About me

I am a PhD candidate in economics at the University of Minnesota. I will join the International Monetary Fund in September 2024.

My fields of interest are Macroeconomics, International Economics and International Finance.


My Research Statement is available here.

Working Papers

Sovereign Debt Auctions with Strategic Interactions (Job Market Paper)
(with Stelios Fourakis)
WP, October 2023

Abstract (click to expand) In this paper, we compare how different protocols for sovereign debt auctions affect borrowing, the cost of debt and welfare, when default risk is a concern. To do so, we build a theoretical model of sovereign borrowing and default with auctions and asymmetric information. We calibrate the model to the Portuguese economy under the discriminatory price protocol, prior to its bailout in 2011. Using the calibrated model we perform a counterfactual exercise by changing the auction protocol. We find that the uniform price protocol yields higher welfare than the discriminatory price protocol, and that these gains are highest during crises (up to 0.6% of permanent consumption). This result is consistent with the observed switch to a uniform price protocol (for long term debt). Our accounting for dynamic effects is crucial for this result. Given standard values for risk aversion of the borrowing country, the discriminatory price protocol performs better than the uniform under a single auction setting. Once we allow for repeated auctions, however, the uniform price protocol is preferred under the calibrated model. In fact, when default risk is a concern, the uniform price protocol provides better incentives for borrowing over time, as well as protecting investors from static dilution within an auction. Both lead to much better prices for the government, which more than justifies forgoing the insurance mechanism provided by the discriminatory protocol.

A Debt Crisis with Strategic Investors: Changes in Demand and the Role of Market Power
WP, September 2021

Abstract (click to expand) Does demand for sovereign debt change during high default risk events? Using a dataset containing individual bids on Portuguese debt auctions, I investigate whether investors’ demand for sovereign debt changes during the debt crisis. I find that aggregate bid functions are, on average, five times more elastic leading up and during the crisis. That is, on average, in order to increase the amount raised by 1%, the price would need to decrease, in percentage terms, by five times more than it had before the crisis. I then decompose the changes in demand into two components: a fundamental component, due to changes in valuation, and a strategic component, that arises from investors’ market power. Although the role of market power is negligible in normal times, it gets more pronounced leading up and during the crisis. The auction mechanism loses efficiency during that period as the government is not able to extract the full surplus from strategic investors. At their peak, inefficiency costs jump to 0.6% of the issued amount. Finally, I discuss a possible mitigation strategy. Everything else constant, shorter maturities should be used to avoid higher inefficiency costs.


Sovereign Debt Crises and Floating-Rate Bonds
(with Mark Aguiar, Manuel Amador)
A. Aguirre, A. Fernandez, and S. Kalemli-Ozcan, editors, Credibility of Emerging Markets, Foreign Investors’ Risk Perceptions and Capital Flows, pages 159–84, 2023

Abstract (click to expand) Sovereign debt markets are plagued by a number of frictions; in particular, a limited commitment to repay, limited commitment to future fiscal policies (debt dilution), lack of state contingency, and vulnerability to self-fulfilling runs. We use an analytical model to explore the role of maturity in mitigating or exacerbating the respective frictions. We show that long-term debt with a variable (but capped) coupon combines many of the desirable properties of both short-term and long-term bonds. We then turn to a quantitative model to explore the welfare benefits or costs of issuing floating rate bonds.

Work in Progress

  • Multiplicity in Discriminatory Price Auctions (with Stelios Fourakis)

  • Demand Elasticity in Sovereign Debt Models

  • Demand Elasticities and the Maturity Choice of Sovereign Debt

  • The Case for Joint Debt (with Daniel Belchior)


University of Minnesota, Twin Cities

  • ECON 4721 Money and Banking, Instructor: Summer 2023, Syllabus
  • ECON 4261 Introduction to Econometrics, TA: Spring 2023
  • ECON 4821 Public Economics, Instructor: Fall 2021, Syllabus
  • ECON 1101 Introduction to Microeconomics, Instructor: Summer 2020
  • ECON 8108 Macroeconomic Theory, TA: Spring 2020, Materials
  • ECON 8107 Macroeconomic Theory, TA: Spring 2020, Materials
  • ECON 8106 Macroeconomic Theory, TA: Fall 2019, Materials
  • ECON 8105 Macroeconomic Theory, TA: Fall 2019, Recitation Notes

Teaching in Lisbon

  • Fall 2017 - Lead Instructor for Fundamentals of Financial Economics at ISEG - Lisbon School of Economics and Management, Syllabus
  • 2012 - 2018: Teaching Assistant at Catolica Lisbon School of Business and Economics


alves030 at umn dot edu
ricardoalvesmonteiro at gmail dot com


Mailing Address
4-101 Hanson Hall
1925 Fourth Street South
Minneapolis, MN 55455