Research

My primary fields of research are Macroeconomics, Growth, and Productivity. In the past, I have worked on issues related to Inflation, Monetary Policy, and Small Open Economies.

Listed below are links and descriptions related to both my published and unpublished papers.

Published Papers

Pieces of research that have been published in academic journals

Government Intervention in the Housing Market: Who Wins, Who Loses?

Many U.S. government policies aim to encourage homeownership. We use a general equilibrium model with heterogeneous agents to consider the effects of temporary homebuyer tax credits and the asymmetric tax treatment of owner-occupied and rental housing on prices, quantities, allocations, and welfare. The model suggests that homebuyer tax credits temporarily raise house prices and transaction volumes, but have negative effects on welfare. Removing the asymmetric tax treatment of owner-occupied and rental housing can generate welfare gains for a majority of agents across steady states, but welfare impacts are substantially more varied along the transitions between steady states.

An Estimated Small Open Economy Model with Frictional Unemployment

This paper investigates labour market dynamics in New Zealand by estimating a structural small open economy model enriched with standard search and matching frictions in the labour market. We show that the model fits the business cycle features of key macroeconomic variables reasonably well and provides an appealing monetary transmission mechanism. We then extend our analysis to examine the driving forces behind labour market variables. Our findings suggest that the bulk of variation in labour market variables is solely explained by disturbances pertaining to the labour market.

Working Papers

Unpublished pieces of research

Learning Through Hiring: Knowledge From New Workers as an Explanation of Endogenous Growth

This paper develops an endogenous growth model in which the job-to-job transition of workers provides a channel for the spillover of knowledge between firms. Workers learn some of the productive knowledge used by their employer while working on the job. When a worker moves to another firm, they are able to adapt some of this knowledge for use at the hiring firm. Firms endogenously control their exposure to new knowledge by choosing the intensity that they post vacancies in a search-and-matching labor market. It is shown that under a set of assumptions regarding the initial distribution of firm types and the vacancy posting cost function, the competitive equilibrium leads to a balanced growth path that has a constant growth rate and stationary distribution of firm size.

Firm Productivity Growth and its Relationship to the Knowledge of New Worker

Using linked employer-employee data, productivity growth at a firm is related to the firm’s exposure to outside knowledge, proxied by the difference between the hiring firm’s productivity and the productivity of the new worker’s previous employer. The estimated relationship is compared to the predictions implied by both the knowledge spillover and worker quality channels. While not a causal relationship, the multi-factor productivity results are consistent with the predictions of a worker quality channel in which positive assortative matching between workers and firms acts as a signal of the unmeasured worker quality that will benefit the hiring firm. When firm productivity is measured in terms of labor productivity, support is also found for knowledge spillovers occurring from more to less productive firms through the labor mobility channel. Further investigation suggests that this knowledge spillover pertains to production technology knowledge, allowing the firm to operate at higher levels of capital intensity, and not multi-factor productivity knowledge, that would allow the firm to operate its current inputs more efficiently.

What Drives Core Inflation? A Dynamic Factor Analysis of Tradable and Nontradable Prices

I develop a new estimate of core inflation for New Zealand and Australia based on a dynamic factor model. By using an over-identification restriction, the factors of the model are classified as tradable and nontradable factors. This innovation allows us to examine the relative contributions of tradable and nontradable prices towards core inflation. The results show that core inflation in both countries is primarily driven by the nontradable factor. The nontradable factor also explains significantly more of the variance in headline inflation relative to the tradable factor. Finally, both the tradable and nontradable factors show similar profiles across both countries suggesting common drivers.

Does Natural Rate Variation Matter? Evidence from New Zealand

Natural rates are an important concept within the new Keynesian models often used for monetary policy advice. However, many of these models rely on demeaned interest rate and inflation data. Thus, they implicitly impose the strict assumption that the natural rates of these series are constant. Using New Zealand data and a small open-economy new Keynesian model with time-varying parameters, we estimate the natural real rate of interest, inflation target, potential output, and neutral real exchange rate. We find that the model estimates of the natural real rate of interest and neutral exchange rate display noticeable time variation and considerable uncertainty, while the inflation target has been relatively stable over the sample period. We also compare the results of this model to a model with time-invariant natural rates. The comparison reveals the data prefers the fit of the timevarying model. It also shows that allowing the natural rates to vary over time has implications for the persistence parameters and impulse responses of the model.