Recent Publications
2022
Santanu Roy (with Tapan Mitra), Stochastic Growth, Conservation of Capital and Convergence to a Positive Steady State, Economic Theory (2022). [Published Article]
In a general optimal stochastic growth model, we provide a tight condition for convergence to a positive stochastic steady state and show the non-monotone effect of increase in risk aversion on long run extinction of capital.
Michael Sposi, Demographics and the Evolution of Global Imbalances, Journal of Monetary Economics (2022). [Published Article]
Bilateral trade frictions influence the incidence of bilateral and aggregate external imbalances triggered by demographic-induced saving demand.
Santanu Roy (with Maarten Janssen), Regulating Product Communication, American Economic Journal: Microeconomics (2022). [Published Article]
While it can increase competition and improve information for consumers, the regulation of false advertising and other deceptive communication by firms can lead to unintended consequences, including excessive advertising and over disclosure, that hurt consumers.
Santanu Roy, Propensity to Consume and the Optimality of Ramsey-Euler Policies, Economic Theory (2022). [Published article]
In a stochastic growth model where the production technology may be globally unproductive or allow for unbounded growth, a continuous and co-monotone Ramsey-Euler policy function may not be optimal if the propensity to consume is small.
2021

Nate Pattison (with Richard M. Hynes), A Modern Poor Debtor’s Oath? Virginia Law Review (forthcoming). [Working paper]
Several states have passed laws that prohibit employers from using credit reports in hiring decisions. This paper evaluates the impact of these bans on the labor market outcomes of financially distressed job seekers.

Rocio Madera (with Chris Busch, David Domeij, and Fatih Guvenen), Skewed Idiosyncratic Income Risk over the Business Cycle: Sources and Insurance, AEJ: Macroeconomics (forthcoming). [Working paper]
Using panel data from the United States, Germany, Sweden, and France, we show that households experience higher downside risk and lower chances of upward surprises during recessions—the skewness of earnings changes is pro cyclical— even for continuously employed full-time workers. Within-household smoothing does not seem effective at mitigating skewness fluctuations but government tax-and-transfer policies blunt some of the largest declines in incomes.

Hao Dong (with Luke N. Taylor), Nonparametric significance testing in measurement error models, Econometric Theory (forthcoming). [Working paper]
This paper develops the first nonparametric significance test for regression models with classical measurement error in the regressors, and shows that the test can detect a sequence of local alternatives converging to the null at the root-n rate.
Santanu Roy (with Ayça Kaya), Market Screening with Limited Records, Games and Economic Behavior (forthcoming). [Published article]
In markets with adverse selection and repeated sales, welfare may initially increase and then decline with the length of trading record i.e., the number of past time periods whose trading outcomes can be observed by current participants.

Wookun Kim (with Pablo Fajgelbaum, Amit Khandelwal, Cristiano Mantovani, and Edouard Schaal), Optimal Lockdown in a Commuting Network, American Economic Review: Insights (forthcoming). [Published article and Working paper]
Relative to city-wide uniform lockdowns implemented to fight COVID-19 around the world, spatially targeted lockdowns taking into account the commuting patterns and the spatial distribution of economic activity substantially improve economic efficiency while saving more lives.

Nate Pattison (with Leora Friedberg and Richard Hynes), Who Benefits from Bans on Employer Credit Checks? The Journal of Law and Economics (forthcoming). [Working paper]
Several states have passed laws that prohibit employers from using credit reports in hiring decisions. This paper evaluates the impact of these bans on the labor market outcomes of financially distressed job seekers.
Michael Sposi (with Kei-Mu Yi and Jing Zhang), Trade Integration, Global Value Chains, and Capital Accumulation, IMF Economic Review (2021). [Published article and Working paper]
Participation in global value chains complements growth and capital accumulation in emerging economies through the ability to transition from upstream, labor-intensive stages of production to downstream, capital-intensive activities.

