R E S E A R C H

Publications

Assessing fishing effects inside and outside an MPA: The impact of the Galapagos Marine Reserve on the Industrial pelagic tuna fisheries during the first decade of operation. Marine Policy, Vol. 87, pp. 112-125, January 2018. (with Santiago J. Bucaram, Alex Hearn, Willington Rentería, Rodrigo H. Bustamante, Guillermo Morán, Gunther Reck & José L. García). [link]

Abstract: The conservation benefits of the Galapagos Marine Reserve (GMR), created in March 1998, have been consistently proved for endemic species and populations with limited movements. Yet, to date, no study has explored its effects on highly-migratory pelagic species, such as tuna. To this end, the impact of the GMR on the behavior and productivity of tuna fisheries in this region is analyzed. After considering other potential factors, which occurred approximately over the same period (i.e. increase of fleet size, changes in fishing technology, and climatic events, among others), it was found that the creation of the GMR increased fishing productivity in both the Galapagos Exclusive Economic Zone (EEZ) surrounding the GMR, as well as inside the marine reserve. However, the effect was heterogenous among tuna species – the GMR had a positive impact on the fishing productivity of yellowfin tuna (YFT) and skipjack tuna (SKJ) fisheries, but did not have any significant effect on that of bigeye tuna (BET). Then, it is proposed that the GMR effect might be dissipated by the overuse of Fish Aggregating Devices (FADs), especially in the case of BET.

Work in Progress

Resilience Investment and Aggregate Adaptation to Disaster Shocks

Abstract: This paper studies how resilience investment shapes long-run adaptation to disaster risk in a dynamic general equilibrium growth framework. The economy accumulates productive capital and resilience capital; resilience capital reduces disaster-induced depreciation through a nonlinear protection technology determined by the protection ratio (resilience capital divided by productive capital) and baseline standards. Disaster risk is summarized by the expected depreciation rate implied by a probabilistic shock process. Our quantitative analysis focuses on the model’s stationary equilibrium and steady-state counterfactuals rather than transition dynamics. In steady state, higher disaster frequency or intensity raises expected capital losses and lowers output and consumption, even as optimal protection increases. Comparative statics highlight threshold effects: at low to moderate risk, protection responds smoothly, while sufficiently severe shocks induce disproportionately large increases in the protection ratio that can reduce effective depreciation. Quantitatively, broad productivity gains deliver the largest welfare improvements; when resources are tight, policies that raise resilience productivity or resilience effectiveness are cost-effective complements. The results emphasize that productive capacity is decisive for the optimal resilience mix and provide guidance for standards and financing aimed at strengthening macroeconomic resilience.

Stress-Testing IMF Debt Sustainability Models: Integrating Climate Risks into the Debt Dynamics Tool for Colombia and Peru (with Kevin P. Gallagher and Franco Maldonado)

Abstract: The International Monetary Fund (IMF) has recently moved to expand its mandate to the macro-critical aspects of climate change and climate change policy across its surveillance, advice, and financing activities. In terms of surveillance, one of the most important roles the IMF will need to play is to ensure that member states are able to respond to climate shocks and mobilize the necessary resources to transform their economies toward low carbon and resilient growth paths in a fiscally sound and financially stable manner. A key tool to address this is the IMF’s Debt Sustainability Analysis (DSA), and the related Debt Dynamics Tool (DDT). In this paper, we adjust the IMF's DDT methodology to integrate climate risks and climate transition resources needs in an application to Colombia and Peru. Our examination reveals that climate-related risks may significantly impact a nation’s public debt trajectory, leading to substantial escalation and even raising the likelihood of severe stress events. Crucially, our analysis underscores the necessity for new methodological approaches and data collection mechanisms at the Fund to formally incorporate climate change considerations into the DSA and/or the DDT. By doing so, the IMF would be empowered to provide more precise advice and engage in more fruitful conversations with its member nations.

