Job Market Paper
We provide evidence on the dynamic behavior of net labor flows across US states in response to a positive technology shock. Technology shocks are identified as disturbances that increase relative state productivity in the long run for 226 state pairs encompassing 80 percent of labor flows across US states in the period 1976 - 2008. The data suggest heterogeneous responses of both employment and net labor flows across states conditional on a positive technology shock. We build a two region dynamic stochastic general equilibrium (DSGE) model with endogenous labor mobility and region-specific shocks accounting for this evidence. We calibrate the model economy consistently with the observed differences in the degree of nominal rigidities across states, and show that we replicate the different patterns of the responses in employment and net labor flows across states following a technology shock.
"Housework and Fiscal Expansions" (joint with Stefano Gnocchi and Evi Pappa)
We argue that explicitly modelling a home production sector as an alternative option to market work is crucial for understanding the propagation of exogenous changes in public spending to macroeconomic variables. In fact, the substitutability between market and home produced goods is an important driver of the labor supply response to government expenditure shocks and, as a consequence, is key to explain the magnitude of fiscal multipliers, as well as the behavior of private market consumption after a fiscal expansion. We illustrate our argument by building an otherwise standard business cycle model that encompasses a home production sector. Finally, we use both micro- and macroeconomic evidence to validate our predictions. If the elasticity of substitution between home and market goods is chosen in line with the microeconomic estimates our model delivers impulse response functions to government expenditure shocks that agree with the VAR evidence.
This paper develops a small open economy with endogenous dollarization under both perfectly flexible and sticky prices and examines the macroeconomic implications of different monetary policy regimes. We show that by defining dollarization endogenously the monetary authority faces an additional policy trade-off between stabilization and the degree of dollarization. Our model suggests that a positive degree of dollarization does affect the economy's dynamics after shocks and consequently does have real effects. Dollarization therefore matters for stabilization and consists in an important element to be taken into account in defining monetary policy appropriately.
Work in Progress
Optimal Monetary Policy with Labor Mobility
Openness and Nominal Rigidites in a Monetary Union