Research Interests: Macroeconomics, Growth, Firm Dynamics, Entrepreneurship.
( Job Market Paper )
Abstract: An entrepreneur’s ability to save is crucial to mitigating aggregate productivity losses caused by underdeveloped financial markets. Previous studies of this mechanism assume that an entrepreneur’s savings come from income generated by only one firm. In contrast, this paper uses a large, novel dataset from Thailand and, using a legal mandate that Thai households have unique surnames, documents a large share of entrepreneurs with income from multiple firms. They can therefore accumulate wealth from various sources, allowing financially constrained firms that are owned by multi-firm entrepreneurs to grow faster and survive longer than those owned by single-firm entrepreneurs. Motivated by these facts, I develop a tractable model of multi-firm entrepreneurship in the presence of financial frictions and study its impact on aggregate productivity and the allocation of capital. After calibrating to match the salient features of the Thai data, I find that the aggregate productivity loss due to financial frictions would rise from 7% to 21% if entrepreneurs could not own multiple firms.
Abstract: This paper presents empirical evidence on the disagreement among Federal Open Market Committee (FOMC) forecasts. In contrast to earlier studies that analyze the range of FOMC forecasts available in the Monetary Policy Report to the Congress, we analyze the forecasts made by each individual member of the FOMC from 1992 to 1998. This newly available dataset, while rich in detail, is short in duration. Even so, we are able to identify a handful of patterns in the forecasts related to i) forecast horizon; ii) whether the individual is a Federal Reserve Bank president, governor, and/or Vice Chairman; and iii) whether individual is a voting member of the FOMC. Additional comparisons are made between forecasts made by the FOMC and the Survey of Professional Forecasters.
( With Elisa Giannone )
Abstract: In this paper we study the permanent effect on sectoral reallocation of a large temporary demand shock . We exploit the exogenous variation of the EU import ban on black tiger shrimps in Thailand. In May 2002, under heavy concerns that products from Asian countries contained hazardous antibiotics, the European Union banned the imports of shrimps from Thailand. The price of black tiger shrimps plummeted by more than 50% and its production went close to zero within a few years. Using three different sources of data- household from the Townsend Thai Project, provincial and firm-entrepreneur — we investigate the effect of the EU ban on resource reallocation within and across sectors, change in sectoral productivity and welfare gains and losses within Thailand. We find that while the ban was imposed in 2002, only 35% of the entrepreneurs were in the fish/shrimp sector in 2013 and only 36% of the farmers were in the sector in 2008. We find that shrimp farmers experience a loss of of income of $10,500 or 50% of their pre-ban income level. We also find a permanent increase in transition probability to other sectors.
Family Connections in Politics and Firm Dynamics
Abstract: Using parliamentary election data from 2001 to 2011 and firm-level data from Thailand, I examine the effect of political connection in the form of familial ties on private firms. Exploiting close elections as my identification strategy, I compare the performance of family firms whose family members were elected to those whose family members lost. After matching the surnames of each firm’s shareholders and the surnames of members of the parliament, I analyze the benefits of politically connected firms by looking at the change in capital growth rate, leverage and net worth. I then investigate if these benefits differ when firms connected to the elected are not located in the winning municipality.
( With Michael W. McCracken )
Federal Reserve Bank of St. Louis Review , January/February 2011, pp. 49-66
Abstract: This paper presents empirical evidence on the efficacy of forecast averaging using the ALFRED (ArchivaL Federal Reserve Economic Data) real-time database. The authors consider averages over a variety of bivariate vector autoregressive models. These models are distinguished from one another based on at least one of the following factors: (i) the choice of variables used as predictors, (ii) the number of lags, (iii) use of all available data or only data after the Great Moderation, (iv) the observation window used to estimate the model parameters and construct averaging weights, and (v) the use of either iterated multistep or direct multistep methods for forecast horizons greater than one. A variety of averaging methods are considered. The results indicate that the benefits of model averaging relative to Bayesian information criterion-based model selection are highly dependent on the class of models averaged The authors provide a novel decomposition of the forecast improvements that allows determination of the most (and least) helpful types of averaging methods and models averaged across.
( With Kathryn Graddy )
Journal of Cultural Economics , (2011) 35(2), pp. 81-100
Abstract: The Droit de Suite, known in the UK as Artists’ Resale Rights, provides an artist with the inalienable right to receive a royalty based on the resale price of an original work of art. This paper provides an empirical analysis of actual changes in the UK auction market for art that is newly subject to the Droit de Suite (DDS) because of a change in law. All changes are measured relative to changes for art not subject to the DDS and relative to changes in the auction markets for art in countries where there has been no change in law. We do a difference-in-difference analysis, differencing price growth and sales growth across market segments and across countries over the period 1993–2007. Our results suggest that the introduction of the DDS has not had a consistent negative impact on the UK art auction market during the period of study.
Journal of Health Economics, (2010) 29(4), pp. 557-574
Abstract: We examine the effect of exposure to a set of toxic pollutants that are tracked by the Toxic Release Inventory (TRI) from manufacturing facilities on county-level infant and fetal mortality rates in the United States between 1989 and 2002. Unlike previous studies, we control for toxic pollution from both mobile sources and non-TRI reporting facilities. We find significant adverse effects of toxic air pollution concentrations on infant mortality rates. Within toxic air pollutants we find that releases of carcinogens are particularly problematic for infant health outcomes. We estimate that the average county-level decreases in various categories of TRI concentrations saved in excess of 13,800 infant lives from 1989 to 2002. Using the low end of the range for the value of a statistical life that is typically used by the EPA of $1.8M, the savings in lives would be valued at approximately $25B.