Mortgage Prepayment and Path-Dependent Effects of Monetary Policy (with David Berger, Konstantin Milbradt and Fabrice Tourre; updated October 2020). Revise and Resubmit at American Economic Review
Fixed rate mortgages lead to path-dependent consequences of monetary policy and likely headwinds for potential stimulus over the next several years
Coverage: New York Times, Bloomberg
The Rise of Niche Consumption (with Brent Neiman) Updated December 2019.
We empirically document a rise in “niche consumption” (diverging household and aggregate product concentration trends), develop a model to speak to this rise and argue it implies substantial welfare gains from increasing product selection.
Coverage: Planet Money, New York Times, Bloomberg, Marginal Revolution Blog
Covid-Related Policy Notes
Consumption Effects of Unemployment Insurance During the Covid-19 Pandemic (with Diana Farrell, Peter Ganong, Fiona Greig, Max Liebeskind, and Pascal Noel)
Using JPMorgan Chase bank account data, we show that expanded UI during the pandemic has propped up spending of unemployed household substantially.
Childcare Obligations Will Constrain Many Workers When Reopening the US Economy
We calculate what share of workers face childcare constraints if schools and daycares remain closed after covid
US Unemployment Insurance Replacement Rates During the Pandemic (with Peter Ganong and Pascal Noel; updated August 2020). Replication Code
Journal of Public Economics, Volume 191, 2020
Using microdata and each state’s UI benefits system we show the median UI statutory replacement rate from April-July 2020 is 145% and 3/4 of workers have replacement rates > 100%.
Coverage: 538, Washington Post Editorial, NPR (May 26), WSJ Editorial, Washington Post, CBS, ABC, NYT, NPR (July 27), NYT Infographic, Chicago Tribune, Financial Times, CNBC, WSJ
Initial impacts of the pandemic on consumer behavior: Evidence from linked income, spending, and savings data (with Natalie Cox, Peter Ganong, Pascal Noel, Arlene Wong, Diana Farrell, and Fiona Greig)
Brookings Papers on Economic Activity, June 2020
Using household data on millions of US bank accounts, we show that spending across the income distribution fell dramatically and savings grew early in the pandemic. Since mid April, spending and savings have grown more rapidly for the poor, suggesting a key role for government stimulus.
Shocks vs. Responsiveness: What Drives Time-Varying Dispersion? (with David Berger)
Journal of Political Economy, Volume 127, Issue 5, October 2019. Online Appendix
What drives countercyclical dispersion? Greater volatility of shocks or greater response to shocks of the same size? We use BLS micro data + exchange rate shocks to provide identification and argue for the importance of time-varying responsiveness.
House Prices, Local Demand and Retail Prices (with Johannes Stroebel)
Journal of Political Economy, Volume 127, Issue 3, June 2019. Online Appendix | Replication Code
We provide evidence from microdata that wealth increases lead to reduced shopping effort by households and that firms respond by raising markups.
Regional Heterogeneity and the Refinancing Channel of Monetary Policy (with Martin Beraja, Andreas Fuster and Erik Hurst).
Quarterly Journal of Economics, Volume 134, Issue 1, February 2019. Replication Code
We use loan level data + a quantitative model to argue that the time-varying distribution of home equity matters for monetary policy through a refinancing channel.
House Prices and Consumer Spending (with David Berger, Veronica Guerrieri, and Guido Lorenzoni)
Review of Economic Studies, Volume 85, Issue 3, July 2018. Online Appendix | Replication Code
We show consumption response to house price movements in realistic consumption models are large, in contrast to the common view that theory implies small responses and provide intuition using a simple “rule-of-thumb”.
Dynamics of the U.S. Price Distribution (with David Berger)
European Economic Review. Volume 103, April 2018. Replication Code
We use CPI, PPI and IPP micro data to document time-variation in the distribution of price changes. Fitting a simple model to this data implies greater price flexibility during recessions.
Regional Redistribution through the U.S. Mortgage Market (with Erik Hurst, Ben Keys and Amit Seru)
American Economic Review. Volume 106, No. 10, Oct 2016. Online Appendix | Replication Code
We show GSE mortgage rates do not vary with local default risk while private mortgage rates do. The constant rate transfers money from regions with low risk to those with high risk.
Consumption Dynamics During Recessions (with David Berger)
Econometrica. Volume 83, No. 1, Jan 2015. Supplemental Appendix
We use indirect inference to estimate a household model of durable consumption with fixed costs of adjustment and show it implies stimulus has smaller effect during recessions.
Measuring How Fiscal Shocks Affect Durable Spending in Recessions and Expansions (with David Berger)
American Economic Review: Papers and Proceedings, Volume 104, No. 5, May 2014.
We use STVARs to provide empirical evidence that durable spending responds more strongly to identified government spending shocks during expansions than during recessions.
Inflation Dynamics and Time-Varying Volatility: New Evidence and an Ss Interpretation
Quarterly Journal of Economics, Volume 129, No. 1, Feb. 2014. Supplemental Appendix
I identify new micro pricing facts and show that these facts imply monetary policy faces a worse inflation-output tradeoff during times of high volatility.
Older Working Papers
Time-Varying Phillips Curves
Aggregate price flexibility as measured by the inflation-output tradeoff in an estimated forward looking New-Keynesian Phillips Curve rises with microeconomic volatility.
The Empirical Price Duration Distribution and Monetary Non-Neutrality
Allowing for price adjustment probabilities that vary with duration provides a better fit for observed price spells in micro data and increases monetary non-neutrality substantially.