I am an applied macroeconomist working as a Senior Economist in the International Economic Analysis Department, United States Division at the Bank of Canada. My research focuses on a rage of topics in the fields of international finance, consumption behavior, monetary policy and labour economics employing a diverse set of econometric tools and machine learning techniques applied to multi-source (recorded, survey, historical, text) and multi-dimensional (cross-sectional, panel and time series) data.
Contact details:
234 Wellington St. West
Ottawa, ON K1A 0G9
Canada
Phone:+16137827955
E-mail: BSadaba@bank-banque-canada.ca

BIO
EDUCATION
January 2016 - Rotterdam, The Netherlands
PH.D. ECONOMICS TINBERGEN INSTITUTE - ERASMUS UNIVERSITY
July 12, 2023
Title: Essays on the Empirics of International Financial Markets
Promotor: Prof. Casper De Vries
Supervisor: Dr. Lorenzo Pozzi
September 2011 - Tilburg, The Netherlands
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RESEARCH MASTER ECONOMICS - TILBURG UNIVERSITY
Thesis title: Determinants of Export Taxation
Supervisor: Prof. Jenny Ligthart
September 2009 - Tilburg, The Netherlands
M.SC. ECONOMICS - TILBURG UNIVERSITY
Thesis title: Electricity Network Regulation: the Argentinean reform
Supervisor: Dr. Bert Willems
PROFESSIONAL EXPERIENCE
March 2016 - to date Ottawa, Canada
BANK OF CANADA
Senior Economist - International Economics Department - United States Division
March 2015 - September 2015 Amsterdam, The Netherlands
DANUM ADVISORS
Macroeconomic Analyst
March 2014 - May 2014 Oslo, Norway
NORGES BANK
Ph.D. Intern
September 2006 - August 2008 Buenos Aires, Argentina
September 2026 - June 2028
INTER-AMERICAN DEVELOPMENT BANK
Research Assistant to Project Manager
RESEARCH
Publications
CHARACTERIZING THE SCHOOLING CYCLE (JOINT WITH PROF. SUNCICA VUJIC AND SOFIA MAIER)
Economic Modelling (2024) - Link to IZA WP
This paper examines the cyclical dynamics of school participation decision, using data for 16-24-year-olds attending full-time post-compulsory education in the UK in the period from 1995Q1 to 2019Q4. We find evidence of a highly persistent education cycle, largely explained by the business cycle. Importantly, the response of school participation to the business cycle is time-dependent – counter-cyclical in the period around the Great Financial Crisis and pro-cyclical in other years. We propose two channels as predictors of the cyclicality of schooling – the ability-to-pay for further education and the opportunity-cost of spending time in education rather than at work. We also show that the results are heterogeneous by gender, with female choices being more responsive to changes in aggregate macroeconomic conditions than male choices. Timely policy interventions using regular education as a counter-cyclical tool can help prevent persistent or permanent unemployment in the aftermath of a crisis.
DETECTING SCAPEGOAT EFFECTS IN THE RELATIONSHIP BETWEEN EXCHANGE RATES AND MACROECONOMIC FUNDAMENTALS: A NEW APPROACH (JOINT WITH LORENZO POZZI)
Macroeconomic Dynamics (2020) - Link to BoC WP
This paper presents a new testing method for the scapegoat model of exchange rates. A number of steps are implemented to determine whether macro fundamentals are scapegoats for the evolution of exchange rates. Estimation is conducted using a Bayesian Gibbs sampling approach applied to eight countries (five developed, three emerging) versus the US over the period 2002Q1-2014Q4. The macro fundamentals that we consider are real GDP growth, the inflation rate, the long-run nominal interest rate and the current account to GDP ratio. We calculate the posterior probabilities that these macro fundamentals are scapegoats. For the inflation rate, these probabilities are considerably higher than the imposed prior probabilities of 1/2 in five out of eight countries (in particular, the Anglo-Saxon economies).
