Dissecting Trade and Business Cycle Co-movement (Job Market Paper)

What role does international trade play in generating international business cycles? While we observe that country-pairs that trade more exhibit greater co-movement of business cycles, previous research has failed to quantify the role of trade in transmitting shocks across countries, and to identify the key shock(s) that create international business cycle synchronization. To address this question, I develop a multi-country international real business cycle model with trade that incorporates multiple shocks that fully account for movements in GDP in which the shocks completely describe the data between 1992 to 2017. Calibrating the model to a panel of 10 countries, I show that eliminating trade between countries does not materially affect the co-movement of cross-country business cycles, and openness to trade only accounts for 60% of the co-movement. Moreover, I find that the volatility in bilateral trade, which is manifested as time-varying bilateral trade frictions, explains the rest of the synchronization of business cycles, while other country-specific shocks play relatively minor roles in shock propagation. These findings suggest that shocks that can generate volatility in trade should be accounted for in order to capture business cycle co-movement. Therefore, to better understand the global synchronization of business cycles requires gaining insight into capturing shocks that affect bilateral trade fluctuations, which has not been studied a lot in an open-economy framework.


Controlled School Choice with Mixed Bounds Approach: A Balance between Stability and Diversity Considerations (B.S. thesis at Carnegie Mellon University)

Controlled school choice over public schools has been an important concern for both the parents of students and schools. It gives numerous options for how fairness and diversity considerations can be balanced. The notion of diversity is often imposed by limiting the number of admitted students who have the same type (quotas), or by reserving seats for each student type (reserves). The controlled school choice rule that we explore in this paper is the combination of “reserves” and “quotas,” where schools implement minimum reserves (a soft bound) and maximum quotas (a hard bound) together. In this paper, I provide a full characterization of the mixed bounds approach, and show that it satisfies the requirements for the existence of a student-optimal stable matching.