Working papers
On the Investment Network and Development, August 2024 New version!
with Lucia Casal
[paper]
[online appendix][slides][web with our data]
Our paper introduces the first harmonized measures of the investment network across the development spectrum and documents novel empirical regularities. We then propose a simple theory linking disparities in this network and disparities in income per capita across countries. We show that Domar weights and the elasticity of output to sectorial productivity are non-trivial functions of the investment network and of the equilibrium sectorial investment rates along the Balanced Growth Path. For our sample of 58 countries, we show that 33% of the cross-country differences in steady state income per capita can be accounted for by disparities in the investment network. These differences in the “technology" for producing new capital are double what a standard development accounting exercise would predict for the role of capital in income disparities.
Capital-Embodied Structural Change, November 2023 New!
with Elisa Keller
[paper]
We document systematic differences in price of investment relative to consumption across sectors driven by disparities in the types of equipment used for production. Through a simple accounting exercise we show that these price disparities account for almost all of the shift in labor productivity in agriculture relative to manufacturing and about a third of the shifts in labor productivity in services relative to manufacturing.
Mechanizing Agriculture, May 2022
with Namrata Kala
revision requested American Economic Review
out of the field (again)
[paper][citation]
[slides][blog entries: econ that matters, VOXDev]
An RCT that subsidizes farmers access to productive capital. Mechanization generates labor savings in stages of production that are not mechanized, and labor savings for members of the household that are mostly engaged in worker supervision. We build a theory of mechanization decisions that depend on the incidence of moral hazard in labor markets, and show that welfare gains from mechanization depend on the incidence of those frictions.
Economies of Density and Congestion in the Sharing Economy, January 2024
with Hester Zhang and Namrata Kala
[paper]
[slides][blog entry: IGC]
The distributional and efficiency effects of government interventions in rental markets for productive capital are not well-understood. We study them and show that market mechanisms can grant access to productive capital to small-scale producer even when large-scale producers are prioritized. The reason is that small-scale producers bring density in demand and improve capacity utilization.
with Lucia Casal
[paper]
[online appendix][slides][web with our data]
Our paper introduces the first harmonized measures of the investment network across the development spectrum and documents novel empirical regularities. We then propose a simple theory linking disparities in this network and disparities in income per capita across countries. We show that Domar weights and the elasticity of output to sectorial productivity are non-trivial functions of the investment network and of the equilibrium sectorial investment rates along the Balanced Growth Path. For our sample of 58 countries, we show that 33% of the cross-country differences in steady state income per capita can be accounted for by disparities in the investment network. These differences in the “technology" for producing new capital are double what a standard development accounting exercise would predict for the role of capital in income disparities.
Capital-Embodied Structural Change, November 2023 New!
with Elisa Keller
[paper]
We document systematic differences in price of investment relative to consumption across sectors driven by disparities in the types of equipment used for production. Through a simple accounting exercise we show that these price disparities account for almost all of the shift in labor productivity in agriculture relative to manufacturing and about a third of the shifts in labor productivity in services relative to manufacturing.
Mechanizing Agriculture, May 2022
with Namrata Kala
revision requested American Economic Review
out of the field (again)
[paper][citation]
[slides][blog entries: econ that matters, VOXDev]
An RCT that subsidizes farmers access to productive capital. Mechanization generates labor savings in stages of production that are not mechanized, and labor savings for members of the household that are mostly engaged in worker supervision. We build a theory of mechanization decisions that depend on the incidence of moral hazard in labor markets, and show that welfare gains from mechanization depend on the incidence of those frictions.
Economies of Density and Congestion in the Sharing Economy, January 2024
with Hester Zhang and Namrata Kala
[paper]
[slides][blog entry: IGC]
The distributional and efficiency effects of government interventions in rental markets for productive capital are not well-understood. We study them and show that market mechanisms can grant access to productive capital to small-scale producer even when large-scale producers are prioritized. The reason is that small-scale producers bring density in demand and improve capacity utilization.
Publications
Technology and the Task Content of Jobs across the Development Spectrum
with Elisa Keller and Yongs Shin.
