Influencing the debate about international economies
Associate Professor Julián P. Díaz has spent more than 15 years conducting research in international trade and macroeconomics that has influenced policy and positioned him as an expert in the field.
Since 2008, he has published a dozen articles analyzing the effects of economic policy across Central Europe and the Americas, ranging from trade liberalization to the dollarization of nations, which is the conversion of currency to the U.S. dollar. He brings this depth of research to students in the Quinlan School of Business, where he teaches courses in macroeconomics and international economics.
Research close to home
Among his most notable research is a chapter on his home country of Ecuador in "A Monetary and Fiscal History of Latin America," a comprehensive collection of research by leading economists invited to participate in a project organized by the University of Chicago.
Díaz analyzed decisions by Ecuadorian policymakers, including one to dollarize the country in 2000 in an attempt to reduce out-of-control inflation. Dollarization has become a hot topic more recently due to the proposal of Argentina’s President Javier Milei to dollarize his country.
"Dollarizing Ecuador was a very radical decision," Díaz said. "While many political leaders in Ecuador and Argentina believe dollarization is enough to conquer inflation, we argue that dollarization needs to be complemented with comprehensive economic reforms to make it sustainable."
Díaz collaborated directly with former ministers of finance and central bankers on the research.
"Writing this piece was a really nice experience because I was able to understand what people were doing at the time," Diaz said. "In retrospect it's easy to say, 'Hey, you should have done this', but maybe at that time they didn't have a lot of options."
Understanding inflation
Today, Díaz is researching the impact of inflation on U.S. households of different levels of wealth. With high inflation in the United States and income inequality at higher rates than similarly developed countries, his research comes at a particularly interesting time.
"Understanding how inflation affects different types of households, and in particular those with the lowest levels of income, is of utmost importance, since it can serve to inform policymakers on how to alleviate its undesirable consequences," Díaz said.
Sign of the times
In January 2023, Díaz was quoted in the New York Times as Ecuador made the controversial decision to expand drilling in the Amazon rainforest. In the article, Díaz explains how the country's decision not to drill for oil can come with the unintended consequence of having the nation's debt rise.
The quote shows the extent of his reputation as an economics expert, particularly on Ecuador and Latin America. Díaz says he was excited to have contributed to the article.
"I cannot lie, it was nice to have been featured in the New York Times," Díaz said.
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