Working Papers/In Progress

Endogenous Uncertainty and Credit Crunches, with Ludwig Straub

• Accepted at Review of Economic Studies

• We propose a theory of endogenous uncertainty caused by financial distress. Because uncertainty reinforces financial distress, temporary shocks can persistently cut off firms from external funding.

The Colocation Friction: Dual-Earner Job Search and Labor Market Outcomes, with Hanno Foerster

• We characterize when "colocation frictions" are binding in dual-earners’ job search and quantify their implications for career dynamics, migration, worker welfare, and the gender earnings gap. 

Publications

Robust Predictions for DSGE Models with Incomplete Information, with Ryan Chahrour

• AEJ: Macroeconomics, 15(1), January 2023, pp. 173-208

• We derive bounds on the quantitative potential of business cycle models with information frictions. Our bounds are robust across all possible information structures that agents may have. Without (with) micro-level uncertainty, confidence shocks can explain up to 3% (51%) of the U.S. business cycle. 

Mismatch Cycles, with Isaac Baley and Ana Figueiredo

• Journal of Political Economy, 130(11), November 2022, pp. 2943-2984

• We build an equilibrium model of the labor market with directed search, multidimensional sorting, learning about skills, and aggregate shocks. We use the model to study the dynamics of skill mismatch over the business cycle. During recessions, highly mismatched jobs are destroyed but also created. The patterns are consistent with direct evidence from the NLSY79 and O*NET. 

A Quantitative Theory of Political Transitions [Online Appendix], with Lukas Buchheim

• Review of Economic Studies, 87(4), July 2020, pp. 1726-1756

• We develop a quantitative theory of repeated political transitions caused by revolts and reforms. The model generates a process of political transitions that looks remarkably close to the data. 

Dynamic Oligopoly Pricing: Evidence from the Airline Industry, with Caspar Siegert

• International Journal of Industrial Organization, 71, July 2020

• We explore how pricing dynamics in the European airline industry vary with competition and customer heterogeneity. The documented patterns are consistent with intertemporal price discrimination. 

Endogenous Second Moments: A Unified Approach to Fluctuations in Risk, Dispersion and Uncertainty, with Ludwig Straub

• Journal of Economic Theory, 183, September 2019, pp. 625-660.

• We study how first-moment shocks can generate second-moment fluctuations in nonlinear environments. In an application, we show that when production inputs are complements, the cross-sectional dispersion of output, employment and Solow residuals becomes countercyclical — without the usual resort to "volatility shocks". 

Optimal Delegated Search with Adverse Selection and Moral Hazard

• Theoretical Economics, 11(1), January 2016, pp. 253-278.

• I study a model of delegated search. The distribution of search revenues is unknown to the principal and has to be elicited from the agent. Moreover, the search process is unobservable, requiring search to be self-enforcing. The second-best is implemented by a menu of simple bonus contracts.