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Working Paper
Are Supply Networks Efficiently Resilient?
We show that supply networks are inefficiently, and insufficiently, resilient. Upstream firms can expand their production capacity to hedge againstsupply and demand shocks. But the social benefits of such investments arenot internalized due to market power and market incompleteness. Upstreamfirms under-invest in capacity and resilience, passing-on the costs to downstreamfirms, and drive trade excessively towards the spot markets. There isa wedge between the market solution and a constrained optimal benchmark,which persists even without rare and large shocks. Policies designed to incentivize ...
Working Paper
The supply and demand of skilled workers in cities and the role of industry composition
The share of high-skilled workers in U.S. cities is positively correlated with city size, and this correlation strengthened between 1980 and 2010. Furthermore, during the same time period, the U.S. economy experienced a significant structural transformation with regard to industrial composition, most notably in the decline of manufacturing and the rise of high-skilled service industries. To decompose and investigate these trends, this paper develops and estimates a spatial equilibrium model with heterogeneous firms and workers that allows for both industry-specific and skill-specific ...
Journal Article
Hidden value: how consumer learning boosts output
Iphones. Ipads. Wikipedia. Google Maps. Yelp. TripAdvisor. New digital devices, applications, and services offer advice and information at every turn. The technology around us changes fast, so we are continually learning how best to use it. This increased pace of learning enhances the satisfaction we gain from what we buy and increases its value to us over time, even though it may cost the same ? or less. However, this effect of consumer learning on value makes inflation and output growth more difficult to measure. As a result, current statistics may be undervaluing household purchasing power ...
Discussion Paper
Demand for Goods Grows: Will Manufacturers Be Able to Meet It?
Working Paper
Perspectives on the Labor Share
As of 2022, the share of U.S. income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the ...