EC321 · Monetary Economics and Aggregate Fluctuations
London School of Economics and Political Science
- Location
- London, United Kingdom
- Dates
- 2022/2023
Economist · Researcher · Educator
Dr. Isaac Z. Martinez
Assistant Professor of EconomicsTecnológico de Monterrey · Monterrey CampusSchool of Social Sciences and Government · Department of Economics
CFM AssociateCentre for Macroeconomics (CFM)A centre associated with the London School of Economics and Political Science (LSE)
“We can only see a short distance ahead, but we can see plenty there that needs to be done.”
Understanding how money, institutions, and technology shape the economy.
Research interests & themes
My research
01 · Research
Research
Publications and working papers in monetary economics and macroeconomics, including labour informality, payment systems and artificial intelligence.
Research interests & themes
01
Monetary Economics
How monetary policy decisions affect consumption, employment, output and inflation. My work examines how household differences and labour informality shape these transmission mechanisms.
02
Macroeconomics
Business cycles, labour markets and stabilisation policy in emerging and developing economies. I combine empirical evidence and macroeconomic models to study how economic structures affect responses to shocks.
03
Payment Systems
Money, banking, credit supply and the architecture of payment systems. This interest connects the institutions through which payments and finance operate with broader questions in monetary economics.
04
AI & LLMs in Macro
Artificial intelligence and large language models as tools for macroeconomic analysis, alongside questions about the relationship between AI and the economy. Turing & Smith Hub provides a space for reading and discussion across these interests.
Working Papers
Working papers and ongoing research. Status labels distinguish the job market paper from work in progress.
2025
Job Market Paper · Featured research
Monetary Policy Transmission in Economies with Informal Labor Markets
Household-level evidence from Peru's ENAHO panel (2012–2022) and a Two-Agent New Keynesian model show that informal labour markets amplify monetary policy transmission on output and inflation.
2024
Work in Progress
Exports and Exchange Regimes
The impact of exchange rate regimes in fragile developing countries: fixed regimes hinder export competitiveness and exacerbate fragility, while floating regimes offer flexibility to manage external shocks and promote growth.
2023
Work in Progress
Banking Dynamics under Unconventional Monetary Policy: Exploring the Effects of Negative Interest Rates on Banking Concentration
A model with heterogeneous banks shows that negative interest rates reduce bank profits and disproportionately affect smaller banks, increasing banking concentration.
2023
Work in Progress
Complementarity and Substitution of Formal and Informal Employment during Business Cycles
Peru's Permanent Employment Survey (2002–2019) shows informal wages are more volatile and informal employment rises in downturns; a calibrated search model evaluates policy measures.
2022
Working Paper
Unexpected Inflation, Credit Supply, and Financial Frictions
Unexpected inflation diminishes bank equity and constrains loan supply under financial frictions — credit rationing disproportionately affects new firms, with implications for zombie firms and resource misallocation.
2017
Working Paper (Spanish)
Cyclical Complementarity and Substitution in Informal Employment within Small Open Economies
A two-sector DSGE model with search frictions: aggregate productivity shocks make informal employment procyclical (complementarity) while sectoral shocks make it countercyclical (substitution).
Publications
Published research, including book chapters and other publications.
Book Chapters
Oxford University Press · 2021Exports, Exchange Regimes, and Fragility
Ibrahim Elbadawi, Raimundo Soto and Isaac Z. Martinez
Chapter 14 in Macroeconomic Policy in Fragile States, edited by Ralph Chami, Raphael Espinoza and Peter J. Montiel. Pages 406–448.
A study of exchange-rate regimes, exports and growth in fragile economies using a DSGE framework. The chapter considers market frictions, external shocks and the role of public investment and social transfers in shaping macroeconomic outcomes. It forms part of a collective volume on the policy challenges facing fragile states.
View chapter · Oxford Academic ↗2014
Published · Revista Economía y Sociedad N° 86 · pp. 34–40
Asymmetric Impact of External Shocks on the Sectoral Employment Dynamics: An Approach to the Peruvian Case
Dynamic panel GMM and FAVAR evidence on how external shocks and exports affect sectoral employment in Peru, with policy recommendations for the non-tradable sector.
