PUBLICATIONS
”Production and Inventory Dynamics Under Ambiguity Aversion”, with Yulei Luo, Jun Nie, and Eric Young, 2024, (Forthcoming at Journal of Monetary Economics)
"Inattentive Capital Investment with Nonconvex Costs", 2024, (Forthcoming at Annals of Economics and Finance)
WORKING PAPERS
" Rational Inattention and Real Exchange Rates", 2024, with Wei Li and Yulei Luo, Submitted
(This paper was presented at the 2019 Shanghai Macroeconomics Workshop, the 2019 and 2023 Financial Openness and Liberalization in Emerging Economies in Shanghai, and the Econometric Society 2023 Australasia Meeting.)
We study the consumption-portfolio decision of a household with limited information processing capacity (rational inattention) in a two-country equilibrium model under recursive utility. Our rationally inattentive household reacts gradually to asset return innovations and naturally concerns about long-run consumption risk, which implies less volatile and less cross-country correlated stochastic discount factors. Despite the high correlation of international stock markets, we are able to generate (i)relative consumption growth and real exchange rate depreciations has a correlation close to zero or negative (Backus-Smith puzzle); (ii)fluctuations in exchange rate is not so volatile; (iii)consumption is less volatile than real exchange rate.
"Diagnostic Expectations and Inventory Dynamics ", with Yulei Luo, Jianjun Miao, and Penghui Yin
“Ambiguity, Nonconvex Cost and the Distribution of Investment”
“Information Processing Constraint, Investment Under Uncertainty and Tobin’s q”
OTHER PUBLICATIONS
Centering on economic construction to stabilize general socioeconomic conditions while fully promoting economic recovery: Outlook, policy simulations, and reform implementation—A summary of the annual SUFE macroeconomic report (2022–2023), 2023, with Kevin X. D. Huang and Guoqiang Tian, International Studies of Economics, 18(1).