Econometrica. Volume 83, No. 1, Jan 2015
Brief Summary: We use indirect inference to estimate a household model of durable consumption with fixed costs of adjustment. We aggregate this model and show that it implies economic stimulus has smaller effect during recessions. We provide various reduced form evidence for the model mechanism.
Measuring How Fiscal Shocks Affect Durable Spending in Recessions and Expansions (with David Berger).
American Economic Review: Papers and Proceedings, Volume 104, No. 5, May 2014.
Brief Summary: We use STVARs to provide empirical evidence that durable spending responds more strongly to identified government spending shocks during expansions than during recessions.
Quarterly Journal of Economics, Volume 129, No. 1, Feb. 2014
Brief Summary: I identify new micro pricing facts and show that these facts imply monetary policy faces a worse inflation-output tradeoff during times of high volatility.
This Version Feb 2015
Brief Summary: We provide evidence from microdata that increases in housing wealth lead to reduced shopping effort by households and that firms respond by raising markups. The total elasticity of retail prices to house prices is as high as 20%. This has important implications for business cycle modeling.
Regional Redistribution Through the U.S. Mortgage Market (with Erik Hurst, Ben Keys and Amit Seru)
Brief Summary: We show GSE mortgage rates do not vary with local default risk while private mortgage rates do. We argue the lack of regional risk pricing in GSE mortgage rates is driven by political constraints. A quantitative structural model shows the constant interest rate implies large transfers resources from regions with low risk to those with high risk.
This Version Oct 2014.
Brief Summary: Inflation responses to nominal shocks vary across time: we use confidential BLS micro data to show a positive relationship between exchange rate pass-through and dispersion of item-level price changes, and we show dispersion varies dramatically across time. We argue this empirical fact is evidence of time-varying strategic complementarities and we reject "uncertainty" shocks as an explanation.
Brief Summary: Aggregate price flexibility as measured by the inflation-output tradeoff in an estimated forward looking New-Keynesian Phillips Curve rises with microeconomic volatility.
Dynamics of the U.S. Price Distribution (with David Berger)
A completely revised draft is coming soon.
Brief Summary: We use CPI, PPI and IPP micro data to document how the distribution of price changes varies across time. We document several robust facts across all three data sets, and fitting a simple model to this data implies greater price flexibility during recessions and after large inflation shocks.
Work In Progress:
Understanding Housing Wealth Effects
Regional Effects of Monetary Policy
Older Working Papers:The Empirical Price Duration Distribution and Monetary Non-Neutrality
Matlab and Stata: Code
Brief Summary: Allowing for price adjustment probabilities that vary with duration provides a better fit for observed price spells in micro data. Extending a Calvo model to match both duration-dependence and cross-item heterogeneity to match micro data increases monetary non-neutrality by 100-230% with a large fraction being driven by duration dependence.