RICARDO DE LA O
[email protected] http://www.stanford.edu/~delao Department of Economics Stanford University 579 Jane Stanford Way Stanford, CA 94305-6072 (650) 422-9169
EDUCATION
Ph.D. in Economics, Stanford University, Expected Completion: June 2020 DISSERTATION: “The effect of buybacks on capital allocation”
M.A. in Economics, El Colegio de México (Mex), 2012-2014 (Summa cum Laude)
B.S. in Engineering Physics, Tecnológico de Monterrey (Mex), 2002-2006 (with honors)
RESEARCH FIELDS
Macroeconomics, Finance
REFERENCES
Prof. Monika Piazzesi Prof. Martin Schneider Economics Department, Stanford University Economics Department, Stanford University (650) 723-9289 (650) 721-6320 [email protected] [email protected]
Prof. Hanno Lustig Stanford Graduate School of Business (310) 871 6532 [email protected]
RESEARCH
The Effect of Buybacks on Capital Allocation (Job Market Paper)
This paper studies the macroeconomic effects of a 1982 SEC rule that made share buybacks a viable alternative to dividends for paying out funds to shareholders. I propose a quantitative model of heterogeneous firms with dividend adjustment costs and a manager-shareholder conflict, matched to micro data on US corporations' cash flow statements. The flexibility of buybacks improves welfare by reducing the misallocation of capital. This is not only because investors can more easily shift resources to more productive firms, but also because stock prices become more responsive to productivity and thus help align incentives of managers and shareholders. This "stock price effect" allows the model to not only account for a decline in investment and increase in productivity, but also the increase in corporate cash holdings over the last decades.
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Subjective Cash Flow and Discount Rate Expectations-2nd R&R in Journal of Finance, (with S. Myers)
Why do stock prices vary? Using survey forecasts, we find that cash flow growth expectations explain most movements in the S&P 500 price-dividend and price-earnings ratios, accounting for at least 93% and 63% of their variation. These expectations comove strongly with price ratios, even when price ratios do not predict future cash flow growth. In comparison, return expectations have low volatility and small comovement with price ratios. Short-term, rather than long-term, expectations account for most price ratio variation. We propose an asset pricing model with beliefs about earnings growth reversal that accurately replicates these cash flow growth expectations and dynamics.
Employment Dynamics and Monetary Policy for Emerging Economies under Informality, (with S. McKnight)
This paper investigates the role of labor informality in the propagation of transitory shocks and its implications for interest rate policy in preventing self-fulfilling inflation expectations. We develop a dynamic New Keynesian model where the size of the informal sector reacts to search and matching frictions in the formal sector, which can account for the observed behavior of formal and informal employment in Mexico. We show that informality reduces the volatility of aggregate consumption and employment, but investment volatility increases. While informality amplifies the propagation of demand shocks on inflation, it dampens the response of output, weakening the transmission mechanism of monetary policy to output. For interest-rate feedback rules that react to formal measures of inflation, we find that informality significantly restricts the ability of the Taylor principle to ensure determinacy. However, we show that determinacy can be restored when policy also responds to formal output.
TEACHING EXPERIENCE
2018 Teaching Assistant for Undergraduate Economics: Principles of Economics, by Mark Tendall & John Taylor, Stanford University. Teaching Assistant for Core Graduate Macroeconomics: Econ 211, by Monika Piazzesi and Pete Klenow, Stanford University. 2017 Teaching Assistant for Core Graduate Macroeconomics: Econ 211, by Monika Piazzesi and Pete Klenow, Stanford University. 2016 Teaching Assistant for Undergraduate Intermediate Macroeconomics: Econ 52, by Monika Piazzesi, Stanford University.
RELEVANT POSITIONS
2017-19 Research Assistant for Prof. Pablo Kurlat, Stanford Univesity 2018 Research Assistant for Prof. Juliane Begenau, Stanford Graduate School of Business 2017 Research Assistant for Prof. Kenneth Singleton, Stanford Graduate School of Business 2015-16 Research Assistant for Prof. Paul Milgrom, Stanford University 2012-14 Research Analyst at investment advisory TransEconomics, Mexico 2007-11 Senior On Board Field Geophysicist at Schlumberger, UK & Norway
SEMINARS AND CONFERENCE PRESENTATIONS
2018 Society of Economic Dynamics, with Subjective Cash Flow and Discount Rate Expectations
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2017 Harvard Business School seminar, with Subjective Cash Flow and Discount Rate Expectations 2017 Chicago Initiative in Theory and Empirics, with Subjective Cash Flow and Discount Rate Expectations
SCHOLARSHIPS, HONORS AND AWARDS
2019-20 Gale and Steve Kohlhagen Fellowship in Economics 2018 Macro Finance Modeling Initiative Dissertation Fellowship, Becker Friedman Institute 2014-15 The Alejandro and Lida Zaffaroni Graduate Fellowship 2014 “Josué Sáenz price for M.A. Dissertation” Honored mention 2013-14 BBVA Award to Excellence at Colmex 2012-13 BBVA Award to Excellence at Colmex
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