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Research Economist

Eduardo Cavallo

Eduardo Cavallo is a Lead Economist at the Research Department of the Inter-American Development Bank (IDB) in Washington DC. Prior to joining the IDB, Eduardo was a Vice-President and Senior Latin American Economist for Goldman Sachs in New York. Eduardo had already worked at the IDB as a Research Economist between 2006 and 2010. Before that he served as a research fellow at the Center for International Development (CID), a visiting scholar at the Federal Reserve Bank of Atlanta, and a member of the faculty at the Kennedy School of Government's Summer Program. In Argentina he co-founded Fundación Grupo Innova.

Eduardo’s research interests are in the fields of international finance and macroeconomics with a focus on Latin America. He has published in several academic journals, and is the co-editor of the books Saving for Development: how Latin America and the Caribbean can save more and better(Palgrave, 2016) and Dealing with an International Credit Crunch: Policy Responses to Sudden Stops in Latin America(IDB, 2009). He holds a Ph.D. in Public Policy and an MPP from Harvard University, and a B.A. in Economics from Universidad de San Andres (UdeSA) in Buenos Aires, Argentina.

Published Papers

Natural Disasters

The Welfare Gains from Macro-Insurance Against Natural Disasters. Co-authored with Eduardo Borensztein and Olivier Jeanne. Journal of Development Economics (forthcoming).

Price and Supply Disruptions during Natural Disasters. Co-authored with Alberto Cavallo and Roberto Rigobon. Review of Income and Wealth, Volume 60, Issue S2, November 2014, Pages: S449–S471

Catastrophic Natural Disasters and Economic Growth. Co-authored with Sebastián Galiani, Ilan Noy and Juan Pantano. The Review of Economics and Statistics, December 2013, Vol. 95, No. 5, Pages 1549-1561.

Estimating the Direct Economic Damages of the Earthquake in Haiti. Coauthored with Andrew Powell and Oscar Becerra. The Economic Journal, Volume 120, Issue 546, pages F298-F312.

Natural Disasters and the Economy — A Survey, Coauthored with Ilan Noy. International Review of Environmental and Resource Economics: Vol. 5:No 1, pp 63-102, 2011.

The Aftermath of Natural Disasters: Beyond Destruction. Co-authored with Ilan Noy. CESifo Forum 2/2010, pages 25-35.

Debt Sustainability under Catastrophic Risk: The Case for Government Budget Insurance. Coauthored with Eduardo Borensztein and Patricio Valenzuela. Risk Management and Insurance Review, 2009, Vol. 12, No. 2, pages 273-294.

Foreign Aid in the Aftermath of Large Natural Disasters. Co-authored with Ilan Noy and Oscar Becerra. Review of Development Economics, 18(3), 445-460, 2014.

Where is the Money? Post-Disaster Foreign Aid Flows . Co-authored with Oscar Becerra and Ilan Noy. Environment and Development Economics, volume 20, issue 05, pp.561-586. ( web appendix ).

International Finance / Macro

Does Openness to Trade Make Countries More Vulnerable to External Crises, or Less? Using Gravity to Establish Causality. Coauthored with Jeffrey A. Frankel. Journal of International Money and Finance, Volume 27, Issue 8, December 2008, pages 1430-1452.

Openness to Trade and Output Volatility: a Reassessment. Economía (Journal of LACEA), Volume 9, Number 1, Fall 2008, pages 105-152.

Financial Development and TFP Growth: Cross Country and Industry Level Evidence. Coauthored with Francisco Arizala and Arturo Galindo. Applied Financial Economics, Vol 23 (6), pp. 443-448 (2013). Research Department Working Paper No. WP-682.

The Determinants of Corporate Spreads in Emerging Markets: An Option-Adjusted Spreads Analysis. Coauthored with Patricio Valenzuela. International Journal of Finance & Economics, Vol. 15, Issue 1, January 2010, pages 59–74.

Exchange Rate Policy and Liability Dollarization: What Does the Data Reveal About Causality. Coauthored with Pelin Berkmen. Review of International Economics, Volume 18, Issue 5, November 2010.

