Research

Working Papers

• Household Liquidity Policy (Job Market Paper), with Patrick Moran
  We assess ‘household liquidity policy’, a novel approach to stimulating aggregate demand that relies on relaxed regulation instead of conventional fiscal tools. We analyse the effectiveness of these liquidity policies, focusing on a form that was widely used during the Covid-19 pandemic: early access to retirement savings accounts. In a heterogeneous agent model with retirement and present–biased households we find both liquidity and conventional fiscal policies can achieve similar boosts to aggregate consumption but have different distributional implications. Relative to fiscal policy, liquidity policy benefits wealthier workers, retirees, and future generations, due to its lower tax burden and added flexibility, but it is also highly regressive. Liquidity policy shifts the future financial burden of present–day stimulus onto poorer and more present–biased workers, who only feel the impact when it is too late to adjust. 

• Situational and Behavioral Determinants of Early Withdrawal from Retirement Accounts, with Patrick Moran
  Using a survey-elicited measure of psychological self-control and a policy change in Australia during Covid-19, we find that self-control issues significantly predict early withdrawals from retirement accounts. Individuals in the top quintile of self-control issues are 60% more likely to withdraw than those in the bottom quintile. Self-control is a stronger predictor of early withdrawal than other behavioral factors such as financial literacy, planning horizons, or personality traits. The effects are economically meaningful: eliminating self-control issues could reduce early withdrawals by 24% - as large as the effect of adverse income shocks on withdrawals during Covid-19.

• The Nested-Drift Algorithm: A New Solution Approach to Continuous Time Problems with Multiple Endogenous State Variables, [code] with Soroush Sabet
  We introduce a new algorithm for solving continuous time problems with multiple endogenous state variables in a finite–difference scheme. The algorithm extends the logic of up–winding to its logical extreme in a way that meets the necessary conditions for local convergence (Barles and Souganidis, 1991). It is consistent because the directions of state–drift are never in conflict, and constraints are applied non–linearly. It is efficient because it nests the search for these state–drifts in a way that ensures costly root–finding is only performed after other alternatives are exhausted. The algorithm improves on the existing ‘split–drift’ approach from (Kaplan et al., 2018; Achdou et al., 2022), which can fail under some parameter settings because it is not guaranteed to be consistent.

Work in Progress

• Yield to Temptation: A Comparison of Present-Biased Preferences in Continuous Time

Publications & Policy work

• Disunited Kingdom? Brexit, Trade and Scottish Independence, with Hanwei Huang and Thomas Sampson
  CEP Brexit Analysis No. 17 (2021) [LSE blog] [VOX EU blog]

• Market Power and Monetary Policy, with Tommaso Aquilante, Shiv Chowla, Nikola Dacic, Andrew Haldane, Riccardo Masolo, Martin Seneca, and Srdan Tatomir
  Bank of England Working Paper No. 798 (2019) [Speech]

• Decomposing Differences in Productivity Distributions
  Bank of England Working Paper No. 740 (2018) [BU blog]

• Organizational Cultures of Corruption, with Gautam Bose
  Journal of Public Economic Theory (2017) 19:1