I recently visited a nice lagoon in the reserve of Sian Ka’an, near Tulum, in Mexico (to say near Cancun would perhaps be a better indicator of the location for many). You can imagine the place is pretty much in the middle of nowhere. Once we were done visiting the ruins and the boat trip, ….  Read More

It has been a while since I wrote my last entry. I want to talk about two main things which I noticed recently: Instagram and STD. How are they related? The answer is quite simple: externalities. I remember when I was studying as an undergrad that my micro professor taught that marriage and prostitution are ….  Read More

Today I want to talk about one simple economic phenomenon that calls my attention. Similar to what you can read on this article, the following shows a simple table with the median price of a house in the US in different periods of history, the median income, and the expected years it would take to ….  Read More

I have been thinking lately about how exogenous shocks affect the economy. To do that, we need to consider first what a shock is in itself. Life sometimes brings surprises, which can be good or bad. Furthermore, these surprises are sometimes expected and sometimes they are not. For example, when your grandparent dies, it is ….  Read More

I have lately been reading the nobel prize winner Thomas C. Schelling. He starts motivating the book by an anecdote in which the people at a conference sat down at the back of the auditorium, leaving the first twelve rows empty. He found it puzzling, and tried to conjecture some ideas as to why or ….  Read More

I have been reviewing what Robert J Gordon proposes. Here, for example, you can find for example a small TED talk with the summary of his proposal. His main thesis is that there have been three industrial revolutions and that nothing beats the second one: the invention of cars, airplanes, steel industry, chemical industry, strong ….  Read More

Today I want to talk a little bit about a family of prefernces which are famous in macro economics, the GHH preferences. Their origins go back to 1988 to a paper by Jeremy Greenwood, Zvi Hercowitz, and Gregory Huffman. The main idea of the function is to achieve some sort of separability of the labor ….  Read More

Today I want to briefly write about Rockefeller and Standard Oil. Most of what I write here can be found in the documentary Men who built America. It can also be found in some texts written by Jesús Fernández-Villaverde, although they are not yet published, so I cannot, unfortunately, provide the reference. The summary of ….  Read More

Today I will briefly talk about an interesting connection between Machine Learning and Macro by a friend and colleague, Artem Kuriksha, who is working with Neural Networks and Macroeconomics. His idea is to make the policy decision function, namely that of investment, depend on a Neural Network. How does it work? In a usual Aiyagari ….  Read More

Today I would like to change gears a little bit to talk about a fascinating topic: growth. There is one thing that I do not understand, which basically no one understands, so at least I don’t feel bad about it. On the one hand, it seems like some institutions have been more democratic, and that ….  Read More