Publications
The Dynamics of Large Inflation Surges
(with Andrés Blanco and Pablo Ottonello )
We empirically characterize episodes of large inflation surges that have been observed worldwide in the last three decades. We document four facts. (1) Inflation following surges tends to be persistent, with the duration of disinflation exceeding that of the initial inflation increase. (2) Surges are initially unexpected but followed by a gradual catch-up of average short-term expectations with realized inflation. (3) Long-term inflation expectations tend to exhibit increases that persist throughout disinflation. (4) Policy responses are characterized by hikes in nominal interest rates but no tightening of real rates or fiscal balances. Our findings highlight the challenges monetary authorities face in avoiding persistent inflation dynamics and anchoring expectations following large inflation surges.
Conditionally accepted at Review of Economics and StatisticsDownload NBER working paper: here
Working Papers
Commuting and the Value of Marriage
Over time, as metro-areas sprawled to the suburbs, long commutes became common. In this paper I combine motivating evidence with a structural model to show how housing policies resulting in long commutes affect singles differently than couples (and men differently than women), if evaluated in a joint housing and marriage market equilibrium. First, I show that the gender gap in commuting among singles is negligible. Second, men in couples (not women) have much longer commutes than single men, and residential choice cannot explain this difference. This suggests that commuting features gains from specialization harnessed within couples, allowing men to take better jobs. I embed this feature in a quantitative spatial model with endogenous marriage and location choices that successfully captures the commuting and location patterns by marital status. In equilibrium, gains from specialization in commuting have the following implications: as metro areas expand in the model, commuting increases most for men in couples and employment falls most for women in couples, widening gender gaps in both outcomes. However, in terms of welfare it is singles who lose the most. Couples are able to partially evade commuting costs through specialization, lower housing costs and redistributing resources within the household.
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Did the Baby Boom Cause the US Divorce Boom?
The United States experienced two major demographic 'booms' during the second half of the twentieth century, in births after the second world war and in divorces 25 years later. This paper argues that the two booms are linked. As the baby-boom generations were entering marriageable age, men in previous cohorts were faced with exceptionally good remarriage prospects motivating them to rematch. The cohorts who ultimately divorced most were the ones with the biggest increase in remarriage opportunities for men. Using cross-state variation in the size of the baby-boom, I show that marriages in the pre-boom generations were more likely to divorce the bigger the relative supply of young women. This conclusion is robust to instrumenting the size of the baby-boom with WWII mobilization rates. Lastly, I construct a simple dynamic marriage market model which can generate a divorce boom caused by a baby-boom and can account for between a fifth and a third of the rise in divorces in the 1970s.
Submitted.
2020: The Outstanding Third Year Paper Award
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Housing Market Channel of Monetary Policy: the Role of Residents in Their 50s
The response of housing demand to changes in interest rates is a key mechanism of monetary policy. This paper shows that the effect of monetary policy shocks, identified through high-frequency event studies, on housing demand depends on the age-structure of the market. Both across U.S. metro areas and across states, local housing prices drop more after monetary policy tightens whenever the share of population between 50 and 65 years of age is higher. If the share of population in a metro area 50-55 years old increases by one percentage point, a one standard deviation monetary policy shock depresses housing prices by an additional 0.413 percent after 3 quarters. A stronger investment motive in the demand for real estate by this age group is a possible mechanism. I show that this differential reaction of housing prices is already detectable by the quarter of the shock, and is followed by a differential response in employment starting about four quarters after the shock.
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Financial Constraints and Capital-Labor Substitution in Response to Monetary Policy
(with Hanna Onyshchenko)
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Returns to housing by age
(with Dena Lomonosov)
Policy writing
RSQE U.S. Economic Outlook. Quarterly publication: 2020/08-2023/08.
(with Gabriel Ehrlich and Daniil Manaenkov )
Latest forecast avaialble at: RSQE website
