I am a Ph.D. candidate from Duke Economics.

My primary interests are:

  • Macroeconomics

  • Applied Time Series Econometrics.

  • Computational Economics

I am available for interviews at the 2018 Philadelphia ASSA Meeting.

You can check out my CV here.


Asymmetric Inventory Dynamics and Product Market Search (Job Market Paper)

[Full Text][Slides]

Abstract: Why does inventory investment on average account for 72% of GDP decline during recessions but only 8% during expansions? Why does the aggregate inventory-sales ratio cease to be countercyclical since the 1990s but still lag GDP for four quarters? These newly documented stylized facts pose challenges to existing macroeconomic inventory models and cast doubts on important conclusions drawn from these models. In this paper, I show that incorporating product market search friction into a standard inventory model can address these stylized facts. Product market search enhances firms’ asymmetric trade-off between accumulating inventory and adjusting markup, and thereby generates strongly asymmetric shares of inventory investment in GDP movements. Product market search also generates the lagging inventory-sales ratio because households’ procyclical effort to search for varieties increases(decreases) sales as well as inventory stock at the early stage of expansions(recessions). Its effects, however, are later eclipsed by heightened(lowered) return on holding inventory which only increases(decreases) inventory stock but not sales. The model is disciplined by micro evidence provided by recent empirical studies, and its behavior is consistent with inventory and business cycle stylized facts in the US. Additionally, the model is broadly consistent with observed business cycle asymmetries in output, employment, and markup.

What Does Inventory Tell Us About Business Cycle Regimes? Evidence from a Markov-switching Vector Autoregression

Abstract: This paper investigates the asymmetry of inventory dynamics across phases of business cycles. Using a Markov-switching vector autoregression (MS-VAR), we find that: First, including inventory variables in the MS-VAR improves identification of business cycle turning points. Second, the relationship between sales and inventory investment in expansions differ significantly from those in recessions. Third, both regime-switching and asymmetric responses to shocks are essential to understanding the observed inventory asymmetry. Lastly, monetary policy shocks exert stronger effects during recessions than expansions.

Investment Lumpiness and Investment Goods Price

with Yang Yu (SHUFE)

Abstract: The negative unconditional correlation between the quantity and the relative price of investment is a well-documented fact in the U.S. economy, which justifies technological shocks to investment producers (supply side story). In this paper, we document several new pieces of evidence that suggest a demand side story. In particular, we find that the conditional correlation between the quantity and the relative price of investment goods is time-varying and can occasionally become significantly positive. Moreover, we find that when fewer firms adjust capital stock along the extensive margin—that is when investment is lumpier— the quantity and the relative price of investment goods are more likely to move in the opposite direction. Motivated by these observations, we develop a heterogeneous firm model in which the investment price is endogenously determined by the composition of investment goods buyers. In recessions, only productive firms choose to invest, which decreases the elasticity of aggregate demand curve of investment. In this situation, monopolistic sellers of investment would optimally raise markup to exploit the lower elasticity of demand. While this effect is strong in periods with high investment lumpiness, it becomes much weaker when lumpiness is low. Furthermore, we show that countercyclical investment stimulus is welfare-improving, which contrasts with the supply side stories.

Quantifying China’s Supply-Side Structural Reforms

[Full Text Available Upon Request][Slides]

with Ding Ding (IMF), Rui Mano (IMF)

Abstract: In late 2015, the Chinese government announced a major economic policy package entitled Supply Side Structural Reforms (SSSR) that consists of overcapacity reduction, housing market destocking, deleveraging, among others. The authorities claim SSSR is chiefly behind the robust growth of the past few quarters. This project quantitatively assesses the overcapacity reduction in steel and coal industries. In particular we ask: are capacity reduction measures chiefly responsible for the recent reflation of producer prices and improved corporate profitability? We find little evidence of a statistical robust impact of SSSR on these industries, and instead that aggregate demand plays a dominant role and has supported upstream industries regardless of policy support. While there was an across-the-board improvement in corporate profitability, the link to SSSR is ambiguous.