Economia LACEA Journal

Why do economies become persistently overregulated? Because regulation is rarely designed by benevolent planners — it is shaped by concentrated interests and bureaucratic incentives. In the tradition of the Chicago political economy of regulation school, and relying on evidence from Argentina’s current reform program, Federico Sturzenegger’s Carmen Reinhart Lecture, now published in Economía (LACEA), shows how even “market failures” can justify deregulation, not more rules — and provides an operational blueprint to implement it. @fedesturze economia.lse.ac.uk/articles/10.31…

The bottom line: In a developing country context with liquidity-constrained households and modest behavioral responses, unemployment insurance delivers high welfare value per peso spent. The case for expanding UI in Argentina is strong.

A methodological contribution: fiscal externalities matter more than the choice of estimation method. Whether using duration models, hazard rates, or total UI paid, results are similar—but including/excluding wage and tax externalities shifts estimates substantially.

🗒️ New article in Economía/LACEA: "The Fiscal Costs of Unemployment Insurance" doi.org/10.31389/eco.5…

The paper: Cavallo, Eduardo, and Eduardo Fernández-Arias. “External Crisis Vulnerability in Latin America and the Caribbean.” Economía LACEA Journal 25, no. 1 (2026): 1–14. DOI: doi.org/10.31389/eco.4…

This paper took a long time to cook, and many twist and turns in the way. Thank you @EconomiaJournal and two incredible editors along the way: Verónica Rappoport and @SFGaliani. A special gratitude to @JMNRinaldi who is the coauthor of the companion paper.

📄New paper with Eduardo Fernández‑Arias in @EconomiaJournal: "How vulnerable is Latin America & the Caribbean to external crises today?" 📈Good news: vulnerability is near a historic low. 📉Bad news: LAC is still riskier than peers doi.org/10.31389/eco.4…