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Author:Hong, Sungki 

Journal Article
How Important Are Production Networks to the U.S. Economy?
As manufacturing grows more sophisticated, industries become more interconnected through production networks.
AUTHORS: Sun, Qiuhan; Shell, Hannah; Hong, Sungki
DATE: 2018

Journal Article
60% of District's Jobs Could Face Automation in the Next 20 Years
Jobs in the St. Louis Fed?s District face a higher risk of automation than do jobs nation-wide. Smaller MSAs in the District will face bigger impact.
AUTHORS: Shell, Hannah; Hong, Sungki
DATE: 2018

Journal Article
Moving In, Moving Out: The Migration Pattern of the Eighth District
Education and income differed between those leaving and those entering the District states from 2013-2017.
AUTHORS: Shell, Hannah; Hong, Sungki
DATE: 2019

Journal Article
Mapping the U.S. Production Network: Identifying Hub Industries
Identifying key suppliers and buyers could help identify the cause of certain economic downturns.
AUTHORS: Hong, Sungki; Sun, Qiuhan; Shell, Hannah
DATE: 2018

Journal Article
The Impact of Automation on Inequality
Occupations with large employment and low income have a higher automation probability.
AUTHORS: Hong, Sungki; Shell, Hannah
DATE: 2018

Journal Article
Industry Connectivity: A Case Study of the Construction Industry
Industries most related to the construction industry were hit harder by the Great Recession.
AUTHORS: Shell, Hannah; Hong, Sungki
DATE: 2018

Journal Article
Firms’ Price-Markup Dynamics During the Great Recession
The customer capital model is consistent with Great Recession markup dynamics.
AUTHORS: Hong, Sungki
DATE: 2018

Journal Article
Price Markups for Small and Large Firms Over the Business Cycle
In this essay, I measure markup behaviors at the firm level (as opposed to the aggregate level usually measured in the literature). I use firm-level data in manufacturing sectors of France from the Bureau van Dijk (BvD) Amadeus dataset. I focus on the manufacturing sector because it suits the estimation of production functions.
AUTHORS: Hong, Sungki
DATE: 2018

Working Paper
Markup Cyclicality: A Tale of Two Models
Many models in the business cycle literature generate counter-cyclical price markups. This paper examines if the prominent models in the literature are consistent with the empirical findings of micro-level markup behavior in Hong (2016). In particular, I test the markup behavior of the following two models: (i) an oligopolistic competition model, and (ii) a New Keynesian model with heterogeneous price stickiness. First, I explore the Atkeson and Burstein (2008) model of oligopolistic competition, in which markups are an increasing function of firm market shares. Coupled with an exogenous uncertainty shock as in Bloom (2009), i.e. a second-moment shock to firm productivities in recessions, this model results in a countercyclical average markup, as in the data. However, in contrast with the data, this model predicts that smaller firms reduce their markups. Second, I calibrate both Calvo and menu cost models of price stickiness to match the empirical heterogeneity in price durations across small and large firms, as in Goldberg and Hellerstein (2011). I find that both models can match the average counter-cyclicality of markups in response to monetary shocks. Furthermore, since small firms adjust prices less frequently, they exhibit greater markup counter-cyclicality, consistent with the empirical patterns. Quantitatively, however, only the menu cost model, through its selection effect, can match the extent of the empirical heterogeneity in markup cyclicality. In addition, both sticky price models imply pro-cyclical markup behavior in response to productivity shocks.
AUTHORS: Hong, Sungki
DATE: 2017-09-21

Working Paper
Customer Capital, Markup Cyclicality, and Amplification
This paper studies the importance of firm-level price markup dynamics for business cycle fluctuations. Using state-of-the-art IO techniques to measure the behavior of markups over the business cycle at the firm level, I find that markups are countercyclical with an average elasticity of -1.1 with respect to real GDP. Importantly, I find substantial heterogeneity in markup cyclicality across firms, with small firms having significantly more counter-cyclical markups than large firms. Then, I develop a general equilibrium model by embedding customer capital (due to deep habits as in Ravn, Schmitt-Grohe, and Uribe, 2006) into a standard Hopenhayn (1992) model of firm dynamics with entry and exit. The calibrated model replicates these empirical facts and produces counter-cyclical firm sales dispersions consistent with the data. The resulting input misallocation amplifies both the volatility and persistence of the aggregate productivity shocks driving the business cycle.
AUTHORS: Hong, Sungki
DATE: 2017-04-30

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