My areas of research are business cycles and fiscal policy. I am currently working on research that looks at how changes in repatriation tax policy effect
firm behavior, and research that looks at the effects of the American Recovery and Reinvestment Act of 2009 on the U.S. Economy.
Abstract: We present a model of a multinational firm to quantify the effects of policy changes in repatriation tax rates.
The framework captures the dynamic responses of the firm from the time a policy change is anticipated through its enactment, including
its long-run effects. We find that failing to account for anticipatory behavior surrounding a reduction in repatriation tax rates
overstates the amount of profits repatriated from abroad and underestimates tax revenue losses. We further show that policy changes
have a relatively small impact on hiring and investment decisions if firms have relatively easy access to credit markets -- as is the
case for most multinational firms. Finally, by altering the relative price of holding assets abroad, news of a future reduction in
repatriation tax rates acts as an implicit tax on repatriating funds today. We capture and quantify this "shadow tax."
Schools and Stimulus, with Bill Dupor, Federal Reserve Bank of St. Louis Review , Second Quarter 2020, Vol. 102-2.
Abstract: This article analyzes the impact of the education funding component of the American Recovery and Reinvestment Act of 2009 (Recovery Act) on public school districts.
We use cross-sectional differences in district-level Recovery Act funding to investigate the program’s impact on staffing, expenditures, and debt accumulation. To achieve identification,
we use exogenous variation across districts in the allocations of Recovery Act funds for students with special needs. We estimate that 1 million dollars in grants to a district had the
following average effects: Expenditures increased by 570,000 dollars, employment changed little to none, and debt increased by 370,000 dollars. Moreover, 70 percent of the increase in
expenditures was in the form of capital outlays. Next, we build a dynamic, decision-theoretic model of a school district’s budgeting problem, which we calibrate to district-level expenditures
and staffing data. The model can qualitatively match the employment and capital expenditure responses from our regressions. We also use the model to conduct policy experiments.
Inflation and the Evolution of Firm-Level Liquid Assets, with Chadwick C. Curtis and Julio Garin, Journal of Banking and Finance, August 2017, pp.24-35.
Abstract: This paper shows that inflation has been an important determinant of firm-level liquid asset holdings. Liquid assets as a
share of total assets – the cash ratio – for U.S. corporations steadily declined from the 1960s to the early 1980s, and has
since steadily increased. Our empirical analysis finds that inflation is a key factor accounting for these changes. We show
that these liquid asset holdings are imperfectly hedged against inflation. Hence, changes in inflation alter the real value
of a firm’s liquid asset portfolio causing them to readjust these balances.
Uncertainty Shocks in a Model with Mean-Variance Frontiers and Endogenous Technology Choices, Journal of Macroeconomics, September 2016, pp.71-98.
Abstract: This paper builds a model to show how increases in aggregate uncertainty – an uncertainty shock – can generate recessions.
Uncertainty shocks in the model are able to both account for a significant portion of business cycle fluctuations observed in data and generate
positive comovements between output, consumption, investment, and hours. The key assumption of the model is that firm managers endogenously choose
what projects to undertake and that the menu of these projects lies on a positively sloped mean-variance frontier – high-return projects are also
high-risk projects. In times of high aggregate uncertainty, managers choose to undertake low-risk projects, and thus low-return projects, which in
turn leads to a recession. Moreover, the model also matches various stylized facts about time series and cross-sectional variations in TFP and
suggests shortcomings in using TFP data to calculate exogenous TFP shocks.
The 2009 Recovery Act: Stimulus at the Extensive and Intensive Labor Margins, with Bill Dupor, European Economic Review, June 2016, pp.208-228.
Abstract: This paper studies the effect of government stimulus spending on a novel aspect of the labor market: the differential impact
of spending on the total wage bill versus employment. We analyze the 2009 Recovery Act via instrumental variables using a new instrument, the
spending done by federal agencies that were not instructed to target funds towards harder hit regions. We find a moderate positive effect on jobs
created/saved (i.e., the “extensive margin”) and also a significant increase in wage payments to workers whose job status was safe without Recovery
Act funds (i.e., the “intensive margin”). Our point estimates imply that roughly one-half of the wage payments resulting from the act were paid at
the intensive margin. To provide a theoretical underpinning for the estimates, we build a micro-founded dynamic model in which a firm meets new
government demand with a combination of new hiring and increasing existing workers׳ average hours. Faced with hiring costs and an overtime premium,
the firm responds by increasing hours along both margins. Our model analysis also provides insight into how government spending policy should be
structured to lower the cost of generating new jobs. Finally, we catalogue survey evidence from Recovery Act fund recipients that reinforces the
importance of the intensive labor margin.
The Analytics of Technology News Shocks, with Bill Dupor, Journal of Economic Theory, September 2014, pp.392-427.