WorldBank Economic Review, July 2023
We harmonize two worker surveys to construct cross-country measures of task intensity across occupations. We document systematic differences in task intensity within occupations at different stages of development. We show that the decline in employment of routine intensive jobs is global, likely indicative of the global reaches of technical change.
[paper][citation]
[data appendix][replication]
version commissioned by STEG [paper]
with Elisa Keller and Yongs Shin.
WorldBank Economic Review, July 2023
We harmonize two worker surveys to construct cross-country measures of task intensity across occupations. We document systematic differences in task intensity within occupations at different stages of development. We show that the decline in employment of routine intensive jobs is global, likely indicative of the global reaches of technical change.
[paper][citation]
[data appendix][replication]
version commissioned by STEG [paper]
Occupational Exposure to Capital Embodied Technical Change
with David Jaume and Elisa Keller
American Economic Review, June 2023
First measures of capital and of the elasticity of substitution between capital and labor in each occupation. Despite large measured disparities in the decline in the price of capital across occupations, heterogeneity in the elasticity of substitution drives the bulk of the observed labor reallocation and shift in occupational wage premium.
[paper][citation]
[slides][online appendix][replication][web with our data]
with David Jaume and Elisa Keller
American Economic Review, June 2023
First measures of capital and of the elasticity of substitution between capital and labor in each occupation. Despite large measured disparities in the decline in the price of capital across occupations, heterogeneity in the elasticity of substitution drives the bulk of the observed labor reallocation and shift in occupational wage premium.
[paper][citation]
[slides][online appendix][replication][web with our data]
Technical Change and the Demand for Talent
with Elisa Keller
Journal of Monetary Economics, July 2022.
Carnegie-Rochester-NYU Conference Series on Public Policy.
To what extent has technical change mitigated or exacerbated barriers to labor market reallocation faced by different demographic groups? Overall, capital-embodied technical change mitigated the impact of labor market barriers for aggregate output per worker, but it fuelled wage inequality across gender and race.
[paper][citation]
[slides] [replication][web with our data]
with Elisa Keller
Journal of Monetary Economics, July 2022.
Carnegie-Rochester-NYU Conference Series on Public Policy.
To what extent has technical change mitigated or exacerbated barriers to labor market reallocation faced by different demographic groups? Overall, capital-embodied technical change mitigated the impact of labor market barriers for aggregate output per worker, but it fuelled wage inequality across gender and race.
[paper][citation]
[slides] [replication][web with our data]
Capital Obsolescence and Agricultural Productivity
with Elisa Keller
The Quarterly Journal of Economics, February 2021.
We build the first available measures of quality-adjusted capital stocks in agriculture across countries, exploiting prices and old and new equipment. We show that poor countries are not only less capital-intensive, but also have lower quality of capital than rich countries. Once adjusting for quality, differences in capital stocks account for almost twice as much of the agricultural labor productivity disparities across countries than previously thought.
[paper][citation]
[slides][online appendix][replication][dataverse][erratum]
[ blog entry: focoeconomico]
with Elisa Keller
The Quarterly Journal of Economics, February 2021.
We build the first available measures of quality-adjusted capital stocks in agriculture across countries, exploiting prices and old and new equipment. We show that poor countries are not only less capital-intensive, but also have lower quality of capital than rich countries. Once adjusting for quality, differences in capital stocks account for almost twice as much of the agricultural labor productivity disparities across countries than previously thought.
[paper][citation]
[slides][online appendix][replication][dataverse][erratum]
[ blog entry: focoeconomico]
Aggregate Fluctuations and the Industry Structure of the US Economy
European Economic Review, October 2020.
I document cyclical movements in the cost share of goods produced by investment oriented and goods oriented sectors, and show how they discipline heterogeneous elasticities of substitution in intermediate inputs across sectors. This heterogeneity increases shock amplification in the economy relative to a common elasticity framework.
[paper][citation]
[online appendix][replication]
European Economic Review, October 2020.
I document cyclical movements in the cost share of goods produced by investment oriented and goods oriented sectors, and show how they discipline heterogeneous elasticities of substitution in intermediate inputs across sectors. This heterogeneity increases shock amplification in the economy relative to a common elasticity framework.
