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Federal tax policies, congressional voting, and natural resources (2019)
Journal Article
Perez-Sebastian, F., & Raveh, O. (2019). Federal tax policies, congressional voting, and natural resources. Canadian Journal of Economics / Revue Canadienne d'Économique, 52(3), 1112-1164. https://doi.org/10.1111/caje.12404

Can abundance of natural resources affect legislators' voting behavior over federal tax policies? We construct a political economy model of a federalized economy with district heterogeneity in natural resource abundance. The model shows that represen... Read More

Heterogeneous vertical tax externalities and macroeconomic effects of federal tax changes: the role of fiscal advantage (2019)
Journal Article
Perez Sebastian, F., Raveh, O., & Reingewertz, Y. (2019). Heterogeneous vertical tax externalities and macroeconomic effects of federal tax changes: the role of fiscal advantage. Journal of urban economics, 112, 85-110. https://doi.org/10.1016/j.jue.2019.06.003

How do state tax rates respond to federal tax shocks? This paper presents a novel mechanism of heterogeneous vertical tax externalities across state-levels of fiscal advantage, showing that tax increases can be expansionary even without their reinves... Read More

What drives vertical fiscal interactions? Evidence from the 1980 Crude Oil Windfall Act (2018)
Journal Article
Perez-Sebastian, F., & Raveh, O. (2018). What drives vertical fiscal interactions? Evidence from the 1980 Crude Oil Windfall Act. Regional Science and Urban Economics, 73, 251-268. doi:10.1016/j.regsciurbeco.2018.10.004

In economies with multi-level governments, why would a change in the fiscal rule of a government in one level lead to a fiscal response by a government in a different level? The literature focused primarily on the standard common-pool problem, while... Read More

The public and private marginal product of capital (2018)
Journal Article
Lowe, M., Papageorgiou, C., & Perez Sebastian, F. (2019). The public and private marginal product of capital. Economica, 86(342), 336-361. doi:10.1111/ecca.12268

Why doesn't capital flow to developing countries as predicted by the neoclassical model? What are the direction and degree of capital misallocation across nations? We revisit these questions by removing public capital from total capital to achieve a... Read More

Natural resources, decentralization, and risk sharing: can resource booms unify nations? (2016)
Journal Article
Pérez-Sebastián, F., & Raveh, O. (2016). Natural resources, decentralization, and risk sharing: can resource booms unify nations?. Journal of Development Economics, 121, 38-55. https://doi.org/10.1016/j.jdeveco.2016.02.003

Previous studies imply that a positive regional fiscal shock, such as a resource boom, strengthens the desire for separation. In this paper we present a new and opposite perspective. We construct a model of endogenous fiscal decentralization that bui... Read More

The natural resource curse and fiscal decentralization (2015)
Journal Article
Pérez-Sebastián, F., & Raveh, O. (2016). The natural resource curse and fiscal decentralization. American journal of agricultural economics, 98(1), 212-230. https://doi.org/10.1093/ajae/aav051

© 2015 The Author. Natural resource abundance is a blessing for some countries, but a curse for others. We show that differences across countries in the degree of fiscal decentralization can contribute to this divergent outcome. Using a large panel o... Read More

Convergence in a dynamic Heckscher–Ohlin model with land (2015)
Journal Article
Guilló, M. D., & Pérez-Sebastián, F. (2015). Convergence in a dynamic Heckscher–Ohlin model with land. Review of development economics, 19(3), 725-734. https://doi.org/10.1111/rode.12158

Convergence among nations that share the same preferences and technologies is a key result of the closed-economy neoclassical growth framework that has received substantial support in the data. However, Heckscher–Ohlin versions of the two-sector neoc... Read More

Neoclassical growth and the natural resource curse puzzle (2015)
Journal Article
Guilló, M. D., & Pérez-Sebastián, F. (2015). Neoclassical growth and the natural resource curse puzzle. Journal of international economics, 97(2), (423-435). doi:10.1016/j.jinteco.2015.06.002. ISSN 0022-1996

We advance a novel mechanism that helps to explain the puzzling evidence on the natural resource curse. The new channel arises in a standard dynamic Heckscher-Ohlin model composed of small-open economies that take international output prices as given... Read More

Market failure, government inefficiency, and optimal R&D policy (2015)
Journal Article
Perez-Sebastian, F. (2015). Market failure, government inefficiency, and optimal R&D policy. Economics letters, 128, (43-47). doi:10.1016/j.econlet.2015.01.012. ISSN 0165-1765

This paper presents a growth model that can explain the coexistence of intellectual property rights and R&D subsidies as a response to the presence of both market and government failures. The framework can also generate the observed positive correlat... Read More

Health cycles and health transitions (2014)
Journal Article
Chakraborty, S., Papageorgiou, C., & Perez Sebastian, F. (2016). Health cycles and health transitions. Macroeconomic dynamics, 20(1), 189-213. https://doi.org/10.1017/S1365100514000297

We study the dynamics of poverty and health in a model of endogenous growth and rational health behavior. Population health depends on the prevalence of infectious diseases that can be avoided through costly prevention. The incentive to do so comes f... Read More

A unified theory of structural change (2011)
Journal Article
Dolores Guilló, M., Papageorgiou, C., & Pérez-Sebastián, F. (2011). A unified theory of structural change. Journal of Economic Dynamics and Control, 35(9), 1393-1404. doi:10.1016/j.jedc.2011.05.004

This paper uses dynamic general equilibrium and computational methods, inspired by the multi-sector growth model structure in Stephen Turnovsky's work, to develop a theory that unifies two of the traditional explanations of structural change: sector-... Read More

Diseases, infection dynamics, and development (2010)
Journal Article
Chakraborty, S., Papageorgiou, C., & Pérez Sebastián, F. (2010). Diseases, infection dynamics, and development. Journal of Monetary Economics, 57(7), (859-872). doi:10.1016/j.jmoneco.2010.08.004. ISSN 0304-3932

The relationship between health and development is a subject of ongoing debate. This paper contributes to the debate by proposing a general equilibrium theory of infectious disease transmission, prevention investment, and rational behavior. Diseases... Read More

Sovereign risk, FDI spillovers, and growth (2008)
Journal Article
Sebastián, F. P., Maliar, L., & Maliar, S. (2008). Sovereign risk, FDI spillovers, and growth. Review of International Economics, 16(3), 463-477. doi:10.1111/j.1467-9396.2007.00718.x

This paper studies the effect of sovereign risk on capital flows from rich to poor nations in the context of a two-country model, where Foreign Direct Investment (FDI) creates positive externalities in domestic production. We show that if externaliti... Read More

Patents, R&D and lag effects: evidence from flexible methods for count panel data on manufacturing firms (2008)
Journal Article
Gurmu, S., & Pérez-Sebastián, F. (2008). Patents, R&D and lag effects: evidence from flexible methods for count panel data on manufacturing firms. Empirical economics, 35(3), (507-526). doi:10.1007/s00181-007-0176-8. ISSN 0377-7332

This paper investigates the relationship between patents and research and development expenditures using new longitudinal patent data at the firm level for the U.S. manufacturing sector from 1982 to 1992. The paper also develops a new class of count... Read More