Klaus Desmet (with Romain Wacziarg), Understanding Spatial Variation in COVID-19 across U.S. Counties, Journal of Urban Economics (2021). [Published article]
What factors explain spatial variation in the severity of COVID-19 across the United States? Counties with high effective density, more nursing homes, lower income, and a greater presence of African Americans and Hispanics are disproportionately impacted. Trump-leaning counties are less severely affected early on, but later suffer from a large severity penalty.

Hao Dong (with Taisuke Otsu and Luke Taylor), Estimation of varying coefficient models with measurement error, Journal of Econometrics (2021). [Published article]
This paper proposes a semiparametric estimator for varying coefficient models when the regressors in the nonparametric components are measured with error, and show that the estimator is consistent and asymptotically normally distributed.

Daniel Millimet (with Ding Liu), Bounding the Joint Distribution of Disability and Employment with Misclassification, Health Economics (2021). [Published article]
We assess what can be learned about the joint distribution of disability status and labor market status at different time periods using self-reported data, accounting for the fact that such data is known to contain significant measurement error.

Klaus Desmet (with Romain Wacziarg), The Cultural Divide, Economic Journal (2021). [Published article]
Using US data from 1972 to 2018, cultural divides have been increasing along lines of religion and political orientation, mildly U-shaped along income and racial lines, and flat or decreasing for gender and urbanicity.

Daniel Millimet (with Christopher Parmeter), Accounting for Skewed or One-Sided Measurement Error in the Dependent Variable, Political Analysis (2021). [Published article]
This paper discusses the issues that arise in linear regression models when the dependent variable suffers from nonclassical measurement error due to the error being skewed or one-sided. The paper then shows via simulations and replications the usefulness of stochastic frontier analysis in addressing these issues.

Nathan Balke (with Enrique Martinez-Garcia and Zheng Zeng), In No Uncertain Terms: The Effect of Uncertainty on Credit Frictions and Monetary Policy, Economic Modelling (2021). [Published article]
In this paper, we examine how credit market frictions and time varying uncertainty interact and result in nonlinear relationships such as asymmetry between interest rate spreads and economic activity.

Klaus Desmet (with David Cuberes and Jordan Rappaport), Urban Growth Shadows, Journal of Urban Economics (2021). [Published article]
Proximity to large urban centers was negatively associated with growth until 1920, and positively associated with growth thereafter.
Michael Sposi (with Logan T Lewis, Ryan Monarch and Jing Zhang), Structural Change and Global Trade, Journal of European Economic Association (2021). [Published article]
The global expansion of expenditures on services relative to goods has impeded growth in global openness and mitigated the gains from further trade integration in goods markets.

Nathan Balke (with Ren Zhang and Zheng Zeng), Identifying Credit Demand, Financial Intermediation, and Supply of Funds Shocks: A Structural VAR Approach, North American Journal of Economics and Finance (2021). [Published article]
In this paper, we find that shocks to financial intermediary lending played a significant role in the decline in economic activity experienced during the “Great Recession” of 2007-09; shocks to the demand for loans and shocks in the supply of funds to financial intermediaries were not important contributors to the “Great Recession”.
2020

Klaus Desmet (with Robert Kopp, Scott Kulp, David Nagy, Michael Oppenheimer, Esteban Rossi-Hansberg and Ben Strauss), Evaluating the Economic Cost of Coastal Flooding, American Economic Journal: Macroeconomics (forthcoming). [Working paper]
A high-resolution dynamic model of the world economy projects that permanent flooding will reduce global GDP by 0.19% in present value terms; Ignoring the dynamic response of migration increases the loss in GDP in the year 2200 from 0.11% to 4.5%.

Hao Dong (with Taisuke Otsu and Luke Taylor), Average Derivative Estimation Under Measurement Error, Econometric Theory (forthcoming). [Working paper]
This paper derives the asymptotic distribution of the density-weighted average derivative when a regressor is contaminated with a classical measurement error, and shows that the asymptotic distribution of the estimator is the same irrespective of whether the error distribution is estimated or not when the error density is symmetric.
Santanu Roy (with Maarten Janssen), Regulating Product Communication, American Economic Journal: Microeconomics (forthcoming). [Working paper]
While it can increase competition and improve information for consumers, the regulation of false advertising and other deceptive communication by firms can lead to unintended consequences, including excessive advertising and over disclosure, that hurt consumers.

