Selected Publications
Uncertainty Shocks in an Intangible Economy Journal of Economic Dynamics and Control
State-owned Enterprises and Entrusted Lending: Economic Growth and Business Cycles in China Economic Inquiry
Re-examining the international spillovers: an Asian perspective (with Georgios Magkonis and Simon Rudkin) International Review of Economics and Finance
Optimal central banking policies: Envisioning the post-digital yuan economy with loan prime rate-setting (with King Yoong Limand Chunping Liu) Emerging Markets Review
Informal economy and Central bank digital currency (with Eun Young Oh) Economic Inquiry
Wiley Research Headline September/2022 -- Topical Evidence Article
Mitigating economic volatility: When building efficient financial markets should supersede conventional economic policy (with M. Emranul Haque and Paul Middleditch) Journal of Government and Economics
Recession and Recovery from the Pandemic (with Lester Hunt and Anqi Zhang) Research in Globalization
Optimal fiscal management in an economy with resource revenue-financed government-linked companies (with King Yoong Lim) International Journal of Finance and Economics
Book Chapters
Working Papers
Corporate Tax Policies and Intangible Investment (with Lin Lang)
abstract: This paper studies how corporate taxation affects intangible investment and its implications for the transmission of corporate tax policy. Using U.S. firm-level data, we document that corporate tax shocks not only affect intangible investment through both intensive and extensive margins, but also shape capital composition. To interpret these findings, we develop a tractable heterogeneous-agent DSGE model in which firms produce both tangible and intangible goods, with the latter subject to idiosyncratic fixed costs. The model suggests that intangible investment acts as an amplification channel for corporate tax policy, consistent with the empirical evidence that firms actively adjusting intangible capital exhibit stronger output responses to corporate tax shocks. Our results highlight the important role of corporate tax policy in shaping both investment dynamics and the transition toward an intangible economy.
On the Macroeconomic Effects of Shadow Banking Development (With Georgios Magkonis and Eun Young Oh)
abstract: We build and estimate a dynamic stochastic general equilibrium model with risky innovation and shadow credits to study the macroeconomic implications of shadow banking (SB), particularly on productivity. Our analysis is motivated by negative relationships between SB development and innovation outcome or total factor productivity (TFP) growth. In our model, information asymmetry associated with technology utilization leads to an agency problem in which shadow intermediation reduces banks’ incentives to screen project quality. An SB boom crowd-out traditional financial services, decreases innovation quality and technology efficiency, and thereby reduces TFP. In the light of model mechanisms, we analyse cross-country differences and deliver important implications of SB. SB development mainly driven by financial factors (e.g., the US case) leads to significant loss on TFP while that relatively prompted by real-sided factors (e.g., China and the EA cases), could be less harmful.
International Transmission of Uncertainty Shocks in Emerging Economies (with Georgios Magkonis and Tapas Mishra)
abstract: Uncertainty shocks have natural spatial spillover attributes. This paper investigates the international transmission of economic uncertainty, focusing on emerging market economies (EMEs). Based on a monthly panel VAR model, we find that domestic uncertainty in EMEs causes stagflation effects that propagate to other EMEs through international trade linkages, leading to recession and net capital outflows. A two-country DSGE model is developed to further explore these dynamics, highlighting the significant role of trade integration in amplifying the spillover effects. We also examine the impact of capital account liberalization, finding that inflow liberalization can mitigate the adverse effects of uncertainty shocks in the medium to long term. This study contributes to the literature by focusing on uncertainty shocks originating from EMEs and their international implications, providing insights into the macroeconomic consequences of trade integration and financial liberalization.
Work in Progress