Assistant Professor of Economics, UC Santa Cruz
PhD in Economics, Cornell 2013

Email
grace.gu at ucsc.edu
Phone: +1 (831) 459-4791
Office: E2 rm463, UCSC
Santa Cruz, CA 95060

Research Interests:

Intl: Sovereign default
Macro: Labor market

Talks 2017:
UCSB (LAEF conf)

Talks 2016:

U Pittsburgh
GeorgeWashington U
IMF
U Maryland
Notre Dame
MWMacro (Purdue)

Talks 2015:

AEA (Boston)
UC Riverside
UC Davis
Atlanta Fed
UCSB
Peking U
Tsinghua
SF Fed
NBER SI
U Richmond
IMF
Fed Board
Fordham U
Phila Fed
World Bank
USC
MW Intl
MWMacro (Rochester)



Fact Figures That Motivated My Research (Latest First):


Figure: Sovereign Spreads versus Google Search Volume Index


Take-away:
  • Sovereign spread comoves with public attention measured by Google Search Volume Index on debt (crisis) related search terms 
  • We investigate the impact of state-contingent investor attention on sovereign spread dynamics in our paper "The Pricing of Sovereign Risk Under Costly Information."
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Figure: Growth around Sovereign Default Episodes (in percent)
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Note: The statistics are based on 45 sovereign default episodes in 27 developing countries over the period 1977-2009. Due to data limitation, the sample period and/or the number of default episodes vary slightly for some variables. Most up-to-date information and raw data sources are detailed in my paper "A Tale of Two Countries: Sovereign Default, Trade, and Terms of Trade".

Take-away:
  • Upon default (year 0), on average GDP volume growth rate declined a lot less than GDP value, if at all. The majority of the countries' losses of output growth came from real depreciation relative to US dollars. 
  • And the growth rates of both export value and import value turn negative, and the import value declines more significantly than the export value does. 
  • Most of the decline in export value does not come from changes in export volume but from the real depreciation, since on average export volume growth remains positive through default events. 
  • About half of the decline in import value can be attributed to declines in import volumes, and the other half to the real depreciation. 
  • Without exchange rate, it is difficult for a model to distinguish the sources of changes to real income, import, and export values after a default: by how much the changes are due to real depreciation, and by how much the changes can be attributed to activity volume changes. 
  • My paper "A Tale of Two Countries: Sovereign Default, Trade, and Terms of Trade" distinguishes the two sources during default events through a terms-of-trade channel. 
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Figure: The Dynamics of Firm-paid Per-worker Cost of Employee Benefits
       
Source: BLS-ECI and author's calculations. 

Take-away: