"A Silver Lining in the Silver Economy: Macroeconomic Implications of Healthy Aging" (with Bertrand Gruss, Eric Huang, Andresa Lagerborg and Diaa Noureldin)
Coverage: World Economic Outlook, Financial Times
This paper investigates whether improvements in older adults’ health can mitigate the growth slowdown and rising fiscal pressures induced by population aging. We integrate detailed micro data analysis with a multi-country, heterogeneous-agent overlapping-generations general equilibrium model. Empirically, we document substantial gains in cognitive capacity among individuals aged 50 and older, which translate into higher earnings, greater labor-force participation, and increased hours worked. In our model simulations, these healthy-aging trends contribute about 0.4 percentage point to global GDP growth over 2025–2050, partially counteracting the drag from population aging. We then simulate a healthier-aging policy—modeled as a gradual convergence of older adults’ cognitive health to Swedish benchmark levels—and compare its impact with measures to raise female labor-force participation and extend effective retirement ages across economies. Our findings indicate that converging to Swedish-level healthy aging could alone boost global average annual GDP growth by roughly 0.2 percentage point in the twenty-first century, complementing other labor-market reforms in mitigating the economic drag from aging.
"International Trade and Macroeconomic Dynamics with Sanctions" (with Fabio Ghironi and Daisoon Kim)
Journal of Monetary Economics, accepted with major revisions
Blogpost: VoxEU
Coverage: Kommersant
We develop a model of the international trade and macroeconomic dynamics triggered by the imposition of financial and/or trade sanctions. Sanctions generate a reallocation of resources in the sanctioned economy. Financial sanctions are more effective only if a greater share of Foreign agents is sanctioned. Exchange rate is not a useful metric to evaluate the impact of sanctions. Welfare losses in the sanctioned economy is more pronounced if there are sanctions on the less effective sectors and the sanctioned economy is enforced to reallocate resources to the less efficient sectors.
"Business Cycle Insurance, Inflation, and Currency Returns" (with Husnu Dalgic) In-progress
[Preliminary draft is available upon request]
"Monetary Policy, Trade, and Commodity Price Fluctuations" (with Daisoon Kim and Larry Schembri) In-progress
[Preliminary draft is available upon request]
"Unconventional Monetary Policy and Ambiguity" (with Burçin Kısacıkoğlu) In-progress
[Preliminary draft is available upon request]