Search Results
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
60% of District's Jobs Could Face Automation in the Next 20 Years
Jobs in the St. Louis Fed?s District face a higher risk of automation than do jobs nation-wide. Smaller MSAs in the District will face bigger impact.
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 ...
Journal Article
The Global Decline of the Natural Rate of Interest and Implications for Monetary Policy
A low natural rate of interest in normal times may call for unconventional policy in recessions.
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.
Working Paper
Customer Capital, Markup Cyclicality, and Amplification
This paper studies the importance of firm-level price markup dynamics for business cycle fluctuations. Using state-of-the-art IO techniques to measure the behavior of markups over the business cycle at the firm level, I find that markups are countercyclical with an average elasticity of -1.1 with respect to real GDP. Importantly, I find substantial heterogeneity in markup cyclicality across firms, with small firms having significantly more counter-cyclical markups than large firms. Then, I develop a general equilibrium model by embedding customer capital (due to deep habits as in Ravn, ...
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?
Journal Article
Price Markups for Small and Large Firms Over the Business Cycle
In this essay, I measure markup behaviors at the firm level (as opposed to the aggregate level usually measured in the literature). I use firm-level data in manufacturing sectors of France from the Bureau van Dijk (BvD) Amadeus dataset. I focus on the manufacturing sector because it suits the estimation of production functions.
Journal Article
Mapping the U.S. Production Network: Identifying Hub Industries
Identifying key suppliers and buyers could help identify the cause of certain economic downturns.
Journal Article
Firms’ Price-Markup Dynamics During the Great Recession
The customer capital model is consistent with Great Recession markup dynamics.