Research

My research mostly focuses on applied economics. My main fields of interest are resource economics and applied macro.

PUBLICATIONS

Estimating Behavioral Inattention. Journal of Economic Behavior and Organization. 2025. (with Jonathan Benchimol and Lahcen Bounader)  
(Published Version)

Bounded rationality and limited attention play a central role in shaping expectation formation and macroeconomic dynamics, yet measuring these behavioral forces empirically remains a challenge. This paper presents the first cross-country estimation of both micro- and macro-level attention parameters using a structurally identified behavioral New Keynesian model. Leveraging Bayesian estimation techniques and harmonized data from 22 OECD countries between 1996 and 2019, the analysis ensures robust parameter identification and reveals considerable heterogeneity in inattention across countries. Estimates of cognitive discounting range from 0.76 to 0.98, with higher values indicating greater attention. Three key empirical patterns emerge: (1) attention parameters are positively correlated with macroeconomic volatility, aligning with rational inattention theory; (2) surprise movements in major macroeconomic variables and online information-seeking behavior significantly affect how attention is allocated; and (3) institutional quality—especially government effectiveness—is positively associated with attention levels. These results suggest that attention operates as both a behavioral and structural phenomenon, influenced by institutional and economic contexts. The findings provide a novel empirical basis for calibrating country-specific macroeconomic models and carry important implications for the formulation and transmission of monetary policy under bounded rationality, indicating that policy effectiveness may vary systematically with the broader macroeconomic environment.

WORKING PAPERS

Industrial Activity, State Capacity, and Deforestation: Evidence from Brazil (with Daniel Da Mata and Edson Severnini)
(NBER Working Paper)
(Policy Coverage: Cato Institute)

Does industrial activity drive deforestation and land degradation, and can limited state capacity be overcome to decouple economic growth from environmental harm? We examine these questions in the context of slaughterhouse plant openings in Brazil from 1994 to 2019. Guided by a simple conceptual framework and using a staggered difference-in-differences approach, we show that plant openings increase livestock production while reducing forest cover and degrading pastureland. However, following the introduction of legally enforceable, incentive-compatible agreements between slaughterhouses and federal prosecutors - which penalize purchases of livestock from illegally deforested areas but act as a green certification mechanism---plant openings increase productivity without driving deforestation. Our findings suggest that tying firm performance to environmental goals through market-aligned legal mechanisms can generate economic and environmental gains at low cost to the government.

Commodity Booms, Emissions and Climate Mitigation Policies (with Daniel Da Mata)  
(Working Paper Version)
(Previously circulated as: Commodity Booms and The Environment)

This paper examines how production responses to agricultural commodity booms affect greenhouse gas emissions and the take-up of climate mitigation policies. Using a shift-share approach, we find that Brazilian localities more exposed to booms exhibit increased emissions due to agricultural expansion and land allocation. While booms also lead to emissions-reducing responses like higher output per area, the net effect is an increase in emissions. Moreover, we show that commodity booms lead to lower adoption of an emission-curbing policy promoting sustainable farming practices. Our findings suggest that positive economic shocks may undermine climate mitigation efforts by reducing climate policy uptake.

Technological Progress and Climate Change: Evidence from the Agricultural Sector (with  Daniel Da Mata and Thiago Lobo)  
(Working Paper Version)

We investigate whether technological progress can decouple output growth from greenhouse gas emissions. Using a dynamic difference-in-differences design, we show that producers in Brazilian localities with high suitability for genetically modified seeds increase crop output. This increased crop output is not accompanied by deforestation, fires, or more livestock counts---three major emitters. Our findings show that the emissions did not increase in the agricultural sector, such that the sector presents lower emissions per output. The effects are not limited to agriculture; manufacturing-related emissions are affected and increase. Although the combined emissions from agriculture and manufacturing increased following the introduction of genetically modified seeds, the overall emissions growth was smaller in magnitude compared to output growth. Our findings indicate that technological innovations can affect emissions of the targeted sector and have meaningful spillovers to other economic sectors.