Do Credit Rating Agencies Add Value? Evidence from the Sovereign Rating Business. Co-authored with Andrew Powell and Roberto Rigobon. International Journal of Finance & Economics, 18: 240-265 (2013).

Public Investment in Developing Countries: A Blessing or a Curse? Coauthored with Christian Daude. Journal of Comparative Economics, Volume 39, Issue 1, March 2011.

The Role of Relative Price Volatility in the Efficiency of Investment Allocation. Co-authored with Alejandro Izquierdo, Arturo Galindo and John Jairo Leon. Journal of International Money and Finance, Volume 33 (2013) 1-18.

Coping with Financial Crises: Latin American Answers to European Questions. Co-authored with Eduardo Fernández-Arias. Revue internationale de politique de développement [En ligne], 4.1, 2013. URL:; DOI : 10.4000/poldev.1252 Also available as IDB Policy Brief, No. IDB-PB-176. Inter-American Development Bank.

Is the Euro-zone on the Mend? Latin American Examples to Analyze the Euro Question. Co-authored with Eduardo Fernández-Arias and Andrew Powell. Journal of Banking and Finance. Volume 47, October 2014, Pages 243–257. Previous version available through IDB-WP-525.

A New Taxonomy of Sudden Stops: Which Sudden Stops should countries be most concerned about?, joint with Andrew Powell, Pilar Tavella and Mathieu Pedemonte. Journal of International Money and Finance, Volume 51 (2015) 47-70. Previous version available through IDB-WP-430.

Precautionary Strategies and Household Saving, joint with Joshua Aizenman and Ilan Noy. Open Economies Review,  November 2015, Volume 26, Issue 5, pp 911-939. Digital Object Identifier(DOI) 10.1007/s11079-015-9351-2. Previous version available through NBER WP# 21019.

What is the relationship between national saving and investment in Latin America and the Caribbean . w/ Mathieu Pedemonte. Economía (Journal of LACEA), volume 16, issue 2, pp29-53, Spring 2016.

Is Business Saving Really None of Our Business?, joint with Ricardo Bebczuk. Applied Economics, volume 48, issue 24, 2016.

Political Economy

The Politics of Financial Development: The Role of Interest Groups and Government Capabilities. Coauthored with Carlos Scartascini and Oscar Becerra. Journal of Banking and Finance, Volume 36, Issue 3, March 2012, pages 626-643.

Are Crises Good for Long Term Growth? The Role of Political Insitutions. Coauthored with Alberto Cavallo. Journal of Macroeconomics 32 (3), September 2010, pages 838-857.

Argentina 2002: when the attempt to set the right prices destroyed property rights. Coauthored with Domingo F. Cavallo. (September 2002). Techniques Financières et Développement N°70, mars 2003.

Books and Chapters

"Saving for Development: How Latin America and the Caribbean can Save More and Better," Development in the America's (DIA) 2016. Eduardo Cavallo and Tomas Serebrisky, Editors.

"Dealing with an International Credit Crunch: Policy Responses to Sudden Stops," Eduardo Cavallo and Alejandro Izquierdo, 2009. Washington, DC: Inter-American Development Bank.

"Why Credit Matters for Productivity," co-authored with Arturo Galindo and Alejandro Izquierdo. In The Age of Productivity: Transforming Economies from the Bottom-Up, Carmen Pagés, Editor, Chap. 6, pp. 123-151. Washington, DC: 2010 IDB Report "Development in the Americas". Palgrave, Macmillan.

Working Papers

"Can Countries Rely on Foreign Saving for Investment and Economic Development?," co-authored with Barry Eichengreen and Ugo Panizza. HEID Economics Working Papers, 07-2016.

"Gone with the Wind: Demographic Transitions and Domestic Saving," co-authored with Gabriel Sánchez and Patricio Valenzuela. IDB Working Paper No. 688.

"The Mystery of Saving in Latin America", co-authored with Oscar Becerra and Ilan Noy. IDB Working Paper No. 615.

