Search Results
Working Paper
Markup Cyclicality: A Tale of Two Models
Many models in the business cycle literature generate counter-cyclical price markups. This paper examines if the prominent models in the literature are consistent with the empirical findings of micro-level markup behavior in Hong (2016). In particular, I test the markup behavior of the following two models: (i) an oligopolistic competition model, and (ii) a New Keynesian model with heterogeneous price stickiness. First, I explore the Atkeson and Burstein (2008) model of oligopolistic competition, in which markups are an increasing function of firm market shares. Coupled with an exogenous ...
What Are the Fed’s Dollar Swap Lines and FIMA Repos, and Why Do They Matter?
Making it easier for central banks to access U.S. dollars helps calm exchange rate volatility and allow markets and credit lines to operate smoothly.
Journal Article
Factors Behind the Decline in the U.S. Natural Rate of Interest
Longer lives and fewer babies have contributed to a lower natural rate of interest.
Firms Start with Fewer Employees over Last 25 Years
The average new firm that is less than a year old had 20% fewer workers in 2019 than it did in 1994.
Startups Account for Smaller Share of U.S. Jobs
Since 1994, startup firms have seen their share of U.S. employment shrink.
Journal Article
Firms’ Price-Markup Dynamics During the Great Recession
The customer capital model is consistent with Great Recession markup dynamics.
Did the Fed’s Dollar Swap Lines Work?
In March, the Federal Reserve took steps to increase the supply of dollars to foreign markets to ensure liquidity and lessen volatility. Did the policies work?
Working Paper
Capital Gains Taxation and Investment Dynamics
This paper quantifies the long-run effects of reducing capital gains taxes on aggregate investment. We develop a dynamic general equilibrium model with heterogeneous firms, which face discrete capital gains tax rates based on firm size. We calibrate our model by targeting micro moments and a difference-in-differences estimate of the capital stock response based on the institutional setting and policy reform in Korea. We find that the reform that reduced the capital gains tax rates for a subset of firms substantially increased investment in the short run, and capturing general equilibrium ...
Journal Article
How Important Are Production Networks to the U.S. Economy?
As manufacturing grows more sophisticated, industries become more interconnected through production networks.
Journal Article
Moving In, Moving Out: The Migration Pattern of the Eighth District
Education and income differed between those leaving and those entering the District states from 2013-2017.