Counterfactual Equivalence in Macroeconomics (updated version of my Job Market Paper), February 2018
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 these and other related problems in macroeconomics.
Regional Heterogeneity and the Refinancing Channel of Monetary Policy (with Andreas Fuster, Erik Hurst and Joe Vavra), August 2017. Revise and Resubmit, Quarterly Journal of Economics
We document that QE1 had the smallest effects on mortgage refinancing and spending in US regions with the largest employment and house price declines. Then, we study how the regional distribution of housing equity shapes aggregate and distributional consequences of monetary policy in a heterogenous-agent model with mortgage refinancing frictions.
The Aggregate Implications of Regional Business Cycles (with Erik Hurst and Juan Ospina), March 2016. Revise and Resubmit, Econometrica
Using regional data, several papers identify demand shocks as important drivers of employment during the Great Recession. Using aggregate data, estimated state-of-the-art DSGE models support this finding. We show that: (1) it is hard to make inferences about aggregates from regional data alone, and (2) the degree of wage stickiness implied by aggregate DSGE models is inconsistent with the flexibility of wages across US states. Then, we present a methodology that combines regional and aggregate data to identify shocks driving aggregate business cycles.
From Hyperinflation to Stable Prices: Argentina's Evidence on Menu Cost Models (with Fernando Alvarez, Martin Gonzalez-Rozada, and Andy Neumeyer), June 2016. Conditionally Accepted, 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.
Old Working Papers