Research

Publication


Multinational Firms' Sourcing Decisions and Wage Inequality: A Dynamic Analysis (Journal of Economic Dynamics and Control, Volume 146, January 2023, 104554.) Working Paper Version




Work in Progress

Structural Change and Aggregate Volatility (with Xinle Pang)  

Abstract: This paper investigates the implications of structural change on aggregate volatility. By utilizing data sourced from the County Business Patterns, we establish that aggregate volatility within the U.S. has experienced a decline. We assess the contributions of both within- and between-sector channels to the decline in aggregate volatility. This paper highlights that structural transformation plays a pivotal role in influencing both channels. For the between-sector channel, structural transformation reallocates resources from the more volatile tradable sector to the less volatile non-tradable sector, consequently reducing aggregate volatility. As for the within-sector channel, the reallocation of resources towards the non-tradable sector mitigates firm-level idiosyncratic shocks due to increased entry of firms, thus diminishing aggregate volatility when the firm-size distribution exhibits a fat tail. Simulations conducted using an illustrative multi-sector trade model, incorporating both aggregate and idiosyncratic firm-level shocks, validate the mechanisms we propose.


Financial Regulation and Income Inequality (with Camilo Granados)