Monetary and Fiscal Dominance under Bounded Rationality: Evidence from Brazil (Submitted)
(Working Paper Version)
(Previously circulated as: A Behavioral New Keynesian Model for Brazil)

This paper asks how bounded rationality reshapes the classic comparison between monetary and fiscal dominance in a small open economy. I estimate a behavioral New Keynesian DSGE model with cognitive discounting, incomplete exchange-rate pass-through, and a debt-sensitive policy rule using Brazil as a benchmark given its recurrent monetary–fiscal tensions and their broader relevance for comparable economies. The data support meaningful attenuation of forward-looking behavior on both the household and the firm side. Counterfactual regime exercises reveal a sharp asymmetry: bounded rationality enlarges the determinacy region and diminishes macroeconomic volatility under monetary dominance, but shrinks determinacy and amplifies debt-centered adjustment under fiscal dominance. The effectiveness of a given policy mix therefore depends on how private agents process future policy. The mechanism is not Brazil-specific: economies approaching the active-fiscal border should expect the same pattern in milder form.

Adapting to Drought: Agricultural Reallocation, Land Use, and Emissions in Brazil (Submitted)
(Working Paper Version)
(Previously circulated as: Climate Shocks, Agricultural Specialization and Greenhouse Gas Emissions)

This paper examines how producers adapt to drought and whether those responses alter the land-use and emissions footprint of agriculture. I combine a municipality-level panel for Brazil on weather, crops, livestock, irrigation, land cover, pasture quality, and greenhouse gas emissions with a Roy-type model of land-use choice. Weather shocks are measured as municipality-specific precipitation deviations and estimated with rich regional-by-year controls. Drought induces coordinated agricultural reallocation: producers shift toward more drought-resilient crops and livestock, pasture quality deteriorates, and land use adjusts along extensive and intensive margins. These responses can reduce native forest cover and increase land-use emissions. Yet the effect is not mechanical. Where adaptation capital, agricultural calendars, and previously converted land allow producers to absorb drought within the existing footprint, adjustment occurs without new forest conversion. The results show that agricultural adaptation can either reinforce or limit climate damages, depending on the margin through which producers respond.

Deforestation Futures in South American Biomes under SSP Trade and Climate Scenarios (Submitted) (with  Jesus Mercado and Tiago Couto)
(Working Paper Version)

Changes in international market access reshape agricultural incentives, but their consequences for native vegetation depend on adjustments across trading partners, competing land uses, and production locations. We examine how trade integration and tariff rivalry affect land conversion in South America under contrasting socioeconomic and climate conditions. A recursive dynamic computable general equilibrium model is linked to a spatial model of conversion in the Amazon, Cerrado, Gran Chaco, and Pantanal through 2040. We compare European Union--Mercosur tariff preferences alone and in combination with tariff rivalry involving China and the United States. Total conversion reaches about 398,000 km2 under SSP1 and 557,000 km2 under SSP3, but the trade-induced increment is larger under SSP1, at 14,200 km2 compared with 6,600 km2 under SSP3. In SSP1, 88% of the trade increment falls in the Amazon and Cerrado. The agreement alone produces a similar concentration under SSP3, while rivalry shifts part of the effect toward the Chaco and reduces additional conversion by about 3,200 km2. Trade also accelerates conversion on land that would otherwise be converted later, with a median shift of one year. Growing land demand is accommodated mainly through expansion of aggregate supply, while trade primarily changes which activities expand and where conversion occurs. These results show that bilateral agreements cannot be evaluated independently of the wider trade environment and that long-run assessments may miss near-term conversion accelerated by policy changes.

POLICY PAPERS

Transforming Brazilian Cattle Ranching: Enhancing Productivity and Mitigating Methane Emissions. Rio de Janeiro: Climate Policy Initiative, 2026. (with Gabriela Zangiski)

SELECTED WORK IN PROGRESS

The Causes of Agricultural Fires: Evidence from Sugar-Cane Production in Brazil

Land Reform and Land Use: Evidence from Brazil (with  Thiago Lobo) 

Climate Change and Education: Impacts on Brazilian Schools (with R. Pieri)

Fiscal Policy Under Bounded Rationality (with Jonathan Benchimol and Lahcen Bounader)

OTHER PUBLICATIONS

Refereed Articles (in Brazilian Journals)

Fatores que Influenciam o Preço da Energia Elétrica no Brasil: uma abordagem hedônica. Revista Brasileira de Energia. 2016. (with Lilian Lima) - link

Book Chapters

Chapter 16 - Behavioral Aspects of the Coffee Consumer in Different Countries: The Case of Brazil. In: Coffee Consumption and Industry Strategies in Brazil. 2019. (with several co-authors) - link