WP: 20 Years of Dollarization in Ecuador (A SCA Analysis)

A paper co-authores with one of MSU Denver students, on the 20-year mark of dollarization in Ecuador.


This paper uses a Synthetic Control Analysis to examine the economic effectiveness of dollarization in Ecuador. We address common concerns surrounding the adoption of dollarization as a policy and provide several solutions to those concerns. We find that dollarization resulted in significant higher levels of income without clear evidence of worsening in social health variables such as infant mortality, poverty, and income distribution.

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Can Cryptocurrencies Become a Commonly Accepted Means of Exchange?

This chapter studies the challenges a cryptocurrency faces to become a common means of exchange. In particular, the paper discusses the scalability constraint that limits the number of transactions a cryptocurrency may be able to verity per unit of time, the network effect in goods that function as money that increases the cost of new currencies to gain market share, and the implications of the fixed monetary rule present in most cryptocurrencies that departs from an elastic optimal monetary policy. Potential solutions for each case are also discussed.

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WP: Hermeneutics and Phenomenology in the Social Sciences: Lessons from the Austrian School of Economics Case

Latest work with Gabriel Zanotti and Agustina Borella. In this occasion we explore the recent hermeneutics episode in the Austrian School of economics. Implications that transcend this school of thought.

We study a case that applies hermeneutics to social sciences, in particular to the Austrian school of economics. We argue that an inaccurate treatment of hermeneutics contributed to an epistemological downgrade of the Austrian school in the economic scientific community. We discuss how this shortcoming can be fixed and how a proper hermeneutic application to the Austrian school explains why this school of thought is neither positivist nor postmodern.

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WP: Rediscovering Buchanan’s Rediscovery

Se cumplen 100 años del nacimiento de James M. Buchanan. Public Choice esta editando un número especial por dicha ocasión. Una gran satisfacción ser parte de ese número con un paper escrito junto a Edward J. Lopez (Western Carolina University).

While Buchanan is best known for the economics of politics and constitutions, his seminal contributions to this field are but one branch of his more underlying methodology and approach to doing social science. Buchanan’s fundamental project was to re-orient economics and social science toward an analysis of symbiotic exchange (catallactics) rather than of antiseptic allocation (optimization). The most definite statement of this contribution lies in Buchanan’s 1963 presidential address to the Southern Economic Association, “What Should Economists Do?” which was later expanded into a book of the same title. This paper seeks to draw attention to several of Buchanan’s more recent but lesser known articles where he fully develops this theme. He calls on economists to rediscover Adam Smith’s “elementary notion” about the division of labor and the extent of the market, and he professes the notion of “generalized increasing returns” as a mechanism for economists to rediscover their Scottish Enlightenment roots within the neoclassical framework. In this same vein, we also discuss how Buchanan’s rediscovery might apply to two prominent and ongoing twenty-first century issues, trade restrictions and populism.

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WP: Microfoundations and Macroeconomics (20 Years)

Se cumplen 20 años de la publicación de Microfundations and Macreconomics: An Austrian Persepctive the Steven G. Horwitz. Debajo mis reflexiones para un symposio sobre el libro organizado por The Review of Austrian Economics.


This paper summarizes Horwitz’s contributions in Microfoundations and Macroeconomics: An Austrian Perspective and evaluates its connection with recent contributions in Austrian macroeconomics. The paper emphasizes the connection between relative price, monetary equilibrium, and monetary policy. The paper pays particular attention to the implications of Horwitz’s denomination of capital theory as a “missing link” in economic theory.

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Emilio Ocampo: The Economic Analysis of Populism

Uno de los temas políticos relevantes en Argentina, y también en Latino América, es el del populismo.

Emilio Ocampo tiene interestantes trabajos sobre este tema (por ejemplo aquí y aquí). Recientemente ha publicado un paper donde analiza la literatura económica que trata el tema del populismo.

El trabajo es muy completo e interesante, recomendable para quienes tengan interés es un análisis serio sobre este tema.