2012
Publication · CIES · Spanish
The Role of Unemployment in Salary Determination: Empirical Evidence for Lima Metropolitan
ENAHO data and dynamic panel GMM reveal a 'wage curve' for Greater Lima — more inelastic for formal than informal jobs, suggesting stronger wage rigidities in the formal sector.
02 · Teaching
Teaching
Teaching experience across undergraduate, graduate, executive and summer programmes in Mexico, the United Kingdom, Chile and Peru. My roles include lecturer, teaching assistant and course coordinator.
LSE Teaching Award2024 · London School of Economics
LSE Teaching Award nomination2021 · London School of Economics
Current teaching · Tecnológico de Monterrey
EC1005B · Macroeconomic Outlook of Mexico
Tecnológico de Monterrey · School of Social Sciences and Government · Department of Economics · Monterrey Campus, Mexico
- Term
- August–December 2026
- Role
- Professor · Team-taught with Professor Bonnie Palifka
- Languages
- Spanish and English
The course podcast offers an additional way to revisit macroeconomic concepts alongside class notes, readings and discussion.
Listen to the course podcastExplore previous teaching · courses, workshops & coordination
Undergraduate
EC210 · Macroeconomics Principles
London School of Economics and Political Science
- Location
- London, United Kingdom
- Dates
- 2020/2021 & 2021/2022
Introduction to Economics
Pontificia Universidad Católica de Chile
- Location
- Santiago, Chile
- Dates
- 2018 · First semester; 2019 · Second semester
Econometrics with Stata
Pontificia Universidad Católica de Chile
- Location
- Santiago, Chile
- Dates
- 2018 · First semester; 2019 · Second semester
Macroeconomics II
Pontificia Universidad Católica de Chile
- Location
- Santiago, Chile
- Dates
- 2016 & 2017
Graduate
EC413 · Macroeconomics
London School of Economics and Political Science
- Location
- London, United Kingdom
- Programme
- MSc in Economics
- Dates
- 2023 & 2024
Econometric Theory I
Pontificia Universidad Católica de Chile
- Location
- Santiago, Chile
- Programme
- MSc in Economics
- Dates
- 2017 · First semester
Executive
PP440E · Economic Policy Analysis
London School of Economics and Political Science
- Location
- London, United Kingdom
- Programme
- Executive Masters Programme in Public Administration
- Dates
- 2023 & 2024
Global Macroeconomics Environment
Pontificia Universidad Católica de Chile
- Location
- Santiago, Chile
- Programme
- MBA-UC
- Dates
- 2017 · Second semester
Workshops
Topics of Advanced Macroeconomics
Universidad Nacional Mayor de San Marcos
- Location
- Lima, Peru
- Dates
- 2022
40-hour workshop for faculty and students of Economic Sciences.
Topics in Macroeconomics
Universidad Nacional Mayor de San Marcos
- Location
- Lima, Peru
- Dates
- 2021/2022
104-hour workshop for faculty and students of Economic Sciences.
Foundations for Quantitative Economic Research
Universidad Nacional Mayor de San Marcos
- Location
- Lima, Peru
- Dates
- 2021
32-hour workshop for faculty and students of Economic Sciences.
Summer School
EC102 · Introductory Macroeconomics
London School of Economics and Political Science
- Location
- London, United Kingdom
- Programme
- LSE Summer School
- Dates
- Summer 2023 & 2024
Course coordination
Introduction to Economics · 2018–2019
Course Coordinator, Department of Economics, Pontificia Universidad Católica de Chile · Santiago, Chile.
Listen & explore
Podcast
Economics · Teaching · Audio
Macroeconomic Outlook of Mexico — Isaac Z. Martinez
An audio companion for exploring the macroeconomic ideas behind the course: a way to revisit concepts, connect them with economic questions and continue learning beyond the classroom.
The podcast complements my teaching in Macroeconomic Outlook of Mexico. Students and curious listeners can use it alongside readings, class notes and discussion to work through ideas at their own pace.
How to use it
- Before class: listen for the main question and note unfamiliar concepts.
