Research

Publications:

Journal Articles:

• "Time-Varying Volatility and the Housing Market" with C. Richard Higgins, Macroeconomic Dynamics, 28, no. 2 (2024): 426–61. 

• “Land Price Dynamics and Macroeconomic Fluctuations with Imperfect Substitution in Real Estate Markets” with Scott Davis and Kevin X. D. Huang, Journal of Economic Dynamics and Control,  134 (2022): 104274. 

  • Previously circulated as "Imperfect Substitutability in Real Estate Markets and the Effect of Housing Demand on the Macroeconomy." 

• "Housing Wealth Reallocation Between Subprime and Prime Borrowers During Recessions" with Nam Vu, Macroeconomic Dynamics, 26, no. 7 (2022): 1775-1805.  (Online Appendix)

• "Consumer Perception of Food Expiration Labels: "Sell By" vs. "Expires On" with Onur Sapci, Eastern Economic Journal, 46 (2020): 673-689.  

• "Bank Size, Returns to Scale and Cost Efficiency" with Bradley Miles (Colgate'16), Journal of Economics and Business, 105 (2019): 105842.

• "Understanding the Cyclical Nature of Financial Intermediation Costs" with Matthew Jaremski, Southern Economic Journal, 84, no. 1 (2017): 181-201. 

• "Costly Financial Intermediation and Excess Consumption Volatility" Journal of Macroeconomics, 51 (2017): 97-114.  

Edited Book Chapters:

• “How Instructors Can Help Students Embrace a Growth Mindset” with Antje Graul in Habits of Mind: Designing Courses for Student Success. Edited by Julia M. Gossard and Chris Babits. Empower Teaching Open Access Book Series, 2023.

Working Papers:

• “Bank Loan Portfolio and Monetary Transmission” with Hongfei Sun (under submission) 

Abstract:

We develop a tractable Dynamic Stochastic General Equilibrium framework of money, banking, and finance to study the macroeconomic implications of the bank portfolio choice between commercial and collateralized household loans, as well as the transmission of monetary policy through bank decisions. In our model, monetary policy directly affects the tightness of the bank lending constraint. As monetary policy affects interest rates, it then influences asset prices and optimal decisions through this constraint. Our approach renders short-run and long-run effects of monetary policy without relying on conventional modeling techniques such as nominal rigidities and search frictions. We further show that the equilibrium inflation rate is determined endogenously by the interaction of labor demand and supply.  Our quantitative study illustrates how various short-run disturbances to the economy and long-run changes in monetary and macroprudential policy can alter the bank loan distribution. Such loan reallocation results in crowding-out effects between construction and production and directly impacts the overall financial risk brewing in the economy. Therefore, a correct measurement of financial risk involves not only the risks associated with each loan type but also the distribution of loan types. 

• "The Carbon Footprint of the U.S. Monetary Policy" with Aliaksandr Amialchuk and Onur Sapci  (under submission)

Abstract:

This paper examines how exogenous variations in monetary policy affect industrial and energy-related carbon emissions through production. Leveraging differences in state-level industrial production and employment, the study reveals that an unanticipated decrease in the federal funds rate increases industrial production, leading to higher emissions. In particular, a one percentage point rise in manufacturing production due to external changes in monetary policy causes a 1.57 percentage point increase in industrial emissions. The results highlight the environmental cost of monetary policy and suggest that future policies should consider their indirect effects on carbon emissions.

• The Housing Market, Financial Shocks, and Spillovers

Abstract:

This paper explores the spillover and magnification effects from the financial sector to the housing market and business cycles in the US, using bank costs as a proxy for financial shocks. By introducing a realistic banking sector with production costs, the model matches housing market characteristics, such as relative size, volatility and cyclicality of housing wealth, prices, and investment, better than the existing dynamic stochastic general equilibrium settings. Financial shocks explain most of the variations in output, labor hours, house prices, loan supply, and bank capital, showing the importance of credit supply.

Work-in-Progress:

•   “Costly Financial Intermediation and Business Cycle Asymmetries”

•   “Labor Shortage, Housing Affordability, and the COVID Pandemic” with Hongfei Sun

•   “Regional Housing and the Economy” with Sacha Gelfer and C. Richard Higgins

•   “Housing Market and Unemployment”