Topics in International Macroeconomics and Econometrics

Abstract

This dissertation is composed of three essays, two in international macroeconomics and one in climate econometrics. The former center on two main features of emerging market economies: financial dollarization of private portfolios, and sudden stops in capital flows. The first essay explores the reasons behind the high levels of financial dollarization in Latin American economies and suggests that dollarization can arise within a country from the interaction of households and domestic firms, de-emphasizing the role of international financial markets. The second examines how the debt choice from a social planner that makes a decision that is robust to a worst-case distribution of shocks, consistent with the data, results in higher optimal macroprudential taxes that reduce the probability and severity of a sudden stop, but do not necessarily improve welfare gains. The third essay, in climate econometrics, finds estimates of the transient climate response, a measure of the short-run impact of increasing carbon dioxide concentrations on mean global temperatures, by employing instrumental variables to address simultaneous causality bias from feedback effects of temperature on concentrations. Estimates of the TCR fall within the range in the IPCC-AR5 and provide new observational confirmation of model-based estimates.