"Quid Pro Quo: sudden stops and commitment" Co-authored with Andrés Velasco and Roberto Chang.

"Debt Sustainability Fan Charts: Combining Multivariate Regression Analysis and External Forecasts." Draft for Comments. Coauthored with Francisco Arizala, Christian Castro and Andrew Powell.

Op-Eds & Press

Foreign savings: No gain, some pain,, 8/8/2016.

Fixing the Saving Problem in Latin America and the Caribbean,, 7/29/16.

El Ahorro como Política de Estado, CNN Chile, 14 de junio de 2016.

La economía de desastres naturales: Posibles escenarios financieros tras un terremoto, Ekos Negocios (Ecuador), 14 de junio de 2016.

What Does Saving Have to Do with Resilience to Natural Disasters?, IDEAS que Cuentan, 4/1/2016.

¿Qué tiene que ver el ahorro con la capacidad de recuperarse tras un desastre natural?, IDEAS que Cuentan, 4/1/2016.

Fuerza Chile , IDEAS que Cuentan, 9/18/2015.

Foreign Aid for Disasters: Never Enough, IDEAS que Cuentan, 4/30/2015.

¿Por que ahorramos?, IDEAS que Cuentan. 04/09/2015.

Precautionary strategies and household saving ,, 04/01/2015.

Tango Lessons for Greece?, IDEAS que Cuentan. 2/12/2015.

A new taxonomy of Sudden Stops: Which Sudden Stops should countries be most concerned about?,, 4/3/2013.

Save More to Improve Infraestructure in Latin America and the Caribbean,, 4/3/2013.

Ahorrar mas para invertir en infraestructura,, 3/22/2013: video

Atención con los Desastres Naturales...,, 1/21/23.

Coping with Financial Crises: Latin American Answers to European Questions,, 10/17/2012.

Interview with Radio Fisherton CNN Rosario, Natural Disasters and Growth (in spanish): Audio

Los grupos de interés y las capacidades gubernamentales importan para el desarrollo financiero,, 09/06/2012.

What Matters for Financial Development?,, 05/12/2012.

The Economics of Natural Disasters, IDEA Newsletter, volume 22. July 2010.

Interview with CNN en Español: February 27, 2010 Earthquake in Chile: video

Interview with CNN en Español: January 12, 2010 Earthquake in Haiti: video

Interview with "El Economista", Mexican newspaper (in spanish): "Productividad, amarrada al financiamiento". 07/19/2010.

Debt Management in Latin America: How Safe Is the New Debt Composition? IDB Policy Brief No. IDB-PB-109.

"How Safe is Latin America Debt?",, 02/24/2010.

Interview with "Brasil Economico" (in portuguese): "Dívida da América Latina não é imune a choques externos". 03/07/2010. Also available in the printed version.

Dealing with an International Credit Crunch: Lessons from Latin America, RGE Global Monitor, April 1, 2009. Also in: Dealing with the crisis: Lessons from Latin America,, March 29, 2009. Also in IDEA Newsletter, volume 18. April 2009.

The Case for Optimism amid the Crisis, RGE Global Monitor, Feb 21, 2009.

Do Ratings Matter? RGE Global Monitor. October 21, 2008.

Public Investment in Developing Countries: Blessing or Curse? RGE Global Economic Monitor, Latam Blog. July 02, 2008.

How to Spend $10 billion in Latin America and the Caribbean. RGE Global Economic Monitor, Latam Blog. November 6, 2007.

Getting Ready for the Next Catastrophe. RGE Global Economic Monitor, Latam Blog. August, 29 2007.

The Cost of Financing. RGE Global Economic Monitor, Latam Blog. August, 7 2007.

A Thought on Private Investment. RGE Global Economic Monitor, Latam Blog. July, 25 2007.

Seguro contra la próxima tormenta. El Financiero de Costa Rica, Lun 26 mar, 2007 - Dom 1 abr, 2007.

Promoting Financial Stability. IDEAS Express, IDB, October 2006.

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