Research
Publications
“When it rains, it pours": fiscal policy, credit constraints and business cycles in emerging and developed economies, Journal of Macroeconomics, 2021
Price leadership and asynchronous movements of multi-market listed stocks, International Review of Financial Analysis, 2021
joint with Ran Tao and Yuan Yuan
Estimating the dynamics of fiscal financing in emerging economies, Economic Analysis Letters, 2023
Online Appendix to "Estimating the dynamics of fiscal financing in emerging economies"
Working Papers
“Gravity: Explaining Air Passenger Traffic”
The paper explores the importance of cultural proximity for economic exchange. We estimate a structurally founded gravity model of international aviation passenger traffic. We exploit geographic variation in the population's cultural makeup at the U.S. metropolitan statistical area (MSA) level to construct cultural proximity indices between U.S. MSA-s and the rest of the world. We use the indices to evaluate the hypothesis that cultural proximity between two areas ``shortens" the geographic distance between them. In other words, the paper evaluates whether two points that are linked by common cultural ties are ceteris paribus more likely to be linked by aviation. We also estimate whether conditional on a link, two locations that have cultural ties, also have a higher passenger volume between them. Our results suggest that both cultural and geographic proximity are important determinants of trade
“Optimal Fiscal and Monetary Policy in a Small Open Economy with Firm Entry”
The terms of trade externality is a feature of the standard New Open Macroeconomics model. The externality is due to the fact that a country has market power over its domestically produced differentiated goods, which allows it to manipulate the international price of its domestically produced basket by depressing the supply of these goods. The open economy literature has established that the terms of trade externality leads the optimal monetary policy prescription to deviate from price stability, which would be optimal in the standard closed economy counterpart. This finding has very limited policy relevance, however, because it leads to higher unemployment relative to price stability. I show that in a two-sector open economy, the terms of trade externality can be used for meaningful cross-sector labor reallocation. In particular, in a small open economy with product creation, a social planner tilts the terms of trade in her favor so as to allocate more labor towards the variety creation sector.