- After class: revisit the arguments and compare them with your notes.
- For discussion: bring a question, an example or a point you would like to examine more closely.
Listen here
Listen to the podcast
Use the player on this page, or open the programme directly on Spotify.
Open SpotifyThis is a local or embedded preview. External players may be restricted here. You can try the player below or use the Spotify button.
How Monetary Policy Reaches the Economy: The Transmission Mechanism
Explore the transmission mechanism: how monetary policy decisions reach the wider economy. Use this episode as a starting point for revisiting the link between central-bank decisions and macroeconomic outcomes.
Listen to this episode ↗04 · Comunidad académica en formación · Español
Turing & Smith Hub
Turing gave us machines that learn. Smith gave us markets that coordinate. We study what happens when they meet.
Qué es el Hub
Turing & Smith Hub es una comunidad académica en formación dedicada a explorar la relación entre inteligencia artificial y economía. Fundada por Dr. Isaac Z. Martinez, reúne a personas interesadas en aprender, discutir ideas y compartir conocimiento mediante actividades voluntarias.
Queremos crear un espacio cercano para leer con atención, hacer preguntas y contrastar perspectivas sobre los cambios que la IA introduce en la vida económica. Estudiantes de distintas áreas son bienvenidos: la curiosidad y las ganas de conversar son un buen punto de partida.
Actividades iniciales
Reading Circle
Encuentros para comentar lecturas sobre IA y economía, compartir preguntas y discutir sus implicaciones. Cada lectura será un punto de partida para entender argumentos, examinar evidencia y aprender entre todos.
The Agora
Conversaciones y debates sobre preguntas concretas relacionadas con tecnología, mercados y sociedad. Se organizarán según el interés y la disponibilidad del grupo, con apertura a distintas perspectivas y respeto por las ideas de los demás.
Próximos encuentros
En noviembre de 2026 queremos comenzar con un primer Reading Circle y, si el calendario lo permite, repetirlo unas dos semanas después. Diciembre y enero servirán para preparar el equipo y la programación que comenzará en febrero de 2027.
Próximo encuentro: detalles por anunciar.Cómo participar
¿Quieres asistir a los encuentros, presentar una lectura, sostener o facilitar una conversación, ayudar a organizar o colaborar de otra manera? Haz clic en «Quiero participar» y cuéntanos cómo te gustaría sumarte. La participación será voluntaria; expresar interés no obliga a asumir responsabilidades. Podrás decidir cómo involucrarte según tus intereses y tu disponibilidad.
A futuro, aspiramos a conectar esta comunidad con personas de distintas instituciones y países.
Quiero participar
Completa el registro de interés en el formulario de Google. Puedes hacerlo dentro de esta página o abrir el mismo formulario en una pestaña independiente.
El fundador es profesor investigador de Economía en el Tecnológico de Monterrey. Esta afiliación identifica su actividad profesional y no implica patrocinio ni reconocimiento universitario de la iniciativa.
Academic exchange
Conferences & Talks
Conference presentations, seminars and academic talks, listed by year. These engagements include specialist economics conferences, university audiences and policy institutions. Each entry identifies the event or host and location recorded in my CV.
Conference presentation
Fed St. Louis–JEDC–SNB–SCG Conference
Host / event: Fed St. Louis · JEDC · SNB · SCG
Location: Gerzensee, Switzerland
Academic presentation
Academic presentation · Department of Economics, UNMSM
Host / event: Department of Economics · Universidad Nacional Mayor de San Marcos
Location: Lima, Peru
Academic presentation
Peruvian Association of Economics Students
Host / event: Peruvian Association of Economics Students
Location: Lima, Peru
Academic presentation
Academic presentation · Department of Economics, UNMSM
Host / event: Department of Economics · Universidad Nacional Mayor de San Marcos
Location: Lima, Peru
Academic presentation
Academic presentation · Department of Economics, UNMSM
Host / event: Department of Economics · Universidad Nacional Mayor de San Marcos
Location: Lima, Peru
Conference presentation
Chilean Economic Society (SECHI) Conference
Host / event: Sociedad de Economía de Chile (SECHI)
Location: Valparaíso, Chile
Policy research presentation
External shocks and sectoral employment dynamics in Peru
Host / event: Labor and Social Security Commission · Congress of the Republic of Peru
Location: Lima, Peru
Research presentation during the thirteenth ordinary session. Original title: “Análisis del impacto asimétrico de los shocks externos sobre la dinámica del empleo en los sectores productivos: una aproximación al caso peruano.”
