Nickson J. Cabote

Key Documents

October 2025 CV (pdf)

Job Market Paper (JMP)

Time-Consistent Fiscal Policy and Business-Cycle Amplification in Emerging Markets (pdf)

A small open-economy DSGE with an endogenous, time-consistent fiscal authority is solved globally and calibrated to emerging-market business-cycle moments. The Markov-perfect government chooses spending under borrowing constraints and convex adjustment costs. Perfect capital mobility and news about fundamentals shape expectations. In equilibrium, fiscal policy is procyclical and tracks the macro state where households anticipate persistent fiscal pressure and reduce saving. The mechanism operates through state-contingent level shifts in the spending rule rather than wealth-slope responses. The framework clarifies why procyclical spending is an optimizing response in this setting and why commitment or simple rules that smooth spending would improve welfare and stabilization.

Fields & Interests

Primary: Macroeconomics (monetary & fiscal policy); Macroeconometrics; Causal Inference for Policy Evaluation.

Secondary: Applied Econometrics; Empirical IO of Food & Agriculture.

Major Professor

• Jinhui Bai (Dissertation Committee Chair)
• Jia Yan (Dissertation Committee Member)
• Salvador Ortigueira (Dissertation Committee Member)

Education

• PhD Economics, School of Economic Sciences, Washington State University (Expected May 2026).
• Master of Statistics, School of Statistics, University of the Philippines Diliman (2019).
• Master of Public Policy (International Program), Graduate School of Public Policy, University of Tokyo, GraSPP (2015).
• BS Economics, Magna Cum Laude, School of Economics, University of the Philippines Diliman (2008).

Research Experience (Selected)

• with Professor K. Gallardo (2024-present): Agricultural and food economics: (1) Monte Carlo evaluation of dynamic controlled-atmosphere storage under heterogeneous risks and weather uncertainty; (2) fresh fruit demand system estimation (QUAIDS-PPML) using retail scanner observations.
• with Professor S.P. Galinato (Summer 2025): Partial Budget Analysis of Spray-Applied Hydro-mulch for Four Specialty Crops.
• with Professor F. Muñoz-García (Summer 2022).

Policy Experience

• Research Economist, Bangko Sentral ng Pilipinas (2018–Present)
  Monetary policy, external sector, and financial stability analysis; forecasting (ARIMA/VAR/MIDAS); local projections and SVAR/SVAR-IV; policy briefs for the Monetary Board.

• OIC, Division Chief — Macroeconomics, Department of Economy, Planning, and Development (2009–2018)
  Led a team of economist delivering macro forecasts and scenarios; coordinated interagency inputs on monetary, fiscal and growth strategies.

Teaching

Instructor on Record, Washington State University

• Advanced Business Management Economics (Spring 2024)
• Fundamentals of Microeconomics (Fall 2023, Summer 2023, Fall 2022)
• Economics of Sports in America (Spring 2023)
• Fundamentals of Macroeconomics (Winter 2022)

Teaching Assistant, Washington State University

• Introductory Econometrics (Spring 2022) for Professor W. Blundell
• Fundamentals of Macroeconomics (Fall 2021) for Professor M. Gibson.

Teaching Assistant, The University of Tokyo

• Applied Econometrics (Winter Term 2014-2015) for Professor C.H.Kuo

Publications

• “Distributional Impact of Monetary Policy: Evidence from the Philippines (pdf),” in The Distributional Impact of Monetary Policy in SEACEN Member Economies, SEACEN Centre (2020). :
• “Central Banks and Crises: Keeping a Step Ahead of Uncertainty (pdf),” Chapter 1 in BSP UNBOUND: Central Banking and the COVID-19 Pandemic in the Philippines (2020).

Conferences & Seminars (Recent)

• AEA CSQIEP Mentoring Conference, San Diego, CA, USA (July 2024)
• Western Economic Association International, Seattle, WA, USA (July 2024)
• International Conference on Computational Statistics, Giessen, Germany (August 2024)
• CAMA 2025 — Controlled & Modified Atmosphere Research, Wenatchee, WA, USA (May 2025)
• WSU School of Economic Sciences PhD Seminar, Pullman, WA, USA (December 2023)

Current Research in Progress

1. Text Data Insights and Machine Learning in Monetary Policy Shock Identification
   I identify monetary policy shocks in the Philippines without internal central‑bank forecasts by augmenting the Romer and Romer narrative method with machine‑learning forecasts from macroeconomic indicators and policy‑meeting text (sentiment and term frequency–inverse document frequency). The shock is the residual between forecasted and realized policy. Relative to a factor‑augmented vector autoregression, random forest reduces output and inflation errors by up to 73 and 76 percent, respectively; gradient boosting by 42 and 8. The augmented specification explains 60 percent of policy‑rate movements, up from 40 percent in the baseline. Local projections show faster output responses and a weaker price puzzle.
2. Economic Analysis of Dynamic Controlled Atmosphere (DCA) Storage for Organic Apples (with R.K. Gallardo, C. Torres, and S.P. Galinato)
   When is Dynamic Controlled Atmosphere (DCA) storage economically superior to controlled‑ or regular‑atmosphere storage for organic apples? We link multi‑year storage trials (pack‑out distributions) to Monte Carlo revenue simulations with monthly prices from a three‑stage least squares model. DCA’s advantage varies by cultivar, site, and time: for Gala apples, dominance rises from 10.8% in fall to 62.8% in summer, with median gains up to $163,951 per room. Honeycrisp apples show larger orchard heterogeneity (100% in spring 2004; 76.7–78.7% in summer 2022–23). Heat at harvest strengthens DCA for Gala but yields mixed Honeycrisp responses. The framework provides probabilistic adoption guidance.
3. Personal Income Tax Progressivity in the Philippines
   I measure Philippine personal income tax progressivity from 1994 to 2021, spanning multiple reforms. The method estimates a flexible tax function that maps income to effective tax rates by combining a standard parametric structure with machine‑learning adjustments. The hybrid keeps the economic interpretation while capturing bracket non‑linearities and kink points. I then assess the 2018 Tax Reform for Acceleration and Inclusion Law using double‑debiased machine learning with cross‑fitting to limit bias from model selection.
4. Demand System Estimation with Big Retail Data: A QUAIDS-PPML Analysis of U.S. Fresh Fruit Markets (with R.K. Gallardo)
5. Economic Impacts of the Mt. Pinatubo Eruption on Agricultural Productivity of Filipino Rice Farmers (with G.I. Galinato, S. Park, and S.P. Galinato)

Awards, Grants & Affiliations

• Washington State University PhD Scholarship (2021- present); Ernest W. Stromsdorfer Scholarship & Research Endowment (Summer 2024); Mercer Ranches Specialty Crops Fellowship (Fall 2024); Travel & Research Grant, WSU Organic Pome Fruit Project (Spring 2025)
• Member: Econometric Society; American Economic Association; Western Economic Association International; Philippine Economic Society; Philippine Statistical Association, Inc.
• Referee: China Economic Journal

References

• Jinhui Bai (Dissertation Committee Chair)
  • Associate Professor, Washington State University, jinhui.bai@wsu.edu
• R. Karina Gallardo
  • Professor and Extension Economist, Washington State University, karina_gallardo@wsu.edu
• Jia Yan
  • Professor, Washington State University, jiay@wsu.edu
• Professor Suzette Pedroso Galinato
  • Associate Professor and Extension Specialist, Washington State University, sgalinato@wsu.edu