Miguel Del Valle

Welfare Effects of Natural Disasters

Local exposure to natural disasters can be substantially more costly than aggregate uncertainty about warming trajectories. Understanding how these events affect both the places they strike and the national economy is therefore central to the public policy debate. We link administrative data on the universe of formal firms in Chile with records of natural disasters to estimate their impact on the economic activity of firms in directly affected locations. We then combine these elasticities with geographically and sectorally disaggregated economic accounts for Chile in a quantitative spatial general equilibrium model in which local shocks propagate across locations and sectors through domestic trade, input-output linkages, and labor mobility. The framework allows us to quantify the aggregate and distributional welfare effects of natural disasters, separating direct local losses from their propagation to the rest of the economy and identifying the locations and sectors that bear the largest costs.

Port Development in Networks

with Federico Huneeus

Ports are large, long-lived investments whose effects reach far beyond the regions where they are built, because they shape trade costs for the entire economy. We study the optimal size and location of ports in an interconnected economy. We use temporary port disruptions, together with vessel-tracking (AIS) data and customs records, to estimate how shippers substitute across ports and transport modes, the value of time in transit, and how congestion at terminals responds to traffic and installed capacity. We then combine these estimates with geographically and sectorally disaggregated economic accounts for Chile in a quantitative spatial general equilibrium model with production networks and labor mobility, in which trade costs arise endogenously from shippers' choices of transport mode and port. We use the model to evaluate how expanding or relocating port capacity reshapes trade costs, economic activity, and welfare across locations and sectors, and where additional capacity yields the largest gains.

The Geography of Industrial Policy

with Federico Huneeus

Industrial policy has returned to the center of the policy debate, yet its effects are usually measured only on the firms it supports. We study how the effects of industrial policy spread across firms, locations, and sectors, and how much of them reach the national economy. We use administrative data on Chilean firms, together with detailed administrative records on applications to the support programs of Chile's economic development agency, to estimate the effects of public support on the firms that receive it. We then combine these estimates with geographically and sectorally disaggregated economic accounts for Chile in a quantitative spatial general equilibrium model with a rich government sector, in which the effects on supported firms propagate through production networks and labor mobility. This lets us estimate the marginal value of public funds (MVPF) of these programs, accounting for general equilibrium spillovers and their fiscal effects, and identify where public support yields the largest returns.