Abstract: This paper constructs several models in which, unlike the standard neoclassical growth model, positive news about future technology
generates an increase in current consumption, hours and investment. These models are said to exhibit procyclical news shocks. We find that all models
that exhibit procyclical news shocks in our paper have two commonalities. There are mechanisms to ensure that: (I) consumption does not crowd out investment,
or vice versa; (II) the benefit of forgoing leisure in response to news shocks outweighs the cost. Among the models we consider, we believe, one model holds
the greatest potential for explaining procyclical news shocks. Its critical assumption is that news of the future technology also illuminates the nature of
this technology. This illumination in turn permits economic actors to invest in capital that is forward-compatible, i.e. adapted to the new technology. On
the technical side, our paper reintroduces the Laplace transform as a tool for studying dynamic economies analytically. Using Laplace transforms we are able
to study and prove results about the full dynamics of the model in response to news shocks.
Abstract: We use regional variation in the American Recovery and Reinvestment Act (2009-2012) to analyze the effect of government spending on consumer spending. Our consumption data
come from household-level retail purchases in the Nielsen scanner data and auto purchases from Equifax credit balances. We estimate that a $1 increase in county-level government spending
increases local non-durable consumer spending by $0.29 and local auto spending by $0.09. We translate the regional consumption responses to an aggregate fiscal multiplier using a multi-region,
New Keynesian model with heterogeneous agents, incomplete markets, and trade linkages. Our model is consistent with the estimated positive local multiplier, a result that distinguishes our
incomplete markets model from models with complete markets. At the zero lower bound, the aggregate consumption multiplier is twice as large as the local multiplier because trade linkages
propagate government spending across regions.
Abstract: New vehicle sales in the U.S. fell nearly 40 percent during the past recession, causing significant job losses and
unprecedented government interventions in the auto industry. This paper explores three potential explanations for this decline: increasing oil
prices, falling home values, and falling household income expectations. First, we use the historical macroeconomic relationship between oil prices
and vehicle sales to show that the oil price spike explains roughly 15 percent of the auto sales decline between 2007 and 2009. Second, we
establish that declining home values explain only a small portion of the observed reduction in household new vehicle sales. Using a county-level
panel from the episode, we find (1) a one-dollar fall in home values reduced household new vehicle spending by 0.5 to 0.7 cents and overall new vehicle
spending by 0.9 to 1.2 cents and (2) falling home values explain between 16 and 19 percent of the overall new vehicle spending decline. Next, examining
state-level data for 1997-2016, we find (3) the short-run responses of new vehicle consumption to home value changes are larger in the 2005-2011 period
relative to other years, but at longer horizons (e.g. 5 years), the responses are similar across the two sub-periods and (4) the service flow
from vehicles, as measured by miles traveled, responds very little to house price shocks. We also detail the sources of the differences between our
findings (1) and (2) from existing research. Third, we establish that declining current and expected future income expectations potentially played
an important role in the auto market's collapse. We build a permanent income model augmented to include infrequent repeated car buying. Our calibrated
model matches the pre-recession distribution of auto vintages and the liquid-wealth-to-income ratio, and exhibits a large vehicle sales decline in
response to a mild decline in expected permanent income due to a transitory slowdown in income growth. In response to the shock, households delay
replacing existing vehicles, allowing them to smooth the effects of the income shock without significantly adjusting the service flow from their
vehicles. Augmenting our model with a richer set of household expectations allows us to match 65 percent of the overall new vehicle spending decline
(i.e. roughly the portion of the decline not explained by oil prices and falling home values). Combining our negative results regarding housing
wealth and oil prices with our positive model-based findings, we interpret the auto market collapse as consistent with existing permanent income based
approaches to durable goods purchases (e.g., Leahy and Zeira (2005))
Work in Progress
Small Fixed Costs and Countercyclical Aggregate Volatility
Is Offshoring to Blame for Jobless Recoveries? , with Manisha Goel.
University of Richmond
Full List of Courses
ECON 102: Principles of Macroeconomics
ECON 242: Introduction to Computing Techniques for Economics & Business
ECON 272: Macroeconomic Theory
ECON 341: Mathematical Economics
ECON 372: Advanced Macroeconomics
The Ohio State University
Independent (Full Responsibility)
ECON 200: Principles of Microeconomics
ECON 201: Principles of Macroeconomics
ECON 502.01: Intermediate Macroeconomic Theory
ECON 502.02: Intermediate Macroeconomic Theory (Calculus Based Version)
ECON 520: Money and Banking
ECON 200: Principles of Microeconomics
ECON 700: Advanced Mathematical Techniques in Economics (Graduate Course)
ECON 704: Survey of Microeconomics (Graduate Course)
ECON 807: Macroeconomic Theory II (Graduate Course)
Math Camp: Mathematics for Economics Workshop (Graduate Course)
ECON 110.02: Basic Economic Concepts: Freakonomics (Grader)
ECON 201: Principles of Macroeconomics (Assistant to Main Instructor)
ECON 556: Cooperation and Conflict in the Global Economy (Grader/Assistant to Main Instructor)
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Department of Economics
Robins School of Business
University of Richmond
1 Gateway Road
Office: Robins School of Business (BUS) 246
Office Hours: Tuesdays 2:00-4:00pm or by appointment