Official session minutes · PDFPolicy research presentation
External shocks and employment in Peru
Host / event: CIES Diálogos Ministeriales · Ministry of Labor and Promotion of Employment
Location: Lima, Peru
Presentation of research on the effects of external shocks on sectoral employment, followed by discussion with ministry officials and technical advisers. CIES published its event report on 6 June 2015.
Event report · CIESPress · Research dissemination · Policy engagement
Communications
Interviews & Media
Newspaper contributions and coverage, research news, and exchanges with public institutions. Original-language sources and documents are linked below.
Press & research coverage
10 April 2022 · Portuguese · Brazil
O Estado de S. Paulo
Newspaper coverage on the global economic consequences of the war in Ukraine, listed in my media archive. São Paulo, Brazil.
24 May 2021 · Spanish · Chile
Research featured by Instituto de Economía UC
Coverage of the chapter “Exports, Exchange Regimes, and Fragility,” coauthored with Ibrahim Elbadawi and Raimundo Soto, in Macroeconomic Policy in Fragile States.
14 June 2013 · Spanish · Peru
El Comercio · Employment, unemployment and wages
A newspaper contribution on labour informality and the sensitivity of wages to unemployment in metropolitan Lima. Published in the Economics section, page B5; the original clipping is preserved by CIES.
Policy engagement & academic dissemination
2018 · Oxford, United Kingdom
Macroeconomic Policy in Fragile States · Seminar
Seminar on macroeconomic policy in fragile states at the Blavatnik School of Government, University of Oxford. The archive entry and subsequent coverage of the related book chapter are available below.
5 June 2015 · Spanish · Lima, Peru
Ministerial Dialogue · Ministry of Labor and Promotion of Employment
Presentation of research on external shocks and sectoral employment in Peru in the CIES Diálogos Ministeriales series. The exchange involved vice-ministers, technical staff and advisers. The CIES report was published on 6 June 2015.
9 June 2015 · Spanish · Lima, Peru
Labor and Social Security Commission · Congress of the Republic
Presentation of “Análisis del impacto asimétrico de los shocks externos sobre la dinámica del empleo en los sectores productivos: una aproximación al caso peruano.” The official minutes identify the presentation within the commission’s thirteenth ordinary session.
10 April 2012 · Spanish · Lima, Peru
Central Bank of Peru · Research recognition
Official notice linked in my media archive for the Luis Felipe de las Casas Grieve research contest. My CV records first place in this competition.
07 · About Me
About Me
I am an Assistant Professor of Economics in the Department of Economics, School of Social Sciences and Government at Tecnológico de Monterrey (ITESM), Monterrey Campus. I am also an Associate of the Centre for Macroeconomics (CFM), a centre associated with the London School of Economics and Political Science.
My research focuses on monetary economics, macroeconomics, payment systems, and the use of AI and large language models in macroeconomics. A central thread of my work is labour informality: how the informal sector shapes the transmission of monetary policy, the behaviour of employment and wages over the business cycle, and the design of stabilisation policy in emerging and developing economies.
My work combines household-level micro data with macroeconomic modelling — from Peruvian labour surveys to Two-Agent New Keynesian frameworks — and engages directly with policy questions on exchange-rate regimes, banking structure and financial frictions.
I completed my PhD in Economics at the London School of Economics and Political Science in 2026. My earlier training includes an MRes in Economics at LSE, an M.A. in Economics at Pontificia Universidad Católica de Chile, and a B.A. in Economics and the Professional Title of Economist at Universidad Nacional Mayor de San Marcos. I have taught monetary economics, macroeconomics and economic policy at undergraduate, graduate and executive levels.
