Working Papers & Works in Progress
Working Papers & Works in Progress
Superstar Teams
[Latest version (v2.0) | Dec 2024] -- New version!
A theory where firm performance is rooted in the quality of its workforce; and heterogeneity across firms naturally arises from talent sorting motivated by complementarities in team production that endogenously arise due to skill specialization. This theory can help explain salient features and trends in the macro economy, such as the growing importance of between-firm wage inequality. It also demonstrates that for productivity gains from specialization to materialize, workers need to be matched with colleagues possessing complementary expertise.
Econ JM Best Paper Award, European Economic Association/Unicredit Foundation
Companion note "Human Capital at Work: Five Facts about the Role of Skills for Firm Productivity, Growth, and Wage Inequality" (OECD/with C. Criscuolo & P. Gal)
[OECD WP] [Manuscript]
For Whom the Bot Tolls: Skills and the Earnings Effects of AI (with L. Mann) -- Draft coming soon!
Who will gain and who will lose from AI-induced task automation? To answer this question, we develop, estimate, and apply a quantitative task-based model. In this theory, workers possess heterogeneous portfolios of task-specific skills, which govern both their exposure to productivity gains due to task complementarity and their ability to adapt to substitution by switching occupation. Leveraging the structure of the model and Bayesian techniques, we estimate the distribution of (unobserved) multi-dimensional skills. To implement our estimation, we use data from the NLSY and LLM-generated occupational time diaries. The estimated model matches salient empirical features of worker mobility. We use our framework to quantify the distribution of dynamic earnings effects due to frontier AI technologies. As a proof-of-concept, we study the labor market impact of self-driving vehicles. In ongoing work, we are extending theory, estimation, and our quantitative analysis of AI-induced automation.
Upcoming presentations: Columbia U, Minneapolis Fed, Midwest Macro, BSE Summer Forum, SED
Firms as Foragers (with V. Carvalho)
Supported by a ~£38,000 grant from the Keynes Fund.
Project on Teams & Firm-Level Growth (with T. Ifergane)
Workers, Capitalists, and the Government: Fiscal Policy and Income (Re)Distribution, with C. Cantore
Journal of Monetary Economics, Vol. 119, pp. 58-74, 2021 [Published version - open access], [Online appendix], [Replication files], [Slides]
A capitalist-worker two-agent New Keynesian model to study the interaction of fiscal policy and household heterogeneity in a tractable environment. The model is consistent with micro data on empirical intertemporal marginal propensities to consume and it avoids implausible profit income effects on labor supply. Relative to the traditional two-agent model, these features imply, respectively, a lower sensitivity of consumption to the composition of public financing; and smaller fiscal multipliers alongside pronounced redistributive effects.
Volatile Hiring: Uncertainty in Search and Matching Models, with W. Den Haan and P. Rendahl
Journal of Monetary Economics, Vol. 123, pp. 1-18, 2021 [Published version - open access], [Online appendix ], [Replication files], [Short slides | April 2021], [VoxEU column | Sep 2021]
We study the hypothesis that heightened uncertainty leads to higher unemployment because firms prefer to adopt a "wait-and-see" approach to posting vacancies. Contrary to common belief, option-value considerations play no role in the standard search-and matching model with free entry. Constructively, we show that when the mass of entrepreneurs is finite and there is heterogeneity in firm-specific productivity, a rise in perceived uncertainty robustly increases the option value of waiting and reduces job creation.
The Risk-Premium Channel of Uncertainty: Implications for Unemployment and Inflation, with H. Lee and P. Rendahl
Review of Economic Dynamics, Vol. 51, pp. 117-137, 2023 [Online Appendix], [Replication files], [Slides for SITE | Sep 2022], [Cambridge INET Special Feature]
This paper argues that a risk-premium mechanism plays an important tole in the transmission of macroeconomic uncertainty shocks to the labor market. In a quantitative model, this channel accounts for a significant fraction of the uncertainty-induced rise in unemployment, and it implies that uncertainty shocks are less deflationary than regular demand shocks, nor can they be fully neutralized by monetary policy.