CV - Job Market Paper  

Williams, Tomas

Job market candidate

Contact information

Tel. +34 93 542 2698

Available for Interviews at

Simposio de la Asociación Española de Economía (SAEe), December 15-17, Bilbao, Spain

Allied Social Science Associations (ASSA), January 6-8, Chicago, US


Research Interests

International Finance, Financial Economics, Empirical Banking, Macroconomics

Placement officer

Filippo Ippolito


Fernando Broner
Alberto Martin
José Luis Peydró

Sergio Schmukler


"Capital Inflows, Sovereign Debt and Bank Lending: Micro-Evidence from an Emerging Market" (Job Market Paper)
This paper uses a quasi-natural experiment to show that government access to foreign funding increases private access to credit. I identify a sudden, unanticipated and exogenous increase in capital inflows to the sovereign debt market in Colombia. This was due to J.P. Morgan’s inclusion of Colombian bonds into its emerging markets local currency government debt index, which led to an increase in the share of sovereign debt held by foreigners from 8.5 to 19 percent. This event had significant and heterogeneous effect on Colombia’s commercial banks: banks that acted as market makers in the treasury market reduced their sovereign debt holdings by 4.2 percentage points of assets and increased their commercial credit supply by 3.9 percentage points of assets compared to the rest of the banks. The differential increase in credit is around 2 percent of GDP. Firm and industry level evidence suggests that this had positive effects on the real economy. A higher exposure to market makers led to a higher growth in financial debt, investments, employment, production and sales

“International Asset Allocations and Capital Flows: The Benchmark Effect”, with Claudio Raddatz and Sergio Schmukler, Revise & Resubmit at the Journal of International Economics
We study different channels through which well-known benchmark indexes impact asset allocations, capital flows, asset prices, and exchange rates across countries, using unique monthly micro-level data of benchmark compositions and mutual fund investments during 1996-2014. We exploit different events and the presence of countries in multiple benchmarks to study the impact of benchmarks. We find that movements in benchmarks appear to have important effects on equity and bond mutual fund portfolios, including passive and active funds. The effects persist even after controlling for other relevant variables, such as time-varying industry-level factors, country-specific effects, and macroeconomic fundamentals. Exogenous, pre-announced changes in benchmarks impact asset allocations, capital flows, and abnormal returns in asset prices and exchange rates. These systemic effects occur not just when the benchmark changes are announced, but also later on when they become effective. By impacting country allocations, benchmarks explain apparently counterintuitive movements in capital flows and aggregate prices.



“Financial Globalization in Emerging Economies: Much Ado About Nothing?”, with Eduardo Levy Yeyati, 2014, Economia, vol. 14 (20), pp. 91-131.
Financial globalization, defined as global linkages through cross-border financial flows, has become increasingly relevant for emerging markets as they integrate financially with the rest of the world. This paper argues that, because of the way it is often measured, it has also led to the misperception that financial globalization in emerging markets has been growing in recent years. We characterize the evolution of financial globalization in emerging markets using alternative measures, and find that, in the 2000s, financial globalization has grown only marginally and international portfolio diversification has been limited and declining over time. Next, we revisit the empirical literature on the implications of financial globalization for local market deepening and international risk diversification proposing new measures of the former that, in our view, are better suited to address these questions than those typically used in the literature. We find that, whereas financial globalization in emerging economies indeed fosters domestic market deepening, it falls short of providing the international portfolio diversification needed to yield visible gains in terms of consumption smoothing.

“Emerging Economies in the 2000s: Real Decoupling and Financial Recoupling”, with Eduardo Levy Yeyati, 2012, Journal of International Money and Finance, vol. 31 (8), pp. 2102-2126.
This paper documents an intriguing development in the emerging world in the 2000s: a decoupling from the business cycle of advanced countries, combined with the strengthening of the co-movements in the main emerging market assets that predates the synchronized selloff during the crisis. In addition, the paper tests the hypothesis that financial globalization, to the extent that it creates a common, global investor base for EM, could lead to a tighter asset correlation despite the weaker economic ties. While an examination of the impact of alternative financial globalization proxies yield no conclusive result, a closer look at global emerging market equity and bond funds show that the latter indeed foster financial recoupling during downturns, reflecting the fact that they trade near their respective benchmarks and respond to withdrawals by liquidating holdings across the board.

Research Papers in Progress

“Firm Financing and Benchmark Indexes”, with Fernando Broner and Sergio Schmukler. Obtained grant Ref 18516-Finance for Poverty Reduction and Shared Prosperity (The World Bank)
In this paper, we focus on the yet unaddressed issue of the real and financial effects of inclusions/exclusions from international benchmark indexes and how they affect firms from developing countries that obtain their financing in global capital markets. In particular, using methodological and country-level changes that exogenously affect the firm composition of indexes, we analyze not only whether the cost of capital of developing country firms change but also whether the affected firms raise more capital, change the type of capital they raise, and invest more when their cost of capital changes. This would allow us to tackle the difficult issue of finding exogenous shocks to the supply of capital and then explore the difference between firms from the same countries that are included and excluded from these international indexes. This research will help understand the consequences of capital flows from institutional investors on the real decisions of firms from developing countries that participate in capital markets, and the ability of firms to access finance in globalized markets. Furthermore, it will shed light on the financing conditions of firms that are not in benchmark indexes. Moreover, it will help understand how the reclassification of countries in different groups (e.g., frontier, emerging) can affect firms and their financing opportunities, and to what extent those reclassifications are exogenous to the firms but the consequences of policy choices.

“Capital Flows and Market Liquidity: Evidence from Sovereign Debt Markets”, with Lorenzo Pandolfi

“Investment Decisions and Limits to Arbitrage: Evidence from a Quasi-Natural Experiment”