Alfonso Gauna - Research

Working Papers

"Models of Balance of Payments Crises with Capital Controls" with Emilio Espino and Andy Neumeyer

Abstract: We examine techniques to delay the collapse of unsustainable fixed exchange rates caused by excessive domestic credit growth. Capital controls, combined with free trade, postpone the collapse, resulting in a trade deficit and consumption boom. Real interest rates rise above international levels, and reserves depletion triggers anticipated devaluation. Delaying monetization while maintaining fiscal policy prolongs low inflation, but leads to higher inflation later. Introducing import restrictions alongside capital controls sustains the fixed exchange rate but misallocates resources, creating a wedge between domestic and international prices. This wedge, worsened by excessive money supply expansion, leads to no exports.

"Labor conflict and sectoral wage setting in Argentina" with Dario Judzik and Eduardo Levy Yeyati

Abstract: We contribute to the analysis of the macroeconomic and labor market impact of labor conflict in two ways: we introduce a Labor Conflict Index (LCI), built at both the aggregate and the sectoral level, and estimate the effect of union bargaining power, as captured by the LCI, on real wage determination. We find that, in the short run, conflict pays off: Across sectors, a 1% increase in bargaining power, as measured by the LCI, leads to a 0.5% - 2% increase in the average real wage.

Undergraduate Thesis

"A Rent-Seeking Coalition and Efficiency Losses"

Abstract: The starting point of this paper is an analysis of two rent-seeking coalitions in Ar- gentina: the transportation drivers union and Aerolineas Argentinas. We find that the labor income earned by members of the transportation drivers union is significantly higher than that made by similar formal employed workers. In the case of Aerolineas Argentinas, we identify that the company was forced to increase its productivity once the air transport mar- ket became more flexible and the basis for competition with other firms was established. To explain these results, we develop an economic model wherein a continuum of entrants and an incumbent coalition compete on prices. We emphasize the equilibrium where the coalition restricts the entry of foreign firms and operates as a monopoly. By calibrating the parameters of our model, we validate that under the deterrence scenario aggregate output is lower than that computed under perfect competition.

Files for replication are availables here.