Senior Economist
Division of International Finance
Federal Reserve Board
Washington, DC 20551
Federal Reserve Profile
Google Scholar Profile

Welcome to my personal website. I am a Senior Economist in the Division of International Finance of the Federal Reserve Board. My main area of research is macroeconomics, focusing on investment dynamics over the business cycle. My work investigates residential investment in the housing boom and bust, inventory investment in business-cycle models, cyclical durable investment with second-hand markets, and fiscal policy in the great recession. Prior to joining the Federal Reserve Board, I was an Assistant Professor of Economics at Vanderbilt University. I received my B.A. degree from Seoul National University and my Ph.D. from Columbia University.


Time to build and the real-options channel of residential investment

Journal of Financial Economics, 135, 255-269, January 2020 (with Chamna Yoon).

Appendix Replication files

Abstract: A standard real-options model predicts that time-to-build investment decisions could be delayed by uncertainty over future revenue. We quantify the first-order importance of this mechanism in the recent housing boom-bust cycle by developing and estimating a model of sequential irreversible investment with stochastic bottlenecks. We find that the main driver of construction delays during the boom is construction bottlenecks. However, further delay in construction during the bust is caused by an increase in uncertainty, which grew by 21.6% between 2002 and 2009. The model can account for more than one-third of the decline in residential investment between 2002 and 2009.

The role of durables replacement and second-hand markets in a business-cycle model

Journal of Money, Credit and Banking, 51(4), 761-786, June 2019.

Lead article Appendix Replication files

Abstract: Transactions of used durables are large and cyclical, but their interaction with purchases of new durables has been neglected in business-cycle studies. I fill this gap by introducing a new business-cycle model of consumer durables where households resell their goods to the second-hand market and the production of new durables is affected by the supply of used goods. The model delivers three conclusions: Markups are smaller for goods that are more durable and more frequently replaced; markups are countercyclical for durables, resolving the comovement puzzle of Barsky, House, and Kimball (2007 American Economic Review); and procyclical replacement demand amplifies durable spending.

What do inventories tell us about news-driven business cycles?

Journal of Monetary Economics, 79, 49-66, May 2016 (with Nicolas Crouzet).

Working paper Working paper appendix

Abstract: There is widespread disagreement over the quantitative contribution of news shocks to business-cycle fluctuations. This paper provides a simple identifying restriction, based on inventory dynamics, that tightly pins down this contribution. Structural models predict that finished-good inventories should fall when there is an increase in consumption and investment induced by news shocks. A structural VAR with these sign restrictions indicates that news shocks account for at most 20 percent of output volatility. Since inventories comove positively with consumption and investment in the data, shocks that generate negative comovement cannot account for the bulk of fluctuations.

Targeted transfers and the fiscal response to the great recession

Journal of Monetary Economics, 59, S50-S64, December 2012 (with Ricardo Reis).

VoxEU Working paper Appendix Replication files

Abstract: Between 2007 and 2009, government expenditures increased rapidly across the OECD countries. While economic research on the impact of government purchases has flourished, in the data, most of the increase in expenditures was in government transfers. After documenting this fact, we argue that future research should focus on the positive impact of transfers. Towards this, we present a model in which there is no representative agent and Ricardian equivalence does not hold because of uncertainty, imperfect credit markets, and nominal rigidities. Targeted lump-sum transfers are expansionary both because of a neoclassical wealth effect and because of a Keynesian aggregate demand effect.


Computerizing households and the role of investment-specific productivity in business cycles

September 2019 (with Seunghoon Na).

Abstract: This paper estimates a business-cycle model of investment-specific productivity shocks on information technology (IT) and non-IT consumer durables. We find that productivity shocks specific to consumer durable investment drive the real expenditure of IT consumer durables and are main sources of the recent boom in durable consumption expenditures. Nonetheless, they have small influence over the dynamics of output and nondurable consumption, because unlike business investment goods, consumer durables do not add to the productive capital of the economy. The shock could become important for business cycles if strong complementarity exists between IT and other consumption goods.

Early 20th century American exceptionalism: Production, trade and diffusion of the automobile

July 2019 (with Dong Cheng, Mario Crucini, and Hakan Yilmazkuday). [R&R]


Abstract: The beginning of the twentieth century provides a unique opportunity to explore the interaction of rapid technological progress and trade barriers in shaping the worldwide diffusion of a new and highly traded good: the automobile. We scrape historical data on quantity and value of passenger vehicles exported from the United States to other destination countries, annually from 1913 to 1940. We model the rise of the automobile from global obscurity towards a level dependent upon the extent of long-run pass-through of US prices into destination markets and destination GDP per capita. The results based on a diffusion model with CES preferences and non-unitary income elasticity show that 62% of the gap in diffusion levels between the US and the rest of the world is due to price frictions such as markups, tariffs, and trade costs, while the remaining 38% is due to income effects.

The effective interest rate lower bound in a small open economy: The case of Korea

October 2018 (with Young-Kwan Kang).

Abstract: We estimate the macroeconomic effect of monetary policy shocks in Korea using a vector autoregressive model, accounting for differential effects when the policy rate in Korea is close to or lower than the US federal funds rate. We find that the Korea-US policy rate difference matters for the response of output. Lowering the policy rate boosts production only when the Korea-US policy rate difference is notably large. Our empirical results suggest that the US federal funds rate is an effective lower bound for discretionary monetary policy in Korea.


Time on the market and price responses: Evidence from new house sales

(with Chamna Yoon).

Inventory disinvestment spikes

(with Nicolas Crouzet).