Research Interest
My research interests are economic growth, innovation, and misallocation.
I have worked on continuous-time models with finite time difference method to deal with heterogeneous agent models.
Research
Finance, Misallocation and Growth: Quantifying the Contribution of Financial Market Imperfections and Reforms to East Asian Growth Miracles (Job Market Paper)
We develop an endogenous growth model to study the impact of financial constraints on economic growth through capital misallocation. Resources are not efficiently allocated to their best uses, thereby reducing aggregate efficiency. However, the standard misallocation literature only focuses on differences in the level of output, but not in economic growth. In this paper, misallocation from capital market imperfection affects not only the level of output but also the growth rate of the economy. The model exhibits both transitory (short-term, but persistent) impacts as well as the permanent impact (long-term) which many current models miss. These features capture the pre and post-Asian growth miracle where the growth rate has decelerated after financial reform but converged to some positive growth rate higher than before the reform. Self-financing partially undoes misallocation, but has a downward effect on growth - overaccumulation of safe assets diverts resources from optimal investment in R&D.
The Role of Sectoral Linkages in International Trade
This paper develops a multi-sector model based on Melitz (2003) with input-output linkages. In a fully characterized general equilibrium model, the role of linkages in determining the welfare gains from trade is analyzed. Opening an economy initiates a positive chain reaction as access to new goods spreads through the input-output structure of the economy. This process produces a new channel for welfare gains that is not present in standard models. The results show modest improvement in the welfare gains from trade but are ultimately still disappointing due to the small proportion of tradable goods relative to non-tradable goods.