[paper][citation]
[online appendix][replication]
Who Quits Next? Firm Growth in Growing Economies
with Emircan Yurdagul
Economic Inquiry, October 2018.
Differences in firm employment distributions are not informative of cross-country disparities in aggregate growth, while firm churning (as reflected in the age distribution) and average firm productivity are. We build a tractable theory of growth and firm dynamics and show that disparities in the probability of success in firm growth can explain two-thirds of the variation in growth.
[paper] [citation]
with Emircan Yurdagul
Economic Inquiry, October 2018.
Differences in firm employment distributions are not informative of cross-country disparities in aggregate growth, while firm churning (as reflected in the age distribution) and average firm productivity are. We build a tractable theory of growth and firm dynamics and show that disparities in the probability of success in firm growth can explain two-thirds of the variation in growth.
[paper] [citation]
Asymmetry, Complementarities and Federal Reserve Forecasts
with Riccardo DiCecio, Ivana Komunjer, and Michael Owyang
Journal of Money, Credit and Banking, December 2018.
The literature has found that FED's forecast for unemployment, output and inflation are rationalizable but asymmetric along the cycle. We show that a a non-separable loss function induces symmetry in FEDs forecast for unemployment, but that there is systematic bias in the FED's forecasts for output and inflation.
[paper][citation]
with Riccardo DiCecio, Ivana Komunjer, and Michael Owyang
Journal of Money, Credit and Banking, December 2018.
The literature has found that FED's forecast for unemployment, output and inflation are rationalizable but asymmetric along the cycle. We show that a a non-separable loss function induces symmetry in FEDs forecast for unemployment, but that there is systematic bias in the FED's forecasts for output and inflation.
[paper][citation]
Selected work in progress
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The Origins of Structural Transformation, January 2025
with Mayara Felix and Kristina Manysheva We study the micro features of the process of structural change, with a focus on the effect of firm entry into non-agriculture for farm entry and exit, technology adoption, and land and labor reallocation in the agriculture sector. We show that productivity improvements accompanied by labor demand shifts in non-agriculture are effective in transforming the agricultural sector. We propose a novel model of structural change that accommodates this rich micro structure and study the impact for structural change of policies that target directly productivity improvements in agriculture versus those that target the non-agriculture sector. Markup trends: Implications for embodied technology and the labor share, November 2023 with Gianluca Violante We show that the entire increase in the aggregate markup since 1980s can be attributed to firms producing in equipment sectors and those in credit intermediation. After accounting for markups, ISTC is 0.5 percentage point faster than previously thought, accelerating from 2.41% to 2.92% each year on average. Markups can explain half of the observed decline in the labor share in equipment, and account for 1p.p. of the aggregate decline in the labor share. Sectors other-than equipment account for the bulk of the aggregate labor share dynamics, where there are virtually no markup trends. Hibernating Industry Dynamics, Investment and Uncertainty September 2016
[paper][citation] [online appendix] |
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Discussions
- Oberfield, E. & Raval, D. "Micro and macro technology". November 2014, Slides
- Ottonelo, P. "Capital unemployment, financial shocks and investment slumps". March 2015, Slides
- Meza, F., Patrad, S. & Urrutia, C.," Credit, sectoral misallocation and productivity growth". March 2016, Slides
- Senga, T. " A new look at uncertainty shocks: imperfect information and misallocation". June 2016, Slides
- Ferriere, A., Navarro, G. & Reyes-Heroles, R. "Escaping the losses from trade". March 2019, Slides
- Boppart, T., Kiernan, P. , Krusell, P. & Malmerg, H. "The macroeconomics of intensive agriculture". July 2019, Slides
- Kogan, Papanikolau, Schmidt, Seegmiller. "Technology-skill complementarity and labor displacement". February 2022, Slides
- Ngai, R., Olivetti, C. and Petrongolo, B. "Structural Transformation over 150 years of Women's and Men's work", May 2022, Slides
- Park, H., and Shim, Y., "How Task-Biased is Capital-Embodied Innovation", July 2023, Slides
- Cheng T. , Gu J., Ngai R., Wang, J., "Sowing seeds of mobility", January 2025, Slides