ASSESSING THE PREDICTIVE ABILITY OF SOVEREIGN DEFAULT RISK ON EXCHANGE RATES (JOINT WITH PROF. FRANCESCO RAVAZZOLO AND CLAUDIA FORONI)
Journal of International Money and Finance (2018) - Link to BoC WP
This paper explores the predictive ability of interest rate factors and sovereign default risk on exchange rate returns. We investigate the possible pass-through of risk in the sovereign bond markets to currency markets. To this end, we extend the no-predictability random walk model with the level and slope factors of the interest rate yield curve and the default and recovery risk intensities from credit default risk swaps. Existing literature points to common underlying factors driving both the term structure of interest rate and exchange rates. The term structure of interest rate reflects agents expectations about risk. By including a separate measure of default risk we attempt to disentangle the default risk expectations from risk premium measures. We find that the inclusion of these four factors improves in accuracy upon the benchmark model.
Work in progress
CLIMATE CHANGE AND SOCIO-ECONOMIC INEQUALITY IN THE U.S. (WITH TATJANA DAHLHAUS)
We study the effects of climate change on income inequality in the United States. To do so, we characterize climate change in the US and introduce the climate-inequality Vector Autoregression (VAR). Constructing a data set of daily temperatures over 1920-2019 covering the contiguous US, we document that climate change is more than a phenomenon that increases mean temperatures since the whole temperature distribution has shifted asymmetrically with temperatures in lower percentiles increasing at a faster rate than those in higher percentiles for most US states. Using the climate-inequality VAR, we estimate the effects of climate change on income inequality by identifying shocks to temperature distribution characteristics (such as mean and percentiles) via a combination of zero and sign restrictions. We find that the effects of climate change on income inequality not only vary across temperature distribution characteristics but also widely across US states. We find both negative and positive impacts on within-state inequality across the US. There is no strong link between a state’s climate or per capita income and the within-state effects on income inequality considering warming across several temperature percentiles.
RARE DISASTERS AND CONSUMPTION-INCOME EQUILIBRIUM DYNAMICS: EVIDENCE AND THEORY (previously circulated as Macroeconomic disasters and consumption smoothing) (WITH LORENZO POZZI)
Work in progress - Link to previous version
Using annual data for 17 developed economies since 1870, we estimate panel local projections to investigate the adjustment dynamics of income and consumption after disturbances to the long-run equilibrium between both variables. We find that the adjustment paths are significantly different during rare disasters, i.e., periods characterized by very large cumulative declines in real GDP. During more normal times, increases in the log consumption-income ratio are followed only by moderately higher income growth to restore equilibrium. During large crises, on the other hand, the error correction through income is larger and consumption growth also increases after an increase in the consumption-income ratio, albeit less than income growth. Using a savers-spenders consumption model with disaster risk, we explain these findings through a sizable increase in the fraction of spenders - i.e., rule-of-thumb consumers - during disasters. The magnitude of our empirical findings can be replicated using a naïve disaster prediction rule or an adaptive disaster learning scheme that embodies ignorance about the true disaster process.
CHINESE MONETARY POLICY AND TEXT ANALYTICS: CONNECTING WORDS AND DEEDS (WITH JEANNINE BAILLIU AND XINFEN HAN)
Work in progress - Link to draft
We propose a novel approach to estimating the People's Bank of China (PBOC) monetary policy rule. Given China's complex monetary policy framework, the PBOC's actions are not well captured by standard monetary policy rules that can be used for its Western counterparts. This calls for new approach able to capture the complexities underlying the PBOC's observed behavior. This paper examines whether information provided in PBOC's official statements can help find their policy rule in practice. We use Latent Semantic Analysis to extract content information embedded in PBOC Monetary Policy Reports and examine whether these are significant in explaining Chinese monetary policy actions.
ON THE CYCLICALITY OF WAGE INEQUALITY IN THE US (WITH DIANA ALESSANDRINI)
Work in progress - Link to draft
We investigate whether wage inequality in the U.S. is dependent on business cycle fluctuations. The existing literature has shown that wage inequality is acyclical. We show that this is true on average but the cyclicality has changed substantially over time. By allowing for time-variation in the relationship between wage inequality and macroeconomic conditions, we find that wage inequality was highly procyclical in 1988-1993 and at the onset of the Great Recession, while it was strongly counter-cyclical in late 1990s and during 2014-2017. On average, the correlation between the cycle of GDP and that of wage inequality is close to zero, but this average masks heterogeneous dynamics. We then investigate possible explanations for the change in cyclicality over time.
