Research

Working papers

• The AI Skill TrapNew
  Paper HighlightAI raises short-run productivity but slows skill accumulation; combined with a data-quality externality, this generates an AI skill trap with a bimodal long-run skill distribution — a fully AI-dependent low-skill underclass coexisting with a high-skill group. A constrained planner internalizing the externality lifts substantial mass into the high-skill group but cannot eliminate the underclass, so bimodality is a robust feature of an AI economy with a data externality.
• Generative AI and Data Quality: Implications for Productivity, Labor Displacement, and PolicyConditionally Accepted, Review of Financial Studies
  Paper HighlightWill AI put us out of work? Not as alarming as it sounds: the usefulness of AI depends on how good the data is, and adoption of AI could itself depress that quality.
• Financial Development and the Housing Kuznets CurveR&R, International Economic Review
  with Feng Dong and Haoning Sun
  Paper HighlightWe document that the house price-to-rent ratio first increases and then decreases with financial development. A simple model of financial frictions with a land sector can account for this pattern.
• Quits and Optimal Unemployment Insurance
  with Jonathan Heathcote
  Paper CEPR WP HighlightOptimal design of unemployment insurance during the era of the Great Resignation, when many workers quit their jobs.
• Labor Participation, Human Capital Accumulation, and the Business Cycle
  with Rosemary Kaiser
  Paper HighlightIn a quantitative life-cycle model with endogenous labor participation, we find that subsidies for job search among the elderly population can enhance overall welfare.
• Self-fulfilling Resignation: Business-Cycle and Policy Implications
  Paper HighlightCan people quit their jobs because they expect others are doing the same? Yes — and this has new business-cycle and policy implications.

Published and accepted papers

• Public Disclosure and Private Information Acquisition: A Global Game Approach
  with Feng Dong
  Journal of Economic Theory, 210 (2023): 105670.
  Paper Slides Publisher HighlightA global-game refinement leads to surprising predictions about how the release of public information affects private incentives to acquire information.
• College Tuition and Income Inequality
  with Jonathan Heathcote
  American Economic Review, 112(1) (2022): 81–121.
  Paper Slides Publisher HighlightIn a micro-founded college equilibrium model, we show that rising income inequality over the past decades has had a quantitatively significant impact on college tuition.
• Secular Stagnation, Financial Frictions, and Land Prices
  Journal of Monetary Economics, 124 (2021): 66–90.
  Paper Slides Publisher HighlightTemporary but large financial shocks can lead to persistent slumps in real-estate prices — a secular stagnation reminiscent of the post-GFC experience.
• A Model of Secular Migration from Centralized to Decentralized Trade
  with Feng Dong
  Economic Theory, 72 (2021): 201–244.
  Publisher HighlightThe title is self-explanatory.
• Dynamic Information Acquisition and Time-Varying Uncertainty
  Journal of Economic Theory, 184 (2019): 104947.
  Paper Appendix Publisher HighlightInformation-acquisition activities can amplify the impact of uncertainty shocks in a dynamic trading environment.

Older working papers

• How Do Financial Frictions Affect Self-financing Firms?
  with Kai Ding
  Paper