Browsing by Author "Contreras Mualin, Gabriela Alejandra"

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    Essays on financial aspects of business cycles
    (2023) Contreras Mualin, Gabriela Alejandra; Kohn, David; Pontificia Universidad Católica de Chile. Instituto de Economía
    The first chapter explores how countries’ specialization in various commodities shapes the response of commodity exporters to global financial risk. Hard commodities, such as energy and metals, experience more substantial price declines than soft commodities. A panel SVAR analysis reveals that following an unexpected increase in global financial risk, hard commodity exporters experience a more significant decline in their commodity terms of trade, more than twice the increase in their sovereign spreads, and a larger drop in consumption and output. Motivated by this evidence, I build a small open economy model that captures the effects of global risk shocks on country spreads and how these effects depend on the type of commodities an economy exports. The model implications suggest that global risk shocks are primarily transmitted through commodity prices and that hard commodity exporters are hit harder not solely due to the composition of their exports. The second chapter investigates the interplay between firm size, cyclicality, and financial frictions using extensive Chilean firm-level data from 2008 to 2019. An innovative aspect of the empirical approach involves controlling for a new measure of firm productivity. The findings reveal substantial heterogeneity in how firms respond to aggregate economic fluctuations. When holding productivity constant, small firms display a more pronounced reaction in terms of investment, hiring, and sales to positive changes in GDP compared to larger firms. However, the link between cyclicality and firm size diminishes when considering firms with similar productivity and financial conditions, indicating that financial constraints play a crucial role in explaining the diverse responses across firms to aggregate economic fluctuations. These results support a financial accelerator mechanism, suggesting that, among equally productive firms, the higher cyclicality of smaller Chilean firms compared to larger ones is linked to differences in access to financing.