Technological Transitions with Skill-Heterogeneity Across Generations (with Rodrigo Adao and Nitya Pandalai-Nayar), July 2019. (New draft!)
A new theory to analyze technological transitions. When technology-skill specificity is higher, economies adjust more slowly to technological innovations because the skill-distribution changes more across generations. We then study how German regions adjusted to the introduction of broadband internet in the 2000s. Differences in responses across generations suggest that skill-specificity is high and that the supply of skills is more elastic at longer horizons. Focusing on short- or long-run changes biases average and distributional welfare implications of innovations when skill-specificity is high.
The Aggregate Implications of Regional Business Cycles (with Erik Hurst and Juan Ospina), June 2019 (New version!). Forthcoming, Econometrica
Regional business cycles have interesting implications for our understanding of aggregate business cycles, but drawing such inferences cannot be done by naively extrapolating from regional variation alone without the aid of a formal model. We begin by documenting a strong relationship across US states between local employment and wage growth during the Great Recession. This relationship is much weaker in US aggregates. Then, we present a methodology that combines such regional and aggregate data to estimate a medium-scale New Keynesian DSGE model and do quantitative analysis.
Counterfactual Equivalence in Macroeconomics (updated version of my Job Market Paper), June 2019
When studying counterfactual policy rules using structural models, researchers are often uncertain about features of the economy that are difficult to distinguish with available data. If the counterfactual is not robust to variation in such features, its credibility is undermined. I propose a novel method to tackle this and other related problems in macroeconomics. I then illustrate the method in several applications.
Regional Heterogeneity and the Refinancing Channel of Monetary Policy (with Andreas Fuster, Erik Hurst and Joe Vavra), February 2019. Quarterly Journal of Economics
We document that QE1 had the smallest effects on refinancing and spending in US regions with the largest house price declines. We use this evidence to discipline a heterogenous-agent model with mortgage refinancing frictions. We conclude that the strength of the refinancing channel of monetary policy varies over time with the regional distribution of housing equity.
From Hyperinflation to Stable Prices: Argentina's Evidence on Menu cost Models (with Fernando Alvarez, Martin Gonzalez-Rozada, and Andy Neumeyer), Feburary 2019. Quarterly Journal of Economics
For a class of menu cost models, we derive several predictions about how price setting behavior changes with inflation both at very high and at near-zero inflation rates. We contrast these with Argentina's unique inflationary experience using micro-data on prices underlying the CPI. Then, we compute the welfare costs of a hyperinflation.
Work in Progress
Data, Autocracy, and the Direction of Innovation: Evidence from China’s AI Industry (with David Yang and Noam Yuchtman)
Inflation and Investment Misallocation (with Amir Kermani)
Old Working Papers