Welcome to my personal website! I am an economist in the Asia-Pacific Department at the International Monetary Fund. My research interests are in finance and macroeconomics.
I can be reached at hteoh@imf.org.
Disclaimer: The views in this website do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Anticipating Binding Constraints: An Analysis of Debt Covenants [Article] [SSRN] [Code&Data]
Journal of Financial Intermediation, Volume 63, 101160. July 2025.
This paper shows that anticipation can meaningfully impact inferences about the effects of covenant violations. Using textual analysis of SEC filings and earnings call transcripts, I construct a measure of covenant concerns that identifies instances where firms disclose forward-looking risks related to their debt covenants. On average, nearly 30 percent of U.S. non-financial firms report covenant concerns each year. While the real effects of covenant violations are robust for most outcomes, the estimated impact of some variables, including cash acquisitions, default risk, and credit line availability, can be overstated. This finding highlights the importance of selection around violation: firms that anticipate and successfully avoid violations differ systematically from firms that fail to avoid them.
Redrawing the Landscape of Cross-Border Flow Restrictions: Modern Tools and Historical Perspectives [Conference Draft]
with Katharina Bergant, Andres Fernandez, and Martin Uribe. July 2025.
We utilize large language models to analyze semi-structured official documents, providing a detailed and comprehensive account of daily de jure restrictions on balance of payment flows worldwide, over the past seven decades, since the inception of the Bretton Woods system. Our analysis uncovers the diverse instruments used to limit cross-border flows and their evolving prevalence over time. The granularity of the new measures we develop enables us to document variations in the use of these instruments across eight categories of restrictions, as well as other key dimensions such as the direction of restricted flows (inflows or outflows), the type of restriction (e.g., price-based versus non-price-based), and the countries' level of economic development. Additionally, we explore the motivations articulated by policymakers for adopting specific restrictions and quantify the real effects of these measures using the new high-frequency data.
Optimal Interest Rate Tightening with Financial Fragility [IMF WP] [SSRN]
with Damien Capelle. April 2025.
Recent evidence has highlighted the financial stability implications of interest rate tightening. We develop a tractable model in which intermediaries face occasionally binding leverage constraints and endogenous risks of runs, while producers face price adjustment frictions. Interest rate tightening, by lowering asset prices, exacerbates both financial distortions when intermediaries' equity is sufficiently low. We use the model to jointly characterize optimal (Ramsey) interest rate policy, credit policy, equity injections, macroprudential policy, and deposit insurance during periods of financial fragility. If non-interest rate tools were costless, the right combination of tools could perfectly separate financial stability from price stability objectives. When these tools are costly, interest rate tightening should be less aggressive and, in the face of run risks, adopt a risk-management approach. The optimal mix of policies depends on the degree of financial fragility, the cost and the effectiveness of non-interest rate tools.
Macroeconomic Attention and Expected Returns [Slides]
with Eugene Larsen-Hallock. October 2024.
We construct a novel text-based measure of firm-level attention to macroeconomic conditions and document that stocks associated with higher macroeconomic attention earn lower returns. Moving from the bottom decile to top decile of macroeconomic attention decreases a stock’s average return by 11.6% per year. We propose a risk-based explanation in which stocks with higher macroeconomic attention contribute less idiosyncratic cash flow risk to the investor’s portfolio, hence earn lower expected returns. Decomposing the unexpected returns of macroeconomic attention-sorted portfolios into cash flow and discount rate news, we find that portfolios with higher macroeconomic attention stocks have lower cash flow risk.
Covid-19: Testing Inequality in New York City [Article] [NBER WP] [Slides]
with Stephanie Schmitt-Grohé and Martín Uribe. April 2020.
Covid Economics, Issue 8, April 2020
Motivated by reports in the media suggesting unequal access to Covid-19 testing across incomes, we analyze zip-code level data on the number of Covid-19 tests, test results, and income per capita in New York City. We find that the number of tests administered is evenly distributed across income levels. In particular, the test distribution across income levels is significantly more egalitarian than the distribution of income itself: The ten percent of the city's population living in the richest zip codes received 11 percent of the Covid-19 tests and 29 percent of the city's income. The ten percent of the city's population living in the poorest zip codes received 10 percent of the tests but only 4 percent of the city's income. At the same time, we find significant disparity in the fraction of tests that come back negative for the Covid-19 disease across income levels: moving from the poorest zip codes to the richest zip codes is associated with an increase in the fraction of negative Covid-19 test results from 38 to 65 percent.
Timor-Leste 2025 Article IV Consultation [Press Release]
Navigating Trade-Offs between Price and Financial Stability in Times of High Inflation [IMF Staff Discussion Note 2025/003] [SUERF Brief] with Romain Bouis, Damien Capelle, Giovanni Dell'Ariccia, Christopher Erceg, Maria Soledad Martinez Peria, Mouhamadou Sy, Jerome Vandenbussche.