Research

Publications

• "On the Heterogeneous Welfare Gains and Losses from Trade," Journal of Monetary Economics, 109 (2020), 1–16, with Daniel Carroll. (programs, commentary, Cleveland fed working paper)

• "The Lost Generation of the Great Recession," Review of Economic Dynamics, 30 (2018), 179–202. (data, code)

• "A Theory of Rollover Risk, Sudden Stops, and Foreign Reserves," Journal of International Economics, 103 (2016), 44–63, with Illenin Kondo. (data, code, appendix, FRB working paper)

• "The Interaction and Sequencing of Policy Reforms," Journal of Economic Dynamics and Control, 72 (2016), 45–66, with Jose Asturias, Timothy Kehoe, and Kim Ruhl. (NBER working paper)

Working Papers

• "Firm Entry and Exit and Aggregate Growth," revision requested, American Economic Journal: Macroeconomics, with Jose Asturias, Timothy J. Kehoe, and Kim J. Ruhl. (data, code, NBER working paper)

• "On the Distributional Effects of International Tariffs," submitted, with Daniel Carroll. (slides, Cleveland fed working paper)

• "Optimal Bailouts in Banking and Sovereign Crises," February, 2020, with Cesar Sosa-Padilla and Zeynep Yom.

• "Real Interest Rates, Inflation, and Default," August, 2019, with Illenin Kondo and Fabrizio Perri. (slides, data, code, Minneapolis fed working paper)

• "The Distributional Effects of COVID-19 and Mitigation Policies," August, 2020. (slides, Covid Economics, Dallas fed working paper)

Works in Progress

• "Household Portfolio Accounting," with Chris Telmer and Siqiang Yang.

What accounts for the large heterogeneity in household portfolio composition in the United States? We consider a standard life-cycle model with labor income risk and portfolio choice (Cocco et al. 2005), augmented with a savings wedge that lowers the return on saving and a risky wedge that lowers the relative return on risky assets. Using U.S. survey data (2004-2016), we compute household-level wedges that rationalize the data, in the spirit of Chari et al. (2007). This paper has two main contributions. First, we use the wedges to guide plausible frictions that researchers should consider. Second, we analyze the extent to which household characteristics can account for the wedges. For example, we find that risky wedges are smaller for college graduates, home owners, and self-employed households, but larger for white households.

• "The Stages of Economic Growth Revisited," with Daniela Costa, Timothy J. Kehoe, Gajendran Raveendranathan, Kim J. Ruhl.

Following Rostow (1960), we propose a theory for classifying countries according to their stages of growth and for analyzing the determinants of growth in and between the different stages. We conclude that, even if they have inefficient institutions and policies, poorer countries can achieve rapid growth by adopting the technologies and managerial practices of countries like the United States. Rostow (1960) hypothesized that taking off into economic growth was a difficult task for countries in the 19th Century, requiring major changes in institutions. In the 20th Century, however, as the United States and other advanced countries became richer because of improvements in technologies and managerial practices, it became easier for poor countries to take off into rapid growth by adopting some of these improvements. As they become richer, however, their growth rates will decline unless these countries have efficient institutions and policies. For many countries, this requires that they undertake serious institutional and policy reforms. Our analysis further suggests that world economic leadership is unlikely to be provided by less-developed countries like China.

Discussions

• "Fiscal Stimulus under Sovereign Risk," by Javier Bianchi, Pablo Ottonello, and Ignacio Presno, System Committee on International Economic Analysis, May, 2020 (postponed)

• "Inequality, Redistribution, and Optimal Trade Policy: A Public Finance Approach," by Roozbeh Hosseini and Ali Shourideh, ITAM-PIER Conference on Macroeconomics, August, 2019. (slides)

• "Misallocation under Trade Liberalization," by Yan Bai, Keyu Jin, and Dan Lu, IMF-Atlanta Fed Workshop on "China in the Global Economy," September, 2018. (slides)

• "Sovereign Cocos and the Reprofiling of Debt Payments," by Juan Carlos Hatchondo, Leornardo Martinez, Yasin Kursat Onder, and Francisco Roch, IM-TCD-ND Workshop on International Macro and Capital, June, 2017. (slides)