Klaus Desmet (with Marius Brulhart and Gian-Paolo Klinke), The Shrinking Advantage of Market Potential, Journal of Development Economics (2020). [Published article]
Data from 18,961 regions of the world show that as economies develop, market potential loses importance and local density gains importance as determinants of regional growth.
Santanu Roy, Propensity to Consume and the Optimality of Ramsey-Euler Policies, Economic Theory (2020). [Published article]
In a stochastic growth model where the production technology may be globally unproductive or allow for unbounded growth, a continuous and co-monotone Ramsey-Euler policy function may not be optimal if the propensity to consume is small.

Nate Pattison (with Richard Hynes), Asset Exemptions and Consumer Bankruptcies: Evidence from Individual Filings, The Journal of Law and Economics (2020). [Published article and Working paper]
Using detailed individual-level data on all bankruptcies filed over the last decade, we examine how more generous asset exemptions change the number and characteristics of households filing for bankruptcy.

Ömer Özak (with Emilio Depetris-Chauvin),The Origins of the Division of Labor in Pre-Industrial Times, Journal of Economic Growth (2020). [Published article]
Population diversity in intergenerational transmitted traits (e.g., preferences, values, abilities) is a fundamental determinant of the division of labor in pre-modern times, which in turn has had a major impact on the emergence of states and pre-industrial and contemporary economic development.

Thomas Osang (with Jeffry Jacob), Democracy and Growth: A Dynamic Panel Data Study, The Singapore Economic Review (2020). [Published article]
Investigating the nexus between democracy and economic development in a new empirical framework, we find that we find that measures of democracy matter little for a country’s economic performance, in contrast to the growth effects of institutions, regime stability, openness, geography and macro-economic policy variables.

Nate Pattison, Consumption Smoothing and Debtor Protections, Journal of Public Economics (2020). [Published article]
Consumption declines in years when borrowers default, indicating that the legal protection of delinquent borrowers may provide valuable insurance. Evaluating asset protections, however, I find that the interest rate cost exceeds the welfare benefit of the protection.

Klaus Desmet (with Avner Greif and Stephen Parente), Spatial Competition, Innovation and Institutions: The Industrial Revolution and the Great Divergence, Journal of Economic Growth (2020). [Published article and Working paper]
This paper argues that differences in the degree of inter-city competition can help us understand the timing of the Industrial Revolution and the Great Divergence between England and China in the 18th and 19th centuries.

Ömer Özak (with Oded Galor and Assaf Sarid), Linguistic Traits and Human Capital Formation, AEA Papers and Proceedings. [Published article and Working paper]
Exploiting variations in the languages spoken by children of migrants with identical ancestral countries of origin, we establish that the presence of periphrastic future tense, and its association with long-term orientation has a significant positive impact on educational attainment, whereas the presence of sex-based grammatical gender, and its association with gender bias, has a significant adverse impact on female educational attainment.

Klaus Desmet (with Joseph Gomes and Ignacio Ortuño), The Geography of Diversity and the Provision of Public Goods, Journal of Development Economics (2020). [Published article and Working paper]
This paper shows that local interaction between individuals of different ethnolinguistic groups improves educational, health and infrastructure outcomes at the national level.

