“Quantifying the Allocative Efficiency of Capital: The Role of Capital Utilization", joint with Poorya Kabir and Ia Vardishvili, Journal of Monetary Economics 2025
MRPK dispersion is associated with productivity gains if the fundamental source of dispersion arises from higher capital utilization flexibility. (Working paper version)
(Previously circulated as Does Marginal Product Dispersion Imply Productivity Losses? The Case of Maintenance Flexibility and Endogenous Capital User Costs.)
Consumer Demand and Credit Supply as Barriers to Growth for Black-owned Startups, joint with Teega H. Zeida, Journal of Monetary Economics 2024
Black-owned startups face both lower demand and tighter credit constraints relative to White-owned startups, but credit constraints do not have a persistent impact on firm outcomes, whereas lower demand permanently depress profitability of Black-owned firms. (Working paper version) (Media: Forbes, Rotman Insights)
Capital Budgeting, Uncertainty, and Misallocation, joint with Ben Charoenwong, Yosuke Kimura, and Alan Kwan, Journal of Financial Economics 2024
Firms trade off investing in information prior to investment, or relying on ad-hoc adjustments to investment purchases in response to new information. We find high-productivity firms leverage more on information acquisition, and low-productivity firms leverage more on investment adjustments. (Working paper version)
(Previously circulated as Investment Plans, Uncertainty, and Misallocation)
Capital-Reallocation Frictions and Trade Shocks, joint with Andrea Lanteri and Pamela Medina, American Economic Journal: Macroeconomics 2023
Manufacturing firms typically face large frictions in selling capital. We find that these frictions can greatly slow down the productivity gains when an economy opens to trade, due largely to a composition effect: Low productivity but large firms are slow to exit, while high productivity but small firms are driven out. (Working paper version)
A Fast and Low Computational Memory Algorithm for Non-Stochastic Simulations in Heterogeneous Agent Models. Online Appendix, Economic Letters 2020
A simple and fast method to approximate the Markov kernel that usually appears in heterogeneous agent models. Most useful for economists who code in scripted languages like MATLAB or Python. (Working paper version)
Entrepreneurial Investment Dynamics and the Wealth Distribution [Apr 2025] [Computational Appendix] Conditionally accepted at American Economic Journal: Macroeconomics
Entrepreneurs face substantial resale frictions, and these frictions are as important as standard channels like borrowing constraints.
“Demand Shocks, Supply Shocks, and the Cost of Uncertainty", joint with Poorya Kabir [Sep 2025]
Demand and supply shocks have identical effects for firm investment decisions in standard models with flexible production decisions, and higher volatility of either shocks typically increases firm values (Abel-Hartmann-Oi effect). However, they have different impacts in a model of capacity constraints. Higher demand volatility increases firm values, but higher supply volatility reduces firm values. We also show how to disentangle volatility from uncertainty (lack of forecastabiity) using capacity utilization data.
“Maintenance Volatility, Firm Productivity, and the User Cost of Capital.", joint with Poorya Kabir [Aug 2024]
Higher maintainance volatility is associated with poorer firm performance in terms of sales, size, and TFP. We rationalize this in a quantitative model where maintenance is a necessary input into firm productivity, but suffers decreasing returns. Eliminating maintenance volatility can subtantially increase firm and aggregate performance.
"The Role of Human Capital Specificity in Entrepreneurship", joint with Attila Gyetvai [Feb 2025]
Individuals with high earnings in paid work return to jobs with lower earning after a stint in entrepreneurship; conversely individuals with low earnings in paid work return to jobs with higher earning after a stint in entrepreneurship. We propose a theory of human capital specificity to explain this observation, and quantify its impact on entrepreneurial risk.
"Barriers to Trade in Capital Goods", joint with Michael Blanga-Gubbay, Pamela Medina, and Andrea Lanteri
"Investment Flexibility", Cheng Chen, and Takahiro Hattori
“Uncertainty Shocks and Entrepreneurship" [Nov 2018]
Aggregate startup rates are strongly and negatively correlated with uncertainty, while exit rates are very weakly and positively correlated with uncertainty. A model with endogenous entry and exit, and where entrepreneurs face faces resale frictions, can reconcile these facts.
“Should Local Regions Promote Large Firms or Small Startups? Trade-offs Between Scale and Market Power in Local Labor Markets"