Dynamic Labor Supply and Crisis Adjustment (with Martín Martínez)

Abstract: This paper studies labor supply as a margin of macroeconomic adjustment during crises. In standard models, negative aggregate shocks reduce both employment and wages. In the data, however, recessions often feature sharp declines in hours worked alongside stable or rising wages, especially during the COVID-19 recession. We propose a dynamic labor supply mechanism in which the disutility of work depends on past labor supply. When households work less after a shock, labor market attachment weakens, raising the marginal disutility of work and slowing the recovery of hours. This mechanism generates upward wage pressure even as employment falls. In an accounting exercise, dynamic labor supply reduces the measured household labor wedge by roughly 10-20 percent on average across alternative assumptions about expectation formation. Embedded in a general equilibrium model, the mechanism amplifies the effects of preference and productivity shocks on hours, consumption, and output while helping rationalize the observed divergence between wages and hours during downturns. The paper highlights household labor supply dynamics as an important component of crisis adjustment and aggregate resilience.

Assessing Economic Preparedness in Copying with Climate Shocks

Abstract: This paper examines the economic consequences of climate change and natural disasters on developing countries, with a focus on the impact of climate shocks on GDP and sovereign debt. Examining seven Eastern Caribbean countries, the study provides a model that explains the dynamic between climate events, GDP, and sovereign debt. By proposing a novel approach for discerning the alterations in a nation's production dynamics when confronted with the impact of a climate shock, our objective is to assess the economy's level of readiness in effectively managing such unexpected contingencies. The study finds that climate shocks can have a significant impact on a country's GDP and its ability to service its debt, with the probability of default increasing significantly in the aftermath of a hurricane or natural disaster. The paper highlights the importance of climate adaptation measures in reducing the impact of climate shocks on vulnerable populations. The findings of this study have important implications for policymakers and financial institutions in developing countries. We underscore the need for proactive measures to mitigate the impact of climate shocks on economic growth and financial stability. In particular, we highlight the importance of building resilience to climate shocks through investments in climate adaptation measures, such as early warning systems, disaster risk reduction, and climate-smart agriculture. The study also emphasizes the need for international cooperation and support to help developing countries cope with the economic consequences of climate change and natural disasters.

V20 Debt Review: An Account of Debt in the Vulnerable Group of Twenty. 4th Edition (with Marina Zucker-Marques)

Abstract: This paper analyzes the macrofinancial constraints that sovereign debt imposes on climate vulnerable economies in the Vulnerable Twenty (V20). It documents recent developments in external debt stocks, debt service burdens, creditor composition, and net transfers, showing that many V20 members continue to face a combination of elevated debt vulnerabilities, high borrowing costs, and constrained fiscal space. These pressures are not peripheral to the climate challenge; they are central to it, as they directly limit the capacity of vulnerable economies to finance adaptation, resilience building, and broader development investment at the scale required. Against this backdrop, the paper also examines debt swaps as a potential instrument for easing financing constraints. It distinguishes among bilateral swaps, third party or multilateral fund swaps, and commercial buyback swaps, and evaluates both their operational feasibility and their quantitative significance for V20 countries. The analysis shows that, although such instruments can provide targeted fiscal relief under certain conditions, their aggregate impact remains inherently limited because they apply only to a narrow portion of total liabilities. The paper concludes that debt swaps may serve as a useful complement within a broader financing strategy, but they are not a substitute for deeper reforms. Durable progress will require larger concessional flows, lower borrowing costs, and faster, more comprehensive debt treatment.

Books

Environmental Case Studies in Latin America: Innovative Financial Solutions (with Santiago J. Bucaram, Elizabeth Tamayo and Alexandra Velasco) - in progress.

Contributions to reports for intergovernmental organizations

Assessing the Current Performance of Tuna Fisheries in the Eastern Pacific, Utilizing the World Bank’s Fishery Performance Indicators (FPI) Methodology for Fisheries in Areas Beyond National Jurisdiction (ABNJ) – for World Wildlife Fund and World Bank
Assessing local vulnerability to climate change in Ecuador and Uruguay – for World Wildlife Fund
First economic assessment of the rights-based management (RBM) pilot for the industrial fishery of titi shrimp (i.e. Protrachypene Precipua) in the Gulf of Guayaquil – Ecuador – for Inter-American Development Bank