Research
I am a macroeconomist at the University of Notre Dame specializing in the interaction of fiscal and monetary policy. My work incorporates time series econometrics, high-frequency identification, and state-of-the-art heterogeneous agent models. My research thus far examines a nominal GDP monetary policy target at the zero lower bound, the impact the Volcker disinflation had on welfare across the wealth distribution, and how surprise government debt issuance impacts inflation and output.
The Uneven Welfare Costs of the Volcker Disinflation
Revise and Resubmit at JPE: Macro
with Benjamin Pugsley and Hannah Rubinton
Abstract: We use a Heterogeneous Agent New Keynesian (HANK) model to quantify the distribution of welfare gains and losses of the US Volcker disinflation. In the long run households prefer low inflation, but the Volker disinflation requires a transition period characterized by a sharp increase in the real interest rate and unemployment, as well as a redistribution from net nominal borrowers to net nominal savers. We calibrate the model to match the micro and macro moments of the early 1980s high-inflation environment and examine the actual changes in the nominal interest rate and inflation over the Volcker disinflation. While aggregate welfare gains are positive, the effects are highly skewed across households; just over 50 percent would prefer to avoid the disinflation. This share depends negatively on the liquidity value of money, positively on the average duration of nominal borrowing, and positively on the short-run increase in the real interest rate and unemployment.
Taming Volatility: Evaluating an NGDP Target
In Review at JEDC
Abstract: I embed a nominal GDP level target in a Taylor-type rule and compare the volatilities of output, inflation, and the nominal rate to a standard, inflation-target Taylor rule. I demonstrate analytically that the source of the shock matters for relative variances. With an NGDP level target, a productivity shock results in more stable output but more volatile inflation. Cost push shocks and demand shocks result in more stable output and inflation. These results are, with small caveats, confirmed in an estimated quantitative model. Last, I impose a zero lower bound (ZLB) and simulate the model under both targets. An NGDP level target hits the ZLB less often than an inflation target at the cost of longer sessions at the ZLB. Switching to an NGDP level target while at the ZLB leads to quicker economic recovery through the Fed's use of forward guidance.
How Government Debt Shocks Impact the Economy
Job Market Paper
Abstract: I identify exogenous government debt shocks using high-frequency movements in U.S. Treasury futures prices around auction announcements. In a VAR, these shocks raise interest rates across the yield curve, including the federal funds rate, while prices increase, output falls, unemployment rises, and the monetary base shrinks. I interpret these findings as evidence of fiscal dominance and show that a standard monetary-dominant model cannot replicate the empirical impulse responses. In an estimated business cycle model, I find that debt shocks offset part of the disinflation of the 1980s, contributed to growth in the 1990s, and slowed the recovery from the Great Recession.