Konstantin Platonov

I am a graduate student and PhD Candidate at the Economics Department, University of California Los Angeles.

My interests are macroeconomics and international economics.

I am on the job market in 2018/19 and I will be available for interviews at the ASSA meeting in Atlanta, GA.

Job Market Paper:

The Forward Premium Anomaly: Overlapping Generations, Multiple Equilibria, and Shocks to Beliefs

Uncovered interest parity states that the carry trade should deliver zero profit, on average. The data robustly reject this hypothesis in a large sample of countries: high interest rate currencies earn excess returns at short horizons and negative excess returns at longer horizons. I rationalize this observation in a two-country overlapping generations model with complete markets that features multiple dynamic equilibria. Because newborns cannot make decisions about consumption and savings before they are born, there is a set of self-fulfilling beliefs of the currently alive generations about the decisions of the future newborns. I utilize the multiplicity of dynamic equilibria by imposing a structure on the formation of beliefs. Beliefs are self-fulfilling, and shocks to these beliefs generate a large and volatile risk premium that is correlated with the interest rate differential. Changes in uncertainty about beliefs cause a reversal of expected excess returns associated with the current interest differential, similar to the reversal found in the data. I provide empirical evidence in favor of my mechanism and show that persistence of past expectations can account for most of the observed deviation from uncovered interest parity.


Animal Spirits in a Monetary Model, joint with R. Farmer. Forthcoming in the European Economic Review. Available here