Research
Recent unpublished drafts
Combining a Survey Experiment with a Lifecycle Model to Evaluate Pronatalist Policies, with Joshua R. Goldstein, Jian Li, and Carsten Schröder, June 2023 - A structurally estimated model of intended fertility that addresses parental and non-parental childcare-time allocations, cross-validated by randomized vignette policy experiments, implies that daycare subsidies are more cost-effective than child allowances in the US and in Germany. Revision requested by the International Economic Review.
Asset Pricing under Rational Learning about Rare Disasters, with Volker Wieland, January 2020 - Two variants of limited information regarding variable disaster risk, rational state verification (filtering), and rational learning about the data-generating process of variable disaster risk, reveal why investment becomes persistently weak for a long time after each rare disaster, and why most investors in markets behave similarly during such periods.
Populism and Polarization in Social Media Without Fake News: the Vicious Circle of Biases, Beliefs and Network Homophily, with Zaruhi Hakobyan, January 2020 - Internet has made people with similar individual biases, such as confirmation bias or assimilation bias, meeting faster, and this key feature, combined with peer influence and limited information, produces polarization network dynamics and a gradual downgrading of expert opinion on complicated issues, even without fake news.
Increasing Taxes After a Financial Crisis: Not a Bad Idea After All... , with Dimitrios Mavridis, October 2019 - Lowering taxes after a financial crisis would be as if trying to kick a sick horse in order to stand up and run, since pessimistic markets would be unwilling to invest enough under any temporarily generous tax regime.
Publications
Demographics and FDI: Lessons from China's One-Child Policy, with John B. Donaldson, Jian Li, and Rajnish Mehra, 2024 - Macroeconomic Dynamics, fortrhcoming.
In accordance with our overlapping-generations model that has neoclassical fundamentals, we see that before and after the implementation of China's one-child policy, the trajectory of the capital growth differences between China (the treated country) and India (the control country) closely tracks the difference in their respective population growth rates. Further evidence supports that population dynamics play a first-order role in determining cross-country FDI flows and that the neoclassical theory is a good direction for future research. Also appearing as NBER Working Paper No. 24256.
Rational Noncooperative Strategic Exploitation of Species in a Predator-Prey Ecosystem with Random Disturbances, 2024 - Dynamic Games and Applications, Vol. 14, 57-77.
In a workable predator-prey ecosystem of common-property exploitable species, when players exploit only one of two interacting species, then in symmetric Markovian Nash equilibrium: (i) the "tragedy of the commons" holds, and (ii) when exogenous factors increase and/or make more volatile the natural geometric death rate of the species under exploitation (of the non-harvested species) each player's harvesting rate increases (decreases) and the commons problem is intensified (mitigated).
Symmetric Markovian Games of Commons with Potentially Sustainable Endogenous Growth, 2021, with Zaruhi Hakobyan, Dynamic Games and Applications, Vol. 11, 54-83.
Symmetric Markovian differential games with a linear accumulation constraint that address commons problems admit an exact (interior) solution because the Hamilton-Jacobi-Bellman equation of each player can be reduced into a form of the Lagrange-d'Alembert differential equation.
The Role of Labor-Income Risk in Household Risk-Taking, 2020 with Sylwia Hubar and Jian Li, European Economic Review, Vol. 129, Article 103522, 1-24.
A parsimonious household-portfolio model of stock and business equity shows why, in 17 countries, rich households undertake so much financial risk, while poor and middle-income households hesitate to do that: Uncontrollable labor-income risk stresses middle-income households more because labor income is a larger fraction of their total lifetime resources compared with the rich.
The Long Shadows of War in China: Battle Shocks in Early Life and Health/Wealth Accumulation, 2020, with Jian Li, China Economic Review, Vol. 60, Article 101394, 1-40. S
Exposure to battle shocks of the 2nd Sino-Japanese war (1937–1945) and the Chinese Civil War (1946–1950), combined with the 1950–1978 communism experiment in China, comprise a quasi-natural experiment indicating a causal relationship from (negative) health to (negative) wealth accumulation.
Do Demographics Prevent Consumption Aggregates From Reflecting Micro-Level Preferences?, 2019, with Carsten Schröder and Ulrich Schmidt, European Economic Review, Vol. 111, 166-190.
Dynamic consumption/savings decisions of infinitely-lived dynasties with changing household size aggregate exactly if and only if dynasties have preferences with specific parameters changing over time, implying a specific cross-sectional pattern of household economies of scale that is not rejected by vignette-survey data in several countries.
Market Fragility and the Paradox of the Recent Stock-Bond Dissonance, 2018, with Jian Li and Fabienne Weber, Economics Letters, Vol. 162, 162-166.
A careful look at the US price-dividend ratios and bond prices before and after the 2009 financial crisis suggests that, after the crisis, there are additional hidden rare-disaster risks, while the great rise in the US stock index (which has grown more than the US GDP since their pre-crisis peaks) is largely due to the non-occurrence of additional post-crisis disasters..
Strategic Exploitation of a Common-Property Resource Under Rational Learning About its Reproduction, 2015, Dynamic Games and Applications, Vol. 5, 94–119.
Strategic Exploitation of a Common-Property Resource Under Uncertainty, 2013, with Elena Antoniadou and Leonard J. Mirman, Journal of Environmental Economics and Management, Vol. 65(1), 28–39.
Saving Rates and Portfolio Choice with Subsistence Consumption, 2012, with Carolina Achury and Sylwia Hubar, Review of Economic Dynamics, Vol. 15(1), 108–126.
Evidence on the Insurance Effect of Redistributive Taxation, 2010, with Charles Grant, Alex Michaelides, and Mario Padula, Review of Economics and Statistics, Vol. 92(4), pp. 965-973.
Optimal Growth and Uncertainty: Learning, 2009, with Leonard J. Mirman and Marc Santugini, Journal of Economic Theory, January, Vol. 144, pp. 280-295.
Nonmarket Household Time and the Cost of Children, 2009, with Carsten Schröder and Ulrich Schmidt, Journal of Business and Economic Statistics, January, Vol. 27(1), pp.42-51.
The Effects of Market Structure on Industry Growth: Rivalrous Nonexcludable Capital, 2007, with Leonard J. Mirman, Journal of Economic Theory, Vol. 133, March, pp. 199-218.
On the Income Dependence of Equivalence Scales, 2005, with Carsten Schröder and Ulrich Schmidt, Journal of Public Economics, Vol. 89(5-6), June, pp. 967-996.