"A Silver Lining in the Silver Economy: Macroeconomic Implications of Healthy Aging" (with Bertrand Gruss, Eric Huang, Andresa Lagerborg, and Diaa Noureldin)
Coverage: Financial Times, Freakonomics, World Economic Outlook.
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.
"Monetary Policy under Network-Level Bottlenecks" (with Nick Sander, Sihwan Yang, and Sebastian Wende)
Coverage: The Economist, World Economic Outlook.
This paper examines monetary policy under temporary, sector‑level supply bottlenecks using a rich production‑network framework. We first show that binding sectoral constraints steepen the aggregate supply curve and introduce novel trade‑offs when interacting with demand shifts. We then embed this mechanism in a calibrated two‑region, multi‑sector New Keynesian model with occasionally binding constraints. First, we use the model to generate policy lessons when some sectors in the economy face supply constraints while others may face deficient demand. Second, we fit the model to 2020–24 and quantify how bottlenecks amplified inflation and output volatility during COVID‑19. Unlike standard supply shocks, temporary sectoral constraints create a trade-off between economic stability when constrained and economic stability afterwards—so that crisis‑period focus can worsen later aggregate adjustments. We also show that coordinated tightening across regions mitigates inflation spillovers through the production network, indicating that the global slack is an important independent determinant of domestic inflation.
"Business Cycle Insurance, Inflation, and Currency Returns" (with Husnu Dalgic) In-progress
"Monetary Policy, Trade, and Commodity Price Fluctuations" (with Daisoon Kim and Larry Schembri) In-progress
"Unconventional Monetary Policy and Ambiguity" (with Burçin Kısacıkoğlu) In-progress