Although the application of the conceptual and analytical framework of economics to the study of populism is still in its infancy, great advances have been made in recent years. This paper reviews some key contributions behind this progress. When analyzing populism, economists face two methodological hurdles: lack of consensus and clarity about its definition and reconciling the populist vote with voter rationality. The former has plagued sociologists and political scientists for decades. As to the latter, it raises a conundrum: if populist policies are detrimental to economic growth, as most economists agree, the vote for a populist candidate suggests some irrationality or inefficiency in the political markets. The works reviewed in this paper propose alternative approaches to address both issues. The most promising line of research in the economic analysis of populism draws concepts from other social sciences such political theory, sociology, history and social psychology.

Acceder al paper en la página del CEMA.

WP: Why Did Inflation Targeting Fail in Argentina?

In 2016, the new Argentine government decides to implement an inflation targeting regime. In 26 months, said regime was abandoned. Argentina may be the only case of a country that abandoned this regime.

In this paper, with Federico Julian Ferrelli Mazza (ESEADE), we study why this regime failed in Argentina. We find that a main problem was an implementation inconsistency, which was accelerated (but not produced) by a credibility shock in December 28th, 2017.


Argentina’s experience with inflation targeting lasted only 26 months. In this paper, we study the reason why this regime failed in Argentina and the economic context of its implementation. We find that the main reason was an internal inconsistency in how inflation targeting was implemented, and that said inconsistency was accelerated by a negative credibility shock in December 2017. While other events, such as external shocks, also played a role, they are not enough to explain the shortcomings of the inflation targeting experience in Argentina.

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The Super-Alertness of Central Banks

This is a new paper with Alexander Salter (Free Market Institute at Texas Tech University) originally prepared for a conference co-organized between The Wirth Institute for Austrian and Central European Studies (University of Alberta) and the Mercatus Center (George Mason University).

This paper contributes to the Austrian literature. In particular, it applies Kirzner’s entrepreneurial alertness to the realm of policy-making and Koppl’s Big Players (such as a central bank).

This paper applies Kirzner’s theory of entrepreneurial alertness to central banking. As opposed to entrepreneurs operating within the market, central banks can operate outside the market by defining its structure and regulations. We label as “super-alertness” the particular type of Kirznerian alertness that central banks are required to have to successfully achieve stable monetary equilibrium.

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WP: The Grecian Horse II

Borrador, junto a “Alex” Padilla de The Grecian Horse. En esta serie de papers estudiamos si los inmigrantes importan “mala” instituciones a los Estados Unidos de sus países de origen.


In recent years, in response to an increasing literature pointing to the economic deadweight loss associated with immigration restrictions, a literature has emerged pointing to the negative economic repercussions on economic growth would increasing immigration from countries with poor institutions have on the quality of the host country’s institutions when these immigrants import their institutions into their host countries (Borjas, 2014, 2015). Since then economists have attempted to test whether immigrants have a negative impact on their host country’s institutions (Clark et al., 2015; Powell, Nowrasteh, and Clark, 2017; Padilla and Cachanosky, 2018). This paper builds on Padilla and Cachanosky (2018) and examines how immigrants grouped according to the Economic Freedom of the World quartile their country of origin was ranked at time of the census may impact the economic institutions of the states as measured by Economic Freedom of North America index. Our results show that, in the short run, we do observe that the relationship between migrants originating from countries with poor economic institutions and economic freedom is negative, but, in the longer run, that relationship becomes positive, particularly, in the area of labor market freedom. On the other hand, in the longer run, the relationship between migrants coming from most economically free countries and economic freedom is negative. Our results are robust to various specifications.

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WP: A Panel Data Analysis of Latin American Populism

Nuevo working paper sobre populismo con Alexandre Padilla. En esta ocasión realizamos un análisis de panel sobre cinco países “populistas” en Latino América. Los resultados coinciden con los del control sintético de Grier y Maynard (2016) para Venezuela.

This paper studies the impact of 21st century populism in Latin America on income and human development. We find a significant economic cost of populism that is consistent with other studies using a different methodology than ours. Our sample consists of five Latin American countries representative of populist governments: Argentina (2003 – 2015), Bolivia (since 2006), Ecuador (since 2007), Nicaragua (since 2007), and Venezuela (since 1999).

Acceder al borrador en SSRN.