I am a Ph.D. candidate in Economics at the University of Minnesota and a Research Assistant at the Federal Reserve Bank of Minneapolis.
My research interests include applied macro, heterogeneous agents macro, firm dynamics and business cycles.
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This version: January 2020 (new draft soon). Also available as Bank of England Staff Working Paper 846
Abstract: This paper studies firm dynamics over the business cycle. I present evidence from the United Kingdom that more rapidly growing firms are born in expansions than in recessions. Using administrative records from Census data, I find that this observation also holds for the last four recessions in the United States. I also present suggestive evidence that financial frictions play an important role in determining the types of firms that are born at different stages of the business cycle. I then develop a general equilibrium model in which firms choose their managers' span of control at birth. Firms that choose larger spans of control grow faster and eventually get to be larger, and in this sense have a larger target size. Financial frictions in the form of collateral constraints slow the rate at which firms reach their target size. It takes firms longer to get up to scale when collateral constraints tighten; therefore, businesses with the largest target size are affected disproportionately more. Thus, fewer entrepreneurs find it profitable to choose larger projects when financial conditions deteriorate. Using Bayesian methods, I estimate the model using micro and aggregate data from the United Kingdom. I find that financial shocks account for over 80% of fluctuations in the formation of businesses with a large target size, and TFP and labor wedge shocks account for the remaining 20%. An independently estimated version of the model with no choice over the span of control needs larger aggregate shocks in order to account for the same data series, suggesting that the intensive margin of business formation is important at business cycle frequencies. The model with the choice over the span of control generates an empirically relevant and non-targeted collapse in the right tail of the cumulative growth distribution among firms started in recessions, while the model without such a choice does not. The paper also discusses implications for micro-targeted government stimulus policies.
This version: July 2019 (first draft June 2018). Also available as Minneapolis Fed Working Paper 22
Abstract: We investigate cyclicality of variance and skewness of household labor income risk using PSID data. There are five main findings. First, we find that head’s labor income exhibits countercyclical variance and procyclical skewness. Second, cyclicality of hourly wage is muted, suggesting that head’s labor income risk is mainly coming from volatility of hours. Third, younger households face stronger cyclicality of income volatility than older ones, although the level of volatility is lower for the younger ones. Fourth, while the second earner helps lowering the level of skewness, it does not mitigate the volatility of household labor income risk. Meanwhile, government taxes and transfers are found to mitigate the level and cyclicality of labor income risk volatility. Finally, among heads with strong labor market attachment, cyclicality of labor income volatility becomes weaker, while cyclicality of skewness remains.
This version: April 2019 (first draft September 2017)
Abstract: This paper explores the aggregate implications of countercyclical macroeconomic volatility. First, by drawing on data of publicly traded U.S. firms, I find that both the investment rate and the probability of investment spikes decrease as macroeconomic volatility rises, with this effect weakening as firms age. Second, to rationalize empirical patterns, I build an uncertainty regime-switching general equilibrium model of investment with capital adjustment costs and firms' entry and exit. In the model, mature firms are close to their long-run productivity, and therefore, do not respond strongly to heightened uncertainty. Conversely, young firms are far away from their long-run productivity, and prefer to "freeze" their investment decisions during volatile times. Finally, in contrast to existing literature, I show that the entry/exit margin can be quantitatively important, especially during high-uncertainty episodes such as the Great Recession.
Works in Progress
First draft soon
Abstract: Using a dataset of US establishments and their firm affiliation, we find that an establishment in one sector owned by a multi-sector firm is more likely to reduce employment if the firm is more exposed to the import competition from China ("China shock") through its establishments operating in other sectors. This finding holds (i) conditional on the establishment’s direct exposure to the China shock, or alternatively, (ii) comparing plausibly similar establishments operating in the same sector. Also, the result holds for both manufacturing and non-manufacturing establishments. This implies that establishment-level employment is strongly affected by import competition in other sectors linked through within-firm sectoral networks created by multi-sector firms. Finally, we show that general equilibrium adjustments at the sectoral aggregate level do not neutralize our finding. Sector-level employment is sensitive to the Chinese import competition in other sectors linked through within-firm sectoral networks. This is a novel propagation channel of China shocks across sectors.
Basic Knowledge and the Growing Link Between Patents and Universities - with Todd Schoellman
First draft soon
Abstract: We develop a panel dataset covering university R&D expenditures and patents at the MSA-year level for 379 MSAs spanning the years 1972-2016. We document a growing link between the two since 1980. Along the extensive margin, the patent advantage for MSAs with a major research university doubled. Along the intensive margin, the elasticity of MSA patents with respect to local university R&D more than doubled. We view the growing spillovers from universities to nearby inventors as evidence of growing spillovers from basic research. The timing of the change is consistent with an important role for the Bayh-Dole Act, which made it possible for inventors (rather than the government) to patent federally funded inventions. The Act greatly increased licensing of patents, suggesting a possible mechanism for the spillover.
Productivity, Business Cycles, and Trade: Evidence from Chile - with Diana Van Patten