Research
Publications
The Impact of Monetary Policy Shocks - Do not rule out Central Bank Information Effects or Economic News, (with Italo Santos Morais, Boise State), Economics Letters, Volume 237, April 2024, 111634
Government Spending between Active and Passive Monetary Policy: An Invariance Result, (with Collin Philipps, Air Force Academy), B.E. Journal of Macroeconomics, Online Access
Does the Government Spending Multiplier depend on the Business Cycle? (with Collin Philipps, Air Force Academy), Journal of Money, Credit and Banking, Early Access
Government Spending and Heterogeneous Consumption Dynamics, Journal of Economic Dynamics and Control, Volume 114, May 2020, 103868
Working Paper
Unconventional Monetary Policy and Policy Foresight , (with Andreas-Entony Violaris, University of Illinois), R&R at the Journal of Economic Dynamics and Control
Abstract: What are the effects of unconventional monetary policy interventions on the economy? Empirical studies utilizing traditional SVAR models consistently report expansionary effects on output and prices while considering only a small number of variables. This paper is the first to present both narrative and empirical evidence indicating that these models are susceptible to policy foresight, as central banks frequently announce their unconventional policies months in advance. To address policy foresight, we estimate a Bayesian FAVAR model with an extended set of information for the Euro Area. Consistent with the existing literature, we find that an unconventional monetary policy shock boosts economic activity by increasing industrial production and reducing the unemployment rate. Notably, our estimated effects are both larger and more persistent compared to previous findings. Furthermore, the shock decreases interest rates, interest rate spreads, and government bond yields, leading to an improvement in financial conditions. In a noteworthy departure from previous research, we find significant uncertainty regarding the impacts on consumer and producer prices, highlighting the need for further research.
Monetary Policy Transmission Under Supply Chain Pressures, (with Matthew Schaffer, EMU), Under Review
Abstract: This study examines how global supply chain conditions influence the transmission of US monetary policy during the pre-pandemic period. We find that elevated supply chain pressures amplify the standard effects of monetary policy shocks on macroeconomic outcomes. This amplification arises from an intensification of the credit channel, as financial variables related to the cost of external finance become more sensitive to monetary policy when supply chain conditions are strained. Firm-level estimates of the investment response to monetary policy further support this conclusion. Despite the presence of outliers and other confounding factors, our findings hold when extending the sample beyond March 2020.
Abstract: The COVID-19 pandemic has created an unprecedented economic environment marked by extensive disruptions in global supply chains and soaring inflation rates. This paper studies the impact of supply chain disruptions on consumer price inflation and examines how the effect varies across time and countries. The results uncover that a global supply chain shock significantly raises consumer price inflation in the US, the Euro Area, and the UK. Notably, the effect is consistently positive, even before the COVID-19 pandemic, with the strongest impact occurring in the US and the mildest in the UK. Furthermore, this study finds that global supply chain shocks are important drivers of consumer price inflation in all three countries, accounting for 15 – 30 percent of the variation of consumer price inflation over a three-year horizon.