WORKING PAPERS
'Capital Deaccumulation and the Large Persistent Effects of Financial Crises.' Job Market Paper. (abstract)
Presented at the 2015 MMF Research Group, Fall 2015 Midwest Macro Meeting.
WORKS IN PROGRESS
'Entrepreneurship, Agency Frictions and Redistributive Capital Taxation', with Corina Boar. (abstract)
'Job Destruction and Persistent Employment Slumps.'
Empirical DSGE models frequently account for the large and persistent movements in employment seen in the data by relying on persistent shocks to the disutility of working, the causes of which are unclear. Instead, I am developing a model with working capital constraints and search frictions in labour markets, where sizable and persistent fluctuations in employment occur as a result of TFP shocks and other shocks to labour demand. In the model, as in US data, I distinguish between job creation and destruction on the one hand, and hiring and separations on the other. Contractionary TFP shocks lead to a spike in job destruction, but much less movement in the separation rate, roughly consistent with the pattern in US recessions, because firms destroy jobs by not hiring workers to replace those who leave. Working capital constraints amplify the spike in job destruction during the recession and help prevent a significant boom in job creation afterwards, making the recovery of employment more sluggish. The distinction between job creation and hiring contributes greatly to the slowness of the recovery because, while many firms hire every year, firms create new jobs much less frequently. I expect the model also to produce a large multiplier from increases in public employment, and, in an extension with nominal rigidities, to produce persistent decreases in employment following a monetary contraction.
'Semi-Voluntary Unemployment, Wage Rigidity and Cyclical Fluctuations.' (abstract)
'Price Norms, Higher-Order Beliefs and Macroeconomic Fluctuations.' (abstract)
'Capital Deaccumulation and the Large Persistent Effects of Financial Crises.' Job Market Paper. (abstract)
Presented at the 2015 MMF Research Group, Fall 2015 Midwest Macro Meeting.
WORKS IN PROGRESS
'Entrepreneurship, Agency Frictions and Redistributive Capital Taxation', with Corina Boar. (abstract)
'Job Destruction and Persistent Employment Slumps.'
Empirical DSGE models frequently account for the large and persistent movements in employment seen in the data by relying on persistent shocks to the disutility of working, the causes of which are unclear. Instead, I am developing a model with working capital constraints and search frictions in labour markets, where sizable and persistent fluctuations in employment occur as a result of TFP shocks and other shocks to labour demand. In the model, as in US data, I distinguish between job creation and destruction on the one hand, and hiring and separations on the other. Contractionary TFP shocks lead to a spike in job destruction, but much less movement in the separation rate, roughly consistent with the pattern in US recessions, because firms destroy jobs by not hiring workers to replace those who leave. Working capital constraints amplify the spike in job destruction during the recession and help prevent a significant boom in job creation afterwards, making the recovery of employment more sluggish. The distinction between job creation and hiring contributes greatly to the slowness of the recovery because, while many firms hire every year, firms create new jobs much less frequently. I expect the model also to produce a large multiplier from increases in public employment, and, in an extension with nominal rigidities, to produce persistent decreases in employment following a monetary contraction.
'Semi-Voluntary Unemployment, Wage Rigidity and Cyclical Fluctuations.' (abstract)
'Price Norms, Higher-Order Beliefs and Macroeconomic Fluctuations.' (abstract)
