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.
Measuring How Fiscal Shocks Affect Durable Spending in Recessions and Expansions (with David Berger).
Forthcoming, AER P&P.
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.
New Version July 2014.
Brief Summary: The response of inflation to nominal shocks varies across time: we use confidential BLS micro data to show that there is a robust positive relationship between exchange rate pass-through and the dispersion of item-level price changes. Ignoring time-varying dispersion induces huge biases in pass-through estimation. Why does pass-through vary with microeconomic dispersion? We estimate a quantitative price-setting model and conclude that our empirical fact is driven by variation in strategic-complementarities. The model strongly rejects "uncertainty" shocks as an explanation for time-varying dispersion.
Resubmitted to Econometrica. New Version May 2014.
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. Cross-sectional PSID patterns as well as aggregate time-series data support the main model mechanisms.
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:
Regional Redistribution Through the U.S. Mortgage Market (Draft coming soon)
House Prices and Retail Prices
Customer Costs of Price Changes
Consumer Spending in the Great Recession
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.