Research

Consumer Payment Choice and the Heterogeneous Impact of India's Demonetization (Journal of Economic Dynamics and Control, 2022; with Nikhil Damodaran) DOI

Consumer payment choice is based on heterogeneous preferences, availability, usage costs, and effective taxes. We examine the consequences of this choice and apply the model to the recent demonetization in India. The welfare cost of the liquidity shock was equivalent to 1% of consumption owing to the slow remonetization process.

Accounting for Debasements: Indivisibility or Imperfect Recognizability of Money (Economic Inquiry, 2019) DOI

Two features of a commodity money system namely indivisibility and imperfect recognizabiity are used to account for debasements, which is a puzzle under standard price theory as people voluntarily exchanged heavy coins for lighter ones, the difference being kept as seigniorage.

Undefeated Equilibria of the Shi-Trejos-Wright Model under Adverse Selection (Journal of Economic Theory, 2018) DOI

Examines how liquidity of assets that have a role as medium of exchange directly or as collateral (think commodity money or mortgage-backed securities in collateralized repos) can suddenly drop on account of adverse selection. 

Decentralizing Constrained-Efficient Allocations in the Lagos-Wright Pure Currency Economy (Journal of Economic Theory, 2017; with Tai-Wei Hu, Guillaume Rocheteau and Mario Silva) DOI

Decentralizes the constrained-efficient allocation of the Lagos-Wright (2005) pure currency economy through (a) divisible money, take-it-or-leave-it offers by buyers, and a transfer scheme financed by money creation, and (b) indivisible money, take-it-or-leave-it offers by buyers, and no government intervention.

Consumer Choice, Market Power, and Inflation (with Sephorah Mangin)

Introduces consumer choice into a search-theoretic model of monetary exchange which amplifies the welfare cost of inflation and results in a non-monotonic effect of choice on market power. 

Inflation, Unemployment and International Trade 

An open economy model with money features international trade with an explicit medium of exchange, monopolistically competitive heterogeneous firms and a decentralized labor market. 

Liquidity and Unemployment under Risk shocks (with Timothy Kam)

Asset returns typically reflect a risk and liquidity premium, the size of which depends on the state of the economy. An increase in aggregate uncertainty raises interest rates thereby fewer firms enter, and if accompanied by a fall in productivity, unemployment rises by even more. 

Financing of Fiscal Response to COVID-19: A Pragmatic Alternative (Indian Economic Review Special issue on Pandemics, COVID-19 and India, 2020; with Gaurav Datt) DOI

As governments around the world, including the Indian government, mount a fiscal response to the Covid-19 crisis, the question of how to finance the fiscal response has risen to prominence. We argue that the option of the central bank monetizing the additional government debt and then writing it off offers a pragmatic way out. 

Watch - 'COVID-19: Monetary and Fiscal Policy in Pandemic Times' as part of the COVID-19 and Beyond: A CDES Webinar Series.

Financing of Fiscal Response to Covid-19: A Red Herring? (Ideas for India: 12 April 2020; with Gaurav Datt)

Nine Concerns About the Centre's 1.7 Lakh Crore Package (The Wire: 02 April, 2020; with Gaurav Datt, Lata Gangadharan, Asad Islam, Sisira Jayasuriya, Pushkar Maitra, Vinod Mishra, Jaai Parasnis and Ranjan Ray)