Tim Salmon (with Angela de Oliveira, John Ledyard, Charles Plott and Louis Putterman), Introduction to the Symposium on Research on Social Dilemmas, Economic Inquiry (2020). [Published article]
This is the introduction to a special issue of Economic Inquiry associated the seventh in a series of workshops on social dilemmas begun by Elinor Ostrom in 2002 that attracted a large number of high quality submissions over a broad range of topics in the research area.
2019

Rocio Madera (with Antonio Cabrales, Maia Güell and Analia Viola), Income Contingent University Loans: Policy Design and an Application to Spain, Economic Policy (2019) [Published article and Working paper]
This paper offers a general analysis of the distributional effects of income-contingent loan systems to finance tertiary education, followed by an application to Spain.
Michael Sposi (with B. Ravikumar and Ana Maria Santacreu), Capital Accumulation and Dynamic Gains from Trade, Journal of International Economics (2019). [Published article]
We develop a gradient-free method to compute the welfare gains from trade in a multi-country, dynamic model of trade with capital accumulation and current account dynamics.

Nate Pattison (with Rajashri Chakrabarti), Auto Credit and the 2005 Bankruptcy Reform: The Impact of Eliminating Cramdowns, The Review of Financial Studies (2019) [Published article]
Exploiting persistent historical variation in states’ bankruptcy patterns, we find that increased creditor protection from a major 2005 bankruptcy reform led to lower interest rates for consumers.

Bo Chen (Joint with Yu Chen and David Rietzke), Simple Contracts under Observable and Hidden Actions, Economic Theory (2019). [Published article]
Simple forcing contracts are both optimal and useful for general multitask moral hazard problems with both observable and hidden actions.

Kathy Hayes (with Shawna Grosskopf, Laura Razzolini, and Lori Taylor), Kids or Cash? Exploring Charter School Responses to Declining Government Revenues, Economic Inquiry (2019) [Published article]
We find that charter schools typically increase enrollments, rather than increasing fundraising, in response to funding cuts.

Daniel Millimet (with Hao Li and Punarjit Roychowdhury), Partial Identification of Economic Mobility, Journal of Business & Economic Statistics (2019). [Published article and Working paper]
This paper discusses the partial identification of income mobility when using error-laden, self-reported data on income at two points in time.
Santanu Roy (with Adriana Piazza), Irreversibility and the Economics of Forest Conservation, Economic Theory (2019). [Published article]
Difficulty of regenerating forest on land used for non-forest economic activities can discourage expansion of forests and at the same time, make it optimal to conserve a minimal forested area; low reforestation cost can lead to cyclical fluctuations in optimal forest cover.

Tim Salmon (with Adam Shniderman), Ambiguity in Criminal Punishment, Journal of Economic Behavior & Organization (2019). [Published article]
While many prior studies find evidence that individuals are strongly ambiguity averse, we investigate whether such preferences can be exploited by using increased ambiguity in punishments but find little evidence that behavior is driven by ambiguity aversion in this domain.

Thomas Osang (with Jared Warren), Retaliatory Antidumping by China: A New Look at the Evidence, Eastern Economic Journal (2019). [Published article]
Examining a large number of factors that may influence China’s decision to retaliate using antidumping filings from 1995 to 2015, we find, among others, that higher levels of China’s country-specific imports as well as lower growth rates of China’s GDP increase the likelihood of retaliation.
Mike Sposi, Evolving Comparative Advantage, Sectoral Linkages, and Structural Change, Journal of Monetary Economics (2019) [Published article]
Input-output linkages systematically vary with income levels across countries, and these differences are important for explaining the hump shape in the share of industry in aggregate GDP across income levels.
2018
Mike Sposi, (with Piyusha Mutreja and B. Ravikumar), Capital Goods Trade, Relative Prices, and Economic Development, Review of Economic Dynamics (2018). [Published article]
Trade enables poor countries access to capital goods produced in rich countries, boosting their capital stock, and also improves their TFP by allowing them to specialize in the production of non-capital goods.

Klaus Desmet (with Dávid Krisztián Nagy and Esteban Rossi-Hansberg), The Geography of Development, Journal of Political Economy (2018) [Published article]
This paper develops a dynamic spatial growth model, calibrates it at the 1-degree by 1-degree geographic resolution for the whole world, and shows that fully liberalizing migration would increase global welfare about threefold.