COVID-19 AND JOB SEARCH IN THE U.S.: GREAT RESIGNATION OR HEALTH RISK UNCERTAINTY? (WITH STEVEN LEHRER)
Using a novel survey for the U.S. we explore the impact of the COVID-19 pandemic on off-the-job search behavior. We find support for the presence of two labor market frictions that influence job search behavior in opposite directions possibly resulting in longer non-employment spells. To see this, we document first that the impact of the pandemic on search efforts differs across demographic groups in such a way that reveals two distinctive groups among the population. Those that search more consist of white males, high-skilled, high-income with young children while those that search less are females, youth, low-skilled and low-income individuals. Additionally, the latter group is largely affected by uncertainty surrounding the evolution of the disease. We relate this findings with the presence of matching frictions caused by individuals quitting their jobs to search for a new career or job that they feel is better suited, a.k.a. the so-called Great Resignation and behavioral responses arising from the uncertainty surrounding the understanding of the disease causing decreasing search efforts.
Other Work
WHY DON'T FIRMS HIRE YOUNG WORKERS DURING RECESSIONS? A replication of Eliza Forsythe (Economic Journal, 2022) (JOINT WITH JONATHAN CRECHET, JING CUI and ANTOINE SAWYER)
Under review Journal of Comments and Replications in Economics - Link to draft
Submitted
TEACHING
2- DAY COURSE - BANK OF CANADA
Short introductory course on unobserved components time series models fundamentals with focus on state-space specification and Kalman filter/smoother estimation.
COURSES AT ERASMUS UNIVERSITY ROTTERDAM
Seminar of International Finance - Master program
Advanced Macroeconomics - Master program
Macroeconomics - Bachelor program
COURSES AT TILBURG UNIVERSITY
Statistics - Bachelor program
OTHER ACTIVITIES
CONFERENCES AND SEMINARS
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RGS Doctoral Conference - Ruhr University Bochum (27-28 February 2013)
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Internal Seminar at Erasmus University - Rotterdam (March 2013)
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SNDE - University Milano-Bicocca (28-29 March 2013)
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ZEW Macroconference - University of Mannheim (18-19 July 2013)
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EEA Conference - University of Gothenburg (26-30 August 2013)
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RGS Doctoral Conference - Dortmund University (27-28 February 2014)
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Internal Seminar at Norges Bank - Olso (March - May 2014)
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Netherlands Economists Day (NED) - Amsterdam (31 October 2014)
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SNDE - Norwegian Business School - Oslo (19-20 March 2015)
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EEA-ESEM - Geneva (22-26 August 2016).
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LACEA-LAMES - Universidad EAFIT - Medellin (10-12 November 2016).
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CEF - Fordham University - New York (28-30 June 2017).
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LACEA-LAMES - Universidad de San Andres - Buenos Aires (9-11 November 2017).
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HCEO Faculty Collaborative Seminar - Jinan University - Guangzhou, China (25-29 June 2018).
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33rd EEA-ESEM Conference - Cologne, Germany (27-31 August 2018).
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St Francis Xavier University Seminar - virtual (15 September 2020).
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7th RCEA Time Series Workshop - virtual (25-26 June 2021).
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14th EEFS Conference - Cracow University (16-19 June 2022).
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34th EALE Conference - University of Padova (8-10 September 2022).
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57th CEA Conference - University of Manitoba (30 May-3 June 2023).
SUMMER SCHOOLS
Barcelona Graduate School of Economics (2013)
Exchange rates predictability (Prof. Barbara Rossi)
Modelling non-stationary and non-linear time series (Prof. Perez-Quiroz and Prof. Mayoral)
Empirical time series methods for macroeconomic analysis (Prof. Gambetti)
Technical University of Lisbon (2012)
Modelling financial time series with GAUSS
Cass Business School (2012)
Time series analysis
REFERENCES
Associate Professor,
Departments of Economics and Business,
School of Economics
Professor of Econometrics,
Faculty of Economics and Management