Mauricio Torres Ferro

Mauricio Torres Ferro

PhD Candidate in Economics

University of Western Ontario

Welcome! I am a PhD Candidate in Economics at the University of Western Ontario. My research focuses on macroeconomics with heterogeneous agents and monetary policy.

I will be on the 2022/2023 job market.

Download my CV .

  • Macroeconomics.
  • Monetary Economics
  • PhD in Economics, Expected 2023

    University of Western Ontario (UWO)

  • MA in Economic Theory

    Instituto Tecnológico Autónomo de México (ITAM)

  • BA in Economics

    Instituto Tecnológico Autónomo de México (ITAM)

Working Papers

Risk Sharing and Illiquid Assets
This paper studies how asset market illiquidity affects risk-sharing among asset holders. It is typically assumed that lower asset re-salability constrains those agents who need to sell the asset to smooth negative income shocks. However, a fall in liquidity amounts to a negative supply shock in the asset market, which creates excess demand for private financial claims. The asset price, in turn, must rise to equilibrate supply and demand. This response would leave the budget constraint for sellers of the assets unaffected, with no effect on consumption. I build a model where assets are traded subject to search and matching frictions with two types of agents, large households and financial intermediaries. Members of a typical household receive an idiosyncratic endowment shock, those who receive a high endowment participate in the market as buyers of the asset. In contrast, those who receive a low endowment are sellers. The matching technology is owned by financial intermediaries, who process the buy-sell claims at some cost. The transaction price is determined as the solution to a bargaining problem between buyers and sellers. Matching efficiency in this market endogenously determines the degree of asset illiquidity. It is shown that the combination of lower liquidity, along with the pricing mechanism derived from the bargaining problem, tightens the budget constraint for the members that receive the low endowment, who are less able to finance consumption. Consequently, the consumption wedge between household members increases, deviating from perfect risk sharing.

In Progress

  • Money Demand during COVID-19
  • Consumption in College vs. Post-College, joint with Lance Lochner