I am a postdoctoral researcher at Católica Lisbon School of Business and Economics. In 2025, I will join the Department of Economics at the University of Illinois at Urbana-Champaign as an Assistant Professor.
I received my PhD from the University of Chicago in 2024.
My research covers international, financial, and labor economics.
Email: marcossora@gmail.com
Publications
Macroprudential Policy for Internal Financial Dollarization (with Aleksei Oskolkov).
Journal of International Economics, 2023, Volume 143. Working paper version.
We study macroprudential policy aimed at domestic debt denominated in different currencies. We model a small open economy with entrepreneurs and workers who save and borrow in domestic and foreign currency. Financial frictions make dollar debt on entrepreneurs' balance sheets especially disruptive when the exchange rate depreciates. Falling output causes additional depreciation; this amplification provides a rationale for de-dollarization. On the other hand, de-dollarization is costly because the dollar savings of domestic workers provide them with insurance. We characterize the social marginal benefits and costs of de-dollarization in this context. The social marginal costs are associated with a deterioration in risk-sharing and can be expressed in terms of the interest rate premium on domestic currency assets. We find that these costs are of second order around the unregulated equilibrium but play a role for optimal policy.
Working papers
Using detailed loan-level data from Chile, we document significant geographic differences in interest rates for firm loans. Firms in cities with high borrowing costs pay around 280 basis points more than firms in low-cost cities. While these estimates account for differences in firm and loan characteristics across cities, we find evidence that they are related to the level of concentration in the local loan market. We examine the pass-through of monetary policy to lending rates and find that banks with higher local market shares exhibit stronger pass-through, aligning with models of oligopolistic branch competition.
Commodity price booms lead to substantial wage differentials and increased employment in the commodity sector. This paper investigates the role of uncertainty regarding the duration of such booms in explaining wage differentials, the speed of labor reallocation, and the characteristics of workers who switch sectors. In a standard dynamic discrete choice model with sector-specific human capital the impact of duration risk on labor supply is theoretically ambiguous because workers' retain the option of exiting the booming sector. I apply the model to study the effects of the 2011-2018 mineral price boom on Australia, an exporter of mineral products. After estimating the model using novel matched employer-employee data I study a counterfactual scenario where the end date of the mining boom was known with certainty. I find that the mining’s share of employment in Australia would have increased from 3.7% to 4.4%, wage inequality would have decreased, and the mining sector would have attracted substantially fewer middle-aged workers. The option value mechanism outlined in the theory explains heterogeneous attitudes towards risk for workers of different age groups.
Work in progress
We study the currency invoicing decision of Peruvian exporters during a period of de-dollarization of the national financial system. Between 1993 and 2007 the macroeconomy stabilized and the uncovered interest parity, the premium on local currency debt, fell. We study how exporters responded to the change in the relative price of debt in different currencies by shifting the currency in which they invoiced their exports. This sheds light on the link between the roles that the dollar plays globally in finance and trade. Differential debt requirements by sector allow us to isolate the effect of this mechanism.