Master Theses

CEMFI publishes two series of research papers: Working Papers and Master Theses.

The Master Theses series contains a selection of the best master theses submitted by the students who complete our master program.

  • [1601]

    Stefano Pica

    Food versus non-food consumption insurance in Uganda


    Households’ income fluctuations in poor countries call for risk smoothing mechanisms, yet insurance is always found to be incomplete. We build a twogoods complete markets model, and confirm this result with the UNPS - a new representative Uganda panel data. As an attempt to uncover the friction to full insurance, we build a two-goods limited commitment model which we test and reject. The empirical evidence suggests that the degree of consumption insurance differs across consumption goods: Households insure food better than other nondurables. This finding has potential policy implications (e.g., consumption-item specific such as food coupons).

  • [1602]

    Aliaksandr Zaretski

    Optimal macroprudential rules


    This paper presents a model to study macroprudential rules for bank capital requirements featuring two financial frictions: entrepreneurs borrowing from bankers is constrained by the expected future value of their capital stock, while bankers borrowing from households is limited by the regulatory bank capital requirement. Binding borrowing constraints create inefficient distribution and variance of consumption. I consider macroprudential rules responding to relative or absolute deviations of output, loans, loans-to-output ratio, and both loans and output from the steady state. The optimal one-variable rules are countercyclical because they reduce the variance of entrepreneurs consumption and allow bankers to accumulate more net worth in good times. Households lose due to the higher variance of inflation after productivity shocks. However, welfare is the highest under the joint rule which makes households gain.

  • [1603]

    Carlos Victoria Lanzón

    Is Spain fiscally partisan? Evidence from local elections


    The study of partisan politics has been a long-lasting topic in the economic literature. However, a naïve approach to the study of the effect of party control on economic outcomes can be highly misleading. In order to solve this endogeneity problem, regression-discontinuity (RD) designs have been extensively used in recent years. The purpose of this Master Thesis is to study if the ideology of the mayor in a city council affects fiscal outcomes using close local elections. There are positive and significant differences between left-and right-wing governments: having a left-wing government increases total revenues and expenditures by 9-11%.

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