Ömer Özak, Distance to the Pre-industrial Technological Frontier and Economic Development, Journal of Economic Growth (2018). [Published article]
This paper establishes that geographical isolation from the technological frontier during the pre-industrial era has had beneficial effects on countries' economic development in the long-run as it fostered a culture of entrepreneurship and innovation.

Bo Chen and Raj Deb, The Role of Aggregate Information in a Binary Threshold Game, Social Choice and Welfare (2018). [Published article and Working paper]
The minimal information (of previous contributions) required for full coordination in sequential contribution for a public good with a known threshold and no refund is not full observation but that the participants' observation is linked in an information chain with certain length.

Saltuk Ozerturk, Choosing a Media Outlet when Seeking Public Approval, Public Choice (2018). [Published article]
This paper considers the media outlet choice of a politician who seeks public approval for a political agenda and shows that (1) politicians who enjoy sufficient popularity are likely to avoid tough media outlets, and (2) when seeking approval for controversial agendas, politicians are more likely to appear in tougher outlets.

Nathan Balke (with Stephen Brown), Oil Supply Shocks and the U.S. Economy: An Estimated DSGE Model, Energy Policy (2018). [Published article]
We quantify the responsiveness of the US economy to oil price increases brought about by oil supply disruptions abroad.

Thomas Osang (with Jeffry Jacob), Democracy and Growth: A Dynamic Panel Data Study, Singapore Economic Review (2018). [Published article and Working paper]
Investigating the nexus between democracy and economic development in a new empirical framework, we find that we find that measures of democracy matter little for a country’s economic performance, in contrast to the growth effects of institutions, regime stability, openness, geography and macro-economic policy variables.

Tom Fomby and Daniel Millimet (with Ian McDonough), Financial Capability and Food Security in Extremely Vulnerable Households, American Journal of Agricultural Economics (2018). [Published article]
Using original survey data collected from food pantry clients throughout North Texas, we find a statistically and economically meaningful causal effect of financial literacy on the food security status of households.

Tom Fomby (with Pranavi Sreeramoju, Lucia Dura, Maria Fernandez, Abu Minhajuddin, Kristina Simacek, and Bradley Doebbeling), Using a Positive Deviance Approach to Influence Culture of Patient Safety Related to Infection Prevention, Open Forum Infectious Diseases (2018). [Published article]
A positive deviance approach appeared to have a significant impact on patient safety culture related to infection prevention among health care personnel who received the intervention.
2017

Klaus Desmet (with Ignacio Ortuño and Romain Wacziarg), Culture, Ethnicity, and Diversity, American Economic Review (2017). [Published article]
This paper empirically shows that only 1-2% of a country's overall heterogeneity occurs between ethnolinguistic groups, yet the degree of between-group cultural differences are a significant predictor of civil conflicts.

James Lake and Santanu Roy, Are Global Trade Negotiations Behind a Fragmented World of "Gated Globalization"?, Journal of International Economics (2017). [Published article and Working paper]
Global tariff negotiations can prevent global free trade precisely because they are successful in lowering global tariffs.

Ömer Özak (with Ani Harutyunyan), Culture, Diffusion, and Economic Development: The Problem of Observational Equivalence, Economics Letters (2017). [Published article]
This paper establishes the difficulty of determining whether cultural values affect economic development directly or by hindering adoption of improved technologies as the recent literature strives to do.

Daniel Millimet (with Ian McDonough), Missing Data, Imputation Accuracy, and Endogeneity, Journal of Econometrics (2017). [Published article and Working paper]
This paper investigates various methods of addressing missing data on an endogenous covariate in a linear regression framework; recommendations for applied researchers are provided.Santanu Roy (with Tapan Mitra), Optimality of Ramsey-Euler Policy in the Stochastic Growth Model, Journal of Economic Theory (2017). [Published article and Working paper]
A continuous (or monotonic) consumption function that satisfies the Euler equation is shown to be always optimal in the standard one sector stochastic growth model; there is no need to verify the cumbersome transversality condition separately.

