Peer-reviewed Publications:

"Corporate Investment and the Real Exchange Rate", with C.Minoiu and J.Ostry, January 2021.

Journal of International Economics, forthcoming. Previous version: IMF Working Paper 17/183.

"Why is labor receiving a smaller share of global income?", with M.Das and Z.Kozcan,

Economic Policy, Vol. 34 (100) October 2019, p. 723-759, Oxford University Press. Previous version: IMF Working Paper 17/169.

Media coverage: VoxEU blog, Bloomberg, Financial Times, The Guardian

"Regional labor market adjustment in the United States: trend and cycle", with D.Furceri and P. Loungani,

Review of Economics and Statistics, Vol. 99 (2) May 2017, p.243-257, MIT Press.

Online Appendix.

Media coverage: Financial Times, VoXEu, The New York Times, Christian Science Monitor, The Atlantic.

"Monetary Policy in Low Income Countries in the Face of the Global Crisis: A Structural Analysis", with A. Baldini, A. Berg, J. Benes and R. Portillo,

Pacific Economic Review, 20 (1), pp. 149-192, February 2015, Wiley.

"Foreign labor costs and domestic employment: what are the spillovers?",

Journal of International Economics, Vol. 89 (1), pp. 154-171, January 2013, Elsevier.

"International Spillover of Labour Market Policies",

Oxford Economic Papers, Vol. 65(2), pp. 417-446, Oxford University Press, 2013.

Common stochastic volatility trends in international stock returns” with Jürgen Wolters,

International Review of Financial Analysis 17 (2008), pp. 431-445, Elsevier.

Recent Working Papers:

"Wealth Inequality and Private Savings: the Case of Germany", May 2020, IMF Working Paper No. 20/107

Media coverage: The Economist, The Guardian, The Wall Street Journal, Handelsblatt, Reuters, Süddeutsche Zeitung, FAZ, Die Welt, Focus

Abstract: This paper explores the interaction between corporate ownership concentration and private savings, and by extension, the current account balance in Germany. As high corporate savings largely reflected capital income accruing to wealthy households and increasingly retained in closely-held firms, the buildup of external imbalances in Germany has been accompanied by widening top income inequality, rising private savings and compressed consumption rates. Rising corporate profits in an environment of high business wealth concentration account for 90 percent of the rise in the private savings rate and a third of the increase in the German current account surplus over 1999 - 2016.

"Innovation and Corporate Cash Holding in the Era of Globalization", with J. Ahn and K. Adler, November 2018.

Media coverage: Central Banking

Abstract: We document a broad-based trend in rising cash holding of firms across major industrialized countries over the last two decades, a trend that is most pronounced for firms engaged strongly in R&D activities. Our contributions to the literature are twofold. First, we develop a simple model that brings together the insights from modern trade theory (Melitz, 2003) with those of contract theory in corporate finance (Holmström and Tirole, 1998) to show that increased openness to trade can raise the returns to innovation and the demand for cash holding as firms insure against innovation-induced liquidity shocks. Second, we derive sharp empirical predictions and find supporting evidence for them using firm-level data across major G7 countries during 1995-2014, a period that saw an unprecedented rise in globalization and technological innovation.

"The Rise in Corporate Saving and Cash Holding in Advanced Economies: Aggregate and Firm Level Trends", with C. Maggi, November 2018.

Media coverage: Handelsblatt

Abstract: Using cross-country national accounts and firm-level data, we document a broad-based trend in rising gross saving and net lending of non-financial corporates across major industrialized countries over the last two decades, though most pronounced in countries with persistent current account surpluses. We find that this trend holds consistently across major industries, and is concentrated among large firms, driven by rising profitability, lower financing costs, and reduced tax rates. At the same time, higher gross corporate saving have not supported a commensurate increase in fixed capital investment, but instead led to a build-up of liquid financial assets (cash). The determinants of corporate cash holding and saving are also broad-based across countries, with the growth in assets of large firms, R&D intensity, and lower effective tax rates accounting for most of the increase over the last 15 years.

"Finance and Employment: the Working Capital Channel", with L.Liu, IMF Working Paper 17/189.

Abstract: We study the effect of external financing constraint on job creation in emerging markets and developing countries (EMDC) at the firm level by looking at a specific transmission channel - the working capital channel. Earlier literature has pointed out that empirically, financing matters more for employment growth in EMDC than in advanced economies. We explain this pattern by developing a simple model that illustrates how the need for working capital financing of a firm affects the link between financial constraint and the firm’s job creation. We show that the effect of relaxing financial constraint on job creation is larger the smaller the firm scale and the more labor-intensive its production structure, both of which are prevalent features of firms in EMDC’s. We use the World Bank Enterprise Surveys data to test the main predictions of the model, and find strong evidence for the working capital channel of external finance on employment. We address endogeneity problems of financial constraint by relying on different identification strategies, including firm panels, GMM methods, and difference-indifference estimation.

Media coverage: BusinessFortNight

Work in Progress:

"The Granularity of Corporate Savings", with Isabel Hanisch, Callum Jones and Nan Li.

Policy Papers and Other Writings:

"Understanding the downward trend in labor income shares", with M.Das, Z. Koszan, W.Lian, Chapter 3 in World Economic Outlook, April 2017.

Media coverage: Financial Times, The Guardian, Bloomberg, Süddeutsche Zeitung

“Tackling Gender Inequality in Asia: the case of Korea”, with D. Furceri, J. Hwang, M. Kim, Chapter 6 in Women, Work, and Economic Growth: Leveling the Playing Field, edited by K. Kochhar, S. Jain-Chandra, M. Newiak, Washington DC: International Monetary Fund, Fall 2016.

"Where are we headed? Perspectives on Potential Output", with P. Blagrave, D. Furceri, R. Garcia-Saltos, World Economic Outlook Ch 3, April 2015.

Media coverage: Financial Times, The Economist, The Wall Street Journal

"Recent Labor Market Reforms: A Preliminary Assessment", Ch 1 in Spain: Selected Issues, IMF Country Report No. 15/233.

"Recent U.S. Labor Force Dynamics: Reversible or not?", with R. Balakrishnan and J.Sole, IMF Working Paper 15/76.

previous version in "United States: Selected Issues", IMF Country Report No. 14/222, July 2014.

Media coverage: The Economist, The Hutchins Roundup

"Strategies for Reforming Korea's Labor Market to Foster Growth", with D. Furceri, J. Hwang, M.Kim, T.Kim, IMF Working Paper 14/137.

Media coverage: Bloomberg Business, South China Morning Post

"The real exchange rate and employment in China", with Ruo Chen, IMF Working Paper 11/148.

Media coverage: The Wall Street Journal

The Human Cost of Recessions: Assessing It, Reducing It”, with Prakash Loungani, IMF Staff Position Note 10/17, 2010.

Monetary policy analysis in low-income countries in the face of the global crisis: The case of Zambia”, with Alfredo Baldini, Andrew Berg, Jaromir Benes and Rafael Portillo, IMF Working Paper 12/94.

“The Tragedy of Unemployment”, with Prakash Loungani, Finance & Development, Vol. 47 (4), pp. 22-25, December 2010.

“The Challenges of Growth, Employment and Social Cohesion”, with Prakash Loungani and ILO co-authors, Oslo, September 2010,

Media coverage: The Economist, The New York Times