Publication
"Minimum Wage and Employment: A Regional and Sectoral Perspective", with Jiaxiong Yao, IMF Working Paper Volume 2025: Issue 241
Working Papers
"Amplification and Policy Responses with Income-Based Versus Asset-Based Borrowing Constraints" (Job market paper)
Abstract: Economies regularly experience episodes during which a significant fraction of agents are borrowing constrained. These constraints give rise to amplification effects, which occasionally generate aggregate demand shortages. This paper analyzes amplification effects in a stylized model with both asset- and income-based borrowing constraints and investigates how macroeconomic stabilization policy can redress the amplification effects. Income-based borrowing amplifies shocks to net worth when there is an aggregate demand shortage. Asset-based borrowing amplifies shocks to asset prices. Fiscal policy improves the welfare of borrowers and undermines that of lenders when there is no aggregate demand shortage, but can lead to a Pareto improvement when aggregate demand externalities are large. Liquidity operations can lead to a Pareto improvement independent of whether there is an aggregate demand shortage. If both types of borrowing constraints are present, taxing lenders to subsidize the asset-constrained agents rather than the income-constrained agents can improve welfare more. With either type of borrowing constraint, a macroprudential tax on debt issuance combined with a lump-sum transfer between borrowers and lenders will result in constrained efficient allocations.
"International Currency Status: A Perspective from Foreign Currency Debt Issuance"
Abstract: The international currency status of the dollar and the euro underwent significant changes after the Great Financial Crisis. This paper finds the rise of the dollar and the fall of the euro in foreign currency debt issuance in international capital markets by countries whose sovereign currencies are neither the U.S. dollar nor the euro after the Great Financial Crisis. This overall trend is not seen in the evolution of short-term debt but long-term debt, and the widened gap between dollar debt and euro debt is most pronounced for debt issued by the financial sector and by Emerging Market Economies. A recursive VAR analysis shows the rise of the dollar and the fall of the euro because of growing safe asset demand as the dollar appreciates; and of more issuance of dollar debt by firms in Advanced Economies seeking lower financing cost as yield differential shrank, which reduced euro debt issuance by both the financial and non-financial sectors in Advanced Economies and Emerging Market Economies.
Policy Work
"Potential Growth -- Adjusting to Aging", with Gee Hee Hong, Selected Issues Paper in IMF Country Report No. 25/202, 2025
“Will This Time Be Different? Italy’s Resilience in the Aftermath of the Recent Sequential Crises”, with Aidyn Bibolov, Selected Issues Paper in IMF Country Report No. 24/241, 2024
Italy Staff Report for the 2024 Article IV Consultation, IMF Country Report No. 24/240, 2024