Diego Huerta

Diego Huerta

Assistant Professor, University of Chile

Biography

I’m an Assistant Professor in the Department of Economics at the University of Chile. I’m a macroeconomist with an interest in political economy. I work with heterogeneous agent models to understand the joint determination of inequality, public policies, and macroeconomic outcomes.

I received a Ph.D. in Economics from Northwestern University in 2024.

Interests

  • Macroeconomics
  • Political Economy

Education

  • PhD in Economics, 2019-2024

    Northwestern University

  • MS in Economics, 2020

    Northwestern University

  • MS in Economics, 2014

    Universidad de Chile

  • BA in Industrial Engineering, 2014

    Universidad de Chile

Working Papers

(feedback is welcome!)

Work in Progress

Welfare Analysis: Unraveling the Role of Transition Dynamics in Heterogeneous Agent Models

Joint with Matias Bayas-Erazo

Heterogeneous-agent models have become a popular tool for evaluating the welfare effects of policy changes. Due to computational challenges, the conventional approach has often overlooked the importance of transition dynamics for welfare analysis and has relied on the comparison of steady states. In this paper, we propose a tractable model with heterogeneous agents and idiosyncratic risk that allows for an analytical study of the welfare implications of policy changes. Based on this model, we propose a simple rule for choosing the length of the transition between two steady states. We show that the rule performs well in quantitative heterogeneous-agent models and establish general computational guidelines for computing transitional dynamics in this class of models.

Publications

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