The Value of Information in Credit Markets, January 2006. (Matlab Codes)	
	We study firm and industry dynamics in economies where there is asymmetric information 
	about the firms' survival probability. Young firms grow as they acquire financial
	reputation in credit markets through two channels: selection and screening. Our economy
	exhibits several features of firm and industry dynamics documented for the U.S. 
	Importantly, while information problems undermine production of young firms, general 
	equilibrium forces induce old firms to produce more, thereby largely offsetting the 
	adverse effect of asymmetric information on aggregate output.
	Renegotiation, Collective Action Clauses and Sovereign Debt Markets, with Federico Weinschelbaum. 
	Journal of International Economics 67, 2005, pp. 47-72. Note on the Cournot equilibria.
	Collective action clauses (CACs) are provisions specifying that a supermajority of 
	bondholders can change the terms of a bond. We study how CACs determine governments' 
	fiscal incentives, sovereign bond prices and default probabilities in environments with
	and without contingent debt and IMF presence. We claim that CACs are likely to be an 
	irrelevant dimension of debt contracts in current sovereign debt markets because of the
	variety of instruments utilized by sovereigns and the implicit IMF guarantee. Nonetheless,
	under a new international bankruptcy regime like that recently proposed by the IMF, CACs
	can increase significantly the cost of borrowing for sovereigns, contrary to what is 
	suggested in previous empirical literature.
    	Wealth as a Determinant of Comparative Advantage. American Economic Review, March 2005.
	This paper shows that a country's wealth drives its comparative advantage when sectors in
	the economy face differential access to credit. Wealthier nations exhibit a comparative 
	advantage toward goods produced in sectors facing more severe financial imperfections.
	These sectors are typically populated by small firms. Empirically this paper documents 
	that those sectors are also labor intensive. Consequently this theory partially offsets
	traditional sources of comparative advantage and offers an explanation for Trefler's 
	missing trade mystery and the Leontief paradox. Furthermore, the theory makes the relation
	between trade and income distribution endogenous.
	Information Capital, Firm Dynamics and Macroeconomic Performance, December 2002. (Matlab Code.)
	I examine the role of information capital accumulation in the firm dynamics and
	macroeconomic performance in economies where firms face repeated adverse selection in 
	credit markets. With asymmetric information, it takes time for good firms to build up 
	financial reputation and net worth. Over time the best firms pay lower interest rates and 
	grow at a speed positively associated with macroeconomic conditions. An unexpected temporary 
	shock partially destroys the firms' net worth, slowing down the accumulation of information 
	capital and weakening overall output performance. This channel is shown to be responsible 
	for generating strong endogenous persistence and amplification at the aggregate level. Both 
	aggregate and firm dynamics are consistent with stylized facts.
	Savings to Growth: An Analysis of Competing Policies (in Spanish), August 1997.
Other work