Enrique Mendoza

Short Vitae

Mendoza, Enrique Gabriel
Born 1963, Mexico City, Mexico

Current affiliations:
Prof. Econ., Univ. of Maryland, College Park, MD, USA, 2002-;
Research Associate, NBER, Cambridge, MA, USA, 1997-;
Visiting scholar, Res. Dept, IMF, Sept. 09-;

Previous positions:
Visiting scholar, Int. Fin. Div., Board of Govs. of the Fed. Res. System
Resident Scholar, Res. Dept, IMF, Sept. 05-Aug. 07;
Prof. Econ., Duke Univ., 2001-02.
Senior Economist, Int. Fin. Div., Board of Govs. of the Fed. Res. System, 1994-97;
Senior Economist, Economist, Res. Dept., IMF, 1989-97;

Degrees
PhD Univ. of Western Ont., London, Canada, 1989; MA Univ. of Western Ont., London, Canada, 1986; Hons. BA, Anahuac Univ., Mexico City, 1985.

Editorial duties
Assoc. editor, J Int E., 2008-; Co-editor, J Int E., 2002-2007; Ed. Board AER 2001-2006; Assoc. editor, ITPF 1998-2004; Ed. Council, Economia Mexicana, 2000-;

Principal fields of interest with JEL codes
F4, Macroeconomic Aspects of Int. Trade and Finance; F3 Int. Finance; E0, Macroeconomics and Monetary Economics: General

Publications
1. ‘Real Business Cycles in a Small Open Economy’, AER, 81, Sept. 1991; 2. ‘Capital Controls and the Dynamic Gains from Trade in a Business Cycle Model of a Small Open Economy’, IMF Staff Papers, 38, Sept. 1991; 3. ‘Robustness of Macroeconomic Indicators of Capital Mobility’ in Capital Mobility: The Impact on Consumption, Investment and Growth, ed. by L. Leiderman and A. Razin, (Cambridge Univ. Press, 1993); 4. ‘Effective Tax Rates in Macroeconomics: Cross Country Estimates of Tax Rates on Factor Incomes and Consumption’ (with A Razin and L Tesar), JME, 34, Dec. 1994; 5. ‘The Balassa-Samuelson Model: A General Equilibrium Appraisal’, Review of International Economics, 1, Oct. 1994, 6. ’The Terms of Trade, the Real Exchange Rate and Economic Fluctuations’, Int ER, 36, Feb. 1995; 7.‘Petty Crime, Cruel Punishment: Lessons from the Mexican Debacle’ (with G. Calvo) AER, May 1996; 8. ‘Mexico's Balance of Payments Crisis: A Chronicle of a Death Foretold’ (with G Calvo), J Int E, 41, Nov. 1996; 9. ‘On the Ineffectiveness of Tax Policy in Altering Long-run Growth: Harberger's Superneutrality Conjecture’ (with G Milesi-Ferretti), J Pub E, 66, Oct. 1997; 10. ‘Terms-of-Trade Uncertainty and Economic Growth’, JDE, 54, Dec. 1997; 11. ‘The International Ramifications of Tax Reforms: Supply Side Economics in a Global Economy’ (with L Tesar), AER, 88, March 1998; 12. ‘Empirical Puzzles of Chilean Stabilization Policy’ (with G Calvo) in Chile: Recent Policy Lessons and Emerging Challenges, ed. by G. Perry and D Leipziger (World Bank, 1999); 13. ‘Rational Contagion and the Globalization of Securities Markets’ (with G Calvo), J Int E, 51, June 2000; 14. ‘Capital Markets Crises and Economic Collapse in Emerging Markets: An Informational Frictions Approach’ (with G Calvo), AER, 90, May, 2000; 15. ‘The Benefits of Dollarization when Stabilization Policy Lacks Credibility and Financial Markets are Imperfect’, JMCB, 33, May 2001; 16. ‘Devaluation Risk and the Business Cycle Implications of Exchange Rate Management’ (with M Uribe), Car.-Roch. Conf. Series on Pub. Policy, 53, 2001; 17. ‘The Business Cycles of Balance-of-Payments Crises: A Revision of A Mundellian Framework’ (with M Uribe) in Money, Capital Mobility and Trade: Essays in Honor of Robert A. Mundell, ed. by G. Calvo, R. Dornbusch and M. Obstfeld (MIT Press, 2001); 18. ‘Credit, Prices and Crashes: Business Cycles with a Sudden Stop’ in Preventing Currency Crises in Emerging Markets ed. by S. Edwards and J. Frankel, (Univ. of Chicago Press, 2002); 19. ‘The International Macroeconomics of Taxation and the Case Against European Tax Harmonization’ in Economic Policy in the International Economy, ed. by E. Helpman and E. Sadka (Cambridge Univ. Press, 2002); 20. ‘Margin Calls, Trading Costs, and Asset Prices in Emerging Markets: The Financial Mechanics of the Sudden Stops Phenomenon’ (with K Smith), JIE, 2006 forthcoming. 21. ‘Real Exchange Rate Volatility and the Price of Nontradables in Sudden-Stop-Prone Economies,’ Economia, 2005; 22. ‘Are Asset Price Guarantees Useful for Preventing Sudden Stops?: A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff’ (with C. B. Durdu), JIE 2006, forthcoming; 23. ‘Lessons from the Debt-Deflation Theory of Sudden Stops, AER, May 2006; 24. ‘Precautionary Demand for Foreign Assets in Emerging Economies: An Assessment of the New Mercantilism,’ (with C. B. Durdu & M. Terrones), JDE, 2009; 24. ‘Financial Integration, Financial Development and Global Imbalances,’ JPE, 2009.

Statement of contributions:
My work studies macroeconomic implications of international capital flows with emphasis on four research lines. The first line developed business cycle models for small open economies with incomplete insurance markets. This research showed that productivity and terms-of-trade shocks are important for explaining observed fluctuations in domestic aggregates and the current account, and produced the puzzling result that gains of foreign asset trading are small. Further work showed that indicators of capital mobility, like saving-investment correlations, are misleading and argued that terms-of- trade volatility helps explain cross-country growth differentials. The second line examined policy reforms. L. Tesar and I demonstrated that global externalities of tax reforms are large and provide strong incentives for tax competition. Work with G. Milesi showed that tax reforms have negligible growth effects in a wide class of endogenous growth models. The third line was motivated by the 1990s emerging markets crises. G. Calvo and I argued that the observed financial vulnerability, sudden reversals of capital inflows and contagion of the 1994 Mexican crisis were new phenomena inconsistent with conventional currency crises models. We developed a framework that uses informational frictions to explain them. M. Uribe and I showed that unhedged devaluation risk (or weak government credibility) explains observed business cycle patterns of pre-crises periods of exchange rate management. The fourth line and focus of my current work deals with the interaction between financial crises, financial development and the globalization of capital markets. One project in this area focuses on sudden reversals of capital inflows and massive collapses in economic activity in emerging economies (“Sudden Stops”) that result from the existence of frictions like liquidity requirements, collateral constraints and trading costs. A controversial policy implication is that emerging economies can lower exposure to Sudden Stops by replacing national currencies with hard currencies. A second project re-examines assessments of fiscal solvency and public debt sustainability taking into account the inability of governments to issue state contingent debt instruments and the large, non-insurable risks that they face. A third project explains the large and growing U.S. external imbalances and the large accumulation of reserves in emerging economies as a result of financial globalization amongst countries at different stages of domestic financial development.