Publications
1. “Welfare housing and household consumption in urban China”, with Yu Li, Kai Liu, Xiaoying Lu and Ben Wang, Journal of Economic Behavior & Organization, 195: 326-334, 2022.
This study investigates the long-term impact of access to welfare housing ownership on household consumption using data from the China Family Panel Studies (2010 to 2018). Our results show that households that owned welfare housing had a higher level of consumption than those without access to such housing, even after controlling for the housing wealth effect. This positive impact on consumption was particularly significant for low-consumption households. We found that welfare housing ownership increased consumption through reducing household debts, enhancing consumer confidence, and facilitating further accumulation of assets.
2. “Inflation’s Role in Optimal Monetary-Fiscal Policy”, with Eric Leeper, Journal of Monetary Economics, 124: 1-18, 2021, lead article.
This paper addresses the optimal marginal source of financing shocks that raise fiscal needs in the presence of a maturity structure for nominal government debt, distortionary taxes, and sticky prices. We find: (1) the importance of innovations in current and expected inflation that revalue debt increases with both the average maturity and the level of debt; (2) an analytical trade off between inflation and output-gap stabilization as a function of debt maturity; (3) at current debt levels and maturity lengths in advanced economies, inflation would account for as much as 50 percent of marginal optimal financing; (4) maturity attenuates welfare losses from nominal rigidities.
3. “Diversity and Inclusion: Evidence from Corporate Inventors”, with Chunfang Cao, Xiaohui Li, Xiaoyang Li, and Cheng Zeng, Journal of Empirical Finance, 64: 295-316, 2021.
Inclusion is often considered a crux of diversity management. However, little is known about how board diversity affects corporate performance through organizational inclusive behavior. Using the inventor-level patenting data, we find that firms with more ethnic minority directors attract more productive ethnic minority inventors and promote greater collaboration among inventors, leading to more patents and patents with greater market value. Our findings are robust to a battery of sensitivity tests. Overall, our study offers new evidence that racially diverse boards cultivate inclusive environment for inventors to succeed.
4. “Autonomy, Incentive, and Trade: How Does Trade Liberalization Reshape Decentralization Decisions in China?”, with Xiaoyang Li, The World Economy, 44(10): 3050-3068, 2021.
This paper studies how trade liberalisation affects the extent of corporate decentralisation using the World Bank enterprise survey in China. In particular, we examine the autonomy of production, investment and employment decision and the incentive compensation of CEOs of subsidiary firms after China's entry in the World Trade Organization (WTO). We show that subsidiary firm CEOs receive more decision autonomy and higher powered incentives when facing increased foreign competition in output market. In contrast, subsidiary CEOs receive less decision autonomy and flat incentive compensation when foreign competition in subsidiaries’ input market intensifies.
5. “Understanding the Interaction of Chinese Fiscal and Monetary Policy”, with Zehua Luan and Xiangyu Man, Journal of Risk and Financial Management, 14(9): 1-13, 2021, lead article.
This paper uses a time-varying-parameter (TVP-VAR) model to study Chinese fiscal–monetary interaction and divides it into two regimes: a monetary dominant regime from 1996Q to 2017Q4 and a fiscal dominant regime from 2018Q1 to 2020Q1. We argue that the relative change of the role between the two policies should be mainly attributed to the variation in the fiscal authority’s characteristics.
6. “Does Brain Drain Lead to Institutional Gain?”, with Xiaoyang Li and John McHale, The World Economy, 40(7): 1454-1472, 2017.
A country's endowment of human capital affects its institutions through various channels. This raises the possibility that skilled emigration can leave its mark on a country's institutional development. We explore the impact of emigrant human capital on home country's institutional quality. Using geographical and genetic distance-based instrumental variables for emigration and a dynamic panel estimation method, we find that human capital emigration helps the home country's political institutions, but hurts economic institutions. The conventional ‘brain drain’ argument, therefore, needs to incorporate the institutional changes due to skilled labour emigration.
In Chinese
1. “From fiscal dominance to monetary policy tools: the switching of China's interest rate determination”, with Jiajun Peng, Fei Wang, Dong Lu, Economic Theory and Economic Management (《经济理论与经济管理》), 41(11): 54-67, 2021.
2. “Central Bank Communication, Adaptive Learning and Monetary Policy Effectiveness”, with Yumei Guo, Economic Research Journal (《经济研究》), 53(4): 77-91, 2018.
Working Papers
1. “Changes in the Composition of Tax Revenues: Implications for Monetary and Fiscal Policy”, with Pedro Gomis-Porqueras and Solmaz Moslehi.
2. “Deep Reinforcement Learning in a Monetary Model”, with Mingli Chen, Andreas Joseph, Michael Kumhof and Xinlei Pan.
3. “Monetary Policy and the Cross-section of Stock Returns in a Market with Distortions”, with Xiaoyang Li and Xiaolin Gong.
4. “Renminbi Settlement for Cross-Border Trade in the Context of Dollar Standard”, with Kai Liu, submitted.
5. “Measuring Australian Financial Market Stress: 1990-2020”, with Pedro Gomis-Porqueras and Romina Ruprecht.