Education, appointments, honors & skills
Academic profile
Education & Academic Appointments
Education
2022–2026
PhD in Economics
London School of Economics and Political Science · London, United Kingdom
Advisors: Benjamin Moll and Ethan Ilzetzki
2019–2021
MRes in Economics
London School of Economics · London, United Kingdom
2015–2017
M.A. in Economics
Pontificia Universidad Católica de Chile · Santiago, Chile
2011 · 2015
B.A. in Economics · Professional Title of Economist
Universidad Nacional Mayor de San Marcos · Lima, Peru
Academic Appointments
Current
Assistant Professor of Economics
Tecnológico de Monterrey · School of Social Sciences and Government · Department of Economics, Monterrey Campus
Current
CFM Associate
Centre for Macroeconomics · A centre associated with LSE
Aug 2023–Dec 2024
Teaching Fellow · Part-time
London School of Economics and Political Science
Jan 2018–Jul 2019
Adjunct Instructor · Full-time
Pontificia Universidad Católica de Chile
Aug–Dec 2017
Research Assistant · Full-time
Pontificia Universidad Católica de Chile
2018–2019
Course Coordinator · Introduction to Economics
Department of Economics, Pontificia Universidad Católica de Chile
Research Experience
Research collaborations listed by supervisor; these periods may overlap with the appointments above.
2016–2019
Research Assistant · Professor Klaus Schmidt-Hebbel
Department of Economics, Pontificia Universidad Católica de Chile
2017–2019
Research Assistant · Professor Raimundo Soto
Department of Economics, Pontificia Universidad Católica de Chile
Research Interests
Monetary economics and macroeconomics, including payment systems and AI/LLMs in macroeconomics.
Honors, Distinctions, Fellowships, and Grants
2024
LSE Teaching Award
London School of Economics · United Kingdom
2021
Nominated for the LSE Teaching Award
London School of Economics · United Kingdom
2019–2024
LSE PhD Studentship
London School of Economics · United Kingdom
2019–2024
Economics PhD Scholarship
Department of Economics, LSE · United Kingdom
2018–2019
Junior Teaching and Research Fellowship
Pontificia Universidad Católica de Chile · Santiago, Chile
2017
Award for Academic Excellence
Pontificia Universidad Católica de Chile · Santiago, Chile
2017
Degree with Maximum Distinction
Pontificia Universidad Católica de Chile · Santiago, Chile
2015–2017
President of the Republic Scholarship
Ministry of Education · Lima, Peru
2013
Research Contest CIES-IDRC-FB
Economic and Social Research Consortium · Lima, Peru
2012
Research Contest Luis Felipe de las Casas Grieve · First Place
Central Bank of Peru · Lima, Peru
2011
Research Contest CIES-IDRC-FB
Economic and Social Research Consortium · Lima, Peru
2011
Prima-AFP Excellence Award
Prima AFP–Credit Group · Peru
Skills & Languages
Programming & research tools: MATLAB, Dynare, Stata, R, Python, GAUSS, EViews, LaTeX, LyX and GeoGebra.
Languages: Spanish (native); English (fluent: speaking, reading and writing).
Academic references · October 2024 CV
References listed in the October 2024 CV; affiliations and contact details below reflect that document.
- Ethan Ilzetzki · Department of Economics, LSE · [email protected]
- Benjamin Moll · Department of Economics, LSE · [email protected]
- Ricardo Reis · Department of Economics, LSE · [email protected]
- Matthias Doepke · Department of Economics, LSE · [email protected]
08 · CV & Contact
Curriculum vitae & contact
For academic correspondence, research conversations, teaching enquiries or invitations to speak, please contact me by email. For the Hub, the participation section explains the ways to get involved.
Profile
Assistant Professor of Economics, Tecnológico de Monterrey (ITESM), Monterrey Campus. Associate, Centre for Macroeconomics (CFM), a centre associated with LSE.
Research interests: monetary economics, macroeconomics, payment systems, AI and large language models in macroeconomics, labour informality.
Email: [email protected]
Academic background
Explore my education, academic appointments, research experience, awards and fellowships. The academic profile also includes research tools, languages and references listed in my October 2024 CV.
View academic profile