consumption Adjustments, and Macroeconomic Implications“.
Zoom link:
https://csulb.zoom.us/j/86896128714
Meeting ID:
868 9612 8714
Luis’ talk will give some insight into how consumer spending on various products across countries behaves differently in response to currency devaluation driven by declines in foreign funding. Please see the abstract below for more details:
“This paper studies massive drops in consumption across households and goods during large devaluations associated with Sudden Stops. Using cross-country comparison and the Mexican 1994-peso crisis as a case study provides evidence that, unexpectedly, consumption of non-tradable goods decreases considerably, falling more for higher-income households. Moreover, expenditure share in tradable goods rises, and this increase changes across households’ income distribution, revealing a non-homothetic behavior. Then, incorporating generalized non-homothetic CES preferences in a HANK open economy model, I show theoretically and quantitatively that non-homothetic preferences allow us to explain previous findings simultaneously and address policy implications.”