Macroeconomics・ Business Cycles ・Monetary economics ・Monetary and fiscal policy
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"Time use and consumption expenditures", with Daniela Hauser and Laure Simon.
Follow the time! In recessions, consumption expenditures decline least in activities where households’ own time cannot substitute for market purchases. In this new paper, we merge the American Time Use Survey with Personal Consumption Expenditures viewing consumption as an activity that combines market purchases with household time—and find that time and expenditures are substitutes. In a two-sector New Keynesian model, this channel accounts for roughly 40% of the expenditure response to a monetary policy shock. Our paper helps explain why, while consumption expenditures generally fall in recessions, some categories are cut much more than others.
"Time use and macroeconomic uncertainty", with Matteo Cacciatore and Daniela Hauser. Review of Economics and Statistics, forthcoming
Higher uncertainty shifts time from market work toward housework. That substitution provides insurance against lost market income but also weakens aggregate demand, amplifying the recessionary effects of uncertainty. This mechanism helps explain why pandemic lockdown restrictions interacting with uncertainty can turn an otherwise deflationary shock inflationary, making the downturn resemble an adverse supply shock.
Previous versions: NBER 31954, Bank of Canada 2023-29
"Monetary policy challenges in a volatile world", with Matteo Cacciatore.
Rising macroeconomic volatility and structural transformations—such as deglobalization, climate risks, and rapid AI adoption—are reshaping inflation dynamics and monetary-policy trade-offs. We study how the appropriate response depends on the size and persistence of shocks and on whether inflation expectations remain anchored.
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