Publications:
-
Gains
from International Monetary Policy Coordination: Does It Pay to Be Different?
(with Evi Pappa), Journal of Economic Dynamics and Control, Vol. 32(7), July 2008, pp.2085-2117.
- Investment-Specific
Technological Change, Skill Accumulation, and Wage Inequality (with Hui He), Review of Economic Dynamics, Vol. 11(2), April 2008, pp. 314-334. You may also read the article in Knowledge@Emory about this paper.
Presentation slides
at NBER 2006 Summer
Institute
Working Papers:
This paper studies the empirical relevance
of temptation and self-control using household-level data from the Consumer
Expenditure Survey. For this purpose, we
construct an infinite-horizon consumption-savings model that allows, but does
not require, temptation and self-control in preferences. To distinguish
temptation preferences from others, we exploit individual-level heterogeneities
in our data set, and we rely on an implication of the theory that a more
tempted individual should be more likely to hold commitment assets. In the
presence of temptation, the cross-sectional distribution of the
wealth-consumption ratio, in addition to that of consumption growth,
becomes a determinant of the asset-pricing kernel, and the importance of this
additional pricing factor depends on the strength of temptation. The empirical
estimates that we obtain provide statistical evidence supporting the presence
of temptation. Based on our estimates, we explore some quantitative
implications of this class of preferences for saving and economic growth and
for the welfare cost of business cycles.
Download
the paper: [Fed
Minneapolis Staff Report 367] [a
more recent version]
Presentation
slides
at Princeton
(November 2006)
We study the sources of the Great Moderation by estimating a variety
of medium-scale DSGE models that incorporate regime switches in
shock variances and in the inflation target. The best-fit model, the one with two regimes in shock variances, gives quantitatively different dynamics in comparison with the benchmark
constant-parameter model. Our estimates show that three kinds of
shocks accounted for most of the Great Moderation and business-cycle
fluctuations: capital depreciation shocks, neutral technology
shocks, and wage markup shocks. In contrast to the existing
literature, we find that changes in the inflation target or shocks
in the investment-specific technology played little role in macroeconomic volatility. Moreover, our estimates indicate much less nominal rigidities than those suggested in the literature.
Last
updated: March 9, 2009