Working Papers
I study the positive and normative implications of treating capital maintenance as an economic decision for firms when maintenance is tax-deductible. My main contributions are
Developing a sufficient statistic framework for analyzing the maintenance channel of tax policy;
Providing new estimates on the maintenance elasticity of depreciation using i) novel data on freight rail maintenance ii) corporate tax returns iii) indirect evidence from Compustat;
Quantifying the welfare cost of the maintenance-investment tax distortion in a benchmark Ramsey model.
A Note on Smooth Local Panel Projections
In this note, I extend smooth local projections to panel data and use Monte Carlo methods to explore the bias and variance properties of smooth local panel projections (SLPP).
Draft | R Package (Dropbox) | R Vignette
Note that this is all very much in progress and the R package is regularly updated. Please let me know if you encounter any weird errors or if you have any ideas for new applications. Update soon for SLPP-DiD!
The Classical Cost of Inflation Along the Income Distribution
Abstract. I study the welfare cost of deviating from the Friedman rule along the income distribution. As a first step, I provide a structural framework for studying heterogeneous agent money demand in the context of a shopping time model with idiosyncratic risk. With that framework, I estimate money demand curves for low-, middle-, and high-income households using microdata from the Survey of Consumer Finance over the period 1989-2019. Low-income money demand is perfectly interest-inelastic, while middle-income demand is roughly as elastic as aggregate money demand and half as elastic as high-income money demand. Using these demand curves, I quantify the welfare cost of deviating from the Friedman rule. Numerically, a 5% nominal interest rate costs 0.54%, 0.66%, and 0.76% of consumption for low-, middle-, and high-income households, respectively.
Works in Progress
The Infrastructure Growth Drag
Abstract. Reflecting a widespread consensus that public infrastructure investment has become increasingly inefficient, the relative price of public investment has grown at 0.4% per year for the past sixty years. I quantify the negative effect of this trend on aggregate output and growth. If public investment efficiency had remained constant, output would be about 1.5% higher, which translates to more than half of total infrastructure spending. I embed infrastructure innovation in an endogenous growth model and estimate the necessary level of R&D expenditures necessary to offset the growing inefficiency wedge. The model is disciplined by evidence from quasi-experimental variation on the response of infrastructure investment productivity to government R&D expenditures on highways.
Projects
Federal & State Tax Policy
A database of federal and state tax policies on physical investment over the period 1972-2024. Marginal effective tax rates are available by industry, industry-by-asset for equipment and structures, and by state. Access code and data here. Please cite and let me know if there are any errors.
Inflation Inequality Across Time and Space in the United States
This is a multiyear project on inflation inequality with Jon Hartley supported and distributed by the Foundation for Research on Equal Opportunity (FREOPP). Our goal is to give academics and policymakers access to real-time inflation inequality indices across nine Census divisions and the whole nation across multiple demographic groups. Our time series starts in 1978. In 2022, we published a white paper with FREOPP, Inflation's Compounding Impact on the Poor, which explored inflation inequality across the income distribution at the national level. Our data and code were released to the public in April 2022. In May 2024, we will begin releasing monthly updates and publish a short report on geographic inflation inequality. Below, we have links to our data, a companion which consolidates and adds academic flavor to the FREOPP reports, and the original reports.
Ratio of price levels between the Pacific region and Upper Midwest (geographic inflation inequality) and between the bottom and top income deciles (income-based inflation inequality). The blue line combines the two.
Publications
Abstract. Modern Money Theory (MMT) has risen to prominence in popular policy debates within macroeconomics. MMT economists argue for creating a job guarantee program, which they argue would generate price stability. Using a benchmark model of time consistency supplemented with a job guarantee, we conclude that once policymakers’ incentives are considered, the job guarantee does nothing to help stabilize prices. We compare this program to a competing proposal to maintain price stability and full employment, NGDP targeting.