Tim Salmon (with Roberto Weber), Maintaining Efficiency While Integrating Entrants From Lower-Performing Environments: An Experimental Study, Economic Journal (2017). [Published article]
This study examines the efficacy of different rules on group formation mimicking immigration rules in allowing a highly coordinated group to maintain a high level of cooperation as new entrants join from a less successful group.

Saltuk Ozerturk, Moral Hazard, Skin in the Game Regulation and CRA Performance, International Review of Economics and Finance (2017). [Published article]
This paper develops a theoretical model and shows that, requiring the seller to retain a stake on the security issued (skin in the game) also improves the rating accuracy of a Credit Rating Agency involved in the sale.

Bo Chen (with Debing Ni), Optimal Bundle Pricing under Correlated Valuations, International Journal of Industrial Organization (2017). [Working paper]
For a multi-product monopolist, the correlation of consumers' component valuations crucially affects the form of the optimal bundle pricing scheme and can be exploited by the monopolist to improve revenue using a random selling mechanism.

Nathan Balke (with Mike Fulmer and Ren Zhang), Incorporating the Beige Book into a Quantitative Index of Economic Activity, Journal of Forecasting (2017). [Published article]
We show how information in the Beige Book can be used to improve forecasts of economy activity.

Tom Fomby (with Kun Chang and Rong Chen), Prediction-based Adaptive Compositional Model for Seasonal Time Series Analysis, Journal of Forecasting (2017). Published article]
A new class of seasonal time series models where out-of-sample forecasts show forecasting accuracy at least as good as current state-of-the-art forecasting techniques.

Kathy Hayes (with Shawna Grosskopf, Lori Taylor, and William Weber), Would Weighted-Student Funding Enhance Intra-District Equity in Texas? A Simulation Using DEA, Journal of the Operational Research Society (2017). [Published article]
We find that if school districts allocated their resources efficiently, then they would not allocate their resources to campuses according to the Texas School Finance Formula.

Klaus Desmet (with Jordan Rappaport), The Settlement of the United States, 1800-2000: The Long Transition to Gibrat’s Law, Journal of Urban Economics (2017). [Published article]
This paper analyzes the changing relation between local population growth and initial population in the U.S. between 1800 and 2000.

Thomas Osang (with Shlomo Weber), Immigration Policies, Labor Complementarities, and Cultural Frictions: Theory and Evidence, International Journal of Economic Theory (2017). [Published article]
This paper provides theoretical explanations and empirical evidence on how population size, labor complementarities between native and non-native workers as well as cultural frictions between immigrants and natives shape a country’s immigration policy.

Daniel Millimet (with Ian McDonough), Dynamic Panel Data Models with Irregular Spacing: with Applications to Early Childhood Development, Journal of Applied Econometrics (2017). [Published article and Working paper]
This paper discusses the problems that arise when estimating dynamic panel data models using longitudinal data where the timing of the survey waves does not align with the data-generating process; solutions are proposed and an application to the determinants of student achievement in primary school is provided.

Klaus Desmet (with Ignacio Ortuño and Shlomo Weber), Peripheral Diversity: Transfers versus Public Goods, Social Choice and Welfare (2017). [Published article]
This paper theoretically hypothesizes and empirically establishes that higher degrees of ethnolinguistic center-periphery tension are associated with less provision of public goods, but more transfers.

Tim Salmon (with Danila Serra), Corruption, Social Judgment and Culture: An Experiment, Journal of Economic Behavior & Organization (2017). [Published article]
Mechanisms involving social observability have been increasingly used in developing countries to work against corruption. We examine their effectiveness and the degree to which their effectiveness is culturally dependent.

Klaus Desmet (with Dávid Krisztián Nagy and Esteban Rossi-Hansberg), Asia’s Geographic Development, Asian Development Review (2017). [Published article]
This paper quantitatively explores the importance of transport costs and migration restrictions in the long-run development of Asia.