Growth and Development, Urban Economics, Economic Geography, Macroeconomics.
ReferencesProf. Jonathan Dingel
Job Market Paper
The Mechanics of Regional Growth: Evidence from a Large-Scale Skill Resettlement Program
Presented at: Chicago, UEA Vancouver, AMES CUHK, ESEM Lisbon, Midwest Macro LSU, WEAI San Diego.
China compulsorily relocated millions of educated youth from urban to rural areas during the late 1960s and 1970s. About two million sent-down youth permanently settled in those rural areas. I study the effects of the Down to the Countryside Movement on regional economic outcomes in subsequent decades. An exogenous increase in the high-skilled population resulted in faster regional population growth, but had no effect on regional productivity growth. The null effect on productivity growth accompanying the increase in population growth is due to the absence of capital investments in rural areas by the government. I provide evidence that the growth effects worked through the arrival of more migrants, an increase in educational attainment, and shifts in the employment structure towards skill-intensive sectors.
Published and Working Papers
On the Price Spread of Benchmark Crude Oils: A Spatial Price Equilibrium Model
(with Max S. Bennett), March 2017
Benchmark crude oils that are almost identical in physical composition exhibited dramatic divergence in prices in the recent decade, a phenomenon that rarely occurred in earlier decades. This paper develops a rational expectations two-period model of spatial price equilibrium, and departs from standard models by assuming an increasing marginal cost curve of transportation. We econometrically validate our model using a dataset that covers an extended time period. We demonstrate that this simple two-period model is sufficient to characterize key observed behaviors of the crude oil markets. The model allows us to determine the underlying causes of the unique phenomenon of the widening and subsequent narrowing of crude oil price spreads over the past decade. We find that the widening of the Brent-WTI spread from 2011 to 2013 was due to a positive supply shock in the Midwest that was constrained by insufficient transportation infrastructure, and that its subsequent narrowing from 2013 was primarily due to a structural decrease in the marginal cost of transportation out of Midwest to the rest of the U.S.
Optimal Beliefs in the Long Run: An Overlapping Generations Perspective
Economics Letters, 2012, 117(2): 525-527
People have the natural tendency to be optimistic and believe that good outcomes in the future are more likely, but also want to avoid overestimation that could result in bad decision-making. Brunnermeier and Parker (2005) and Brunnermeier et al. (2007) established an optimal beliefs framework that balances these two incentives. This paper follows and extends the optimal beliefs framework to consider optimal beliefs in the long run in an overlapping generations sense. Assuming no short-selling, results show that, in almost all cases, there does not exist a stable and interior long-term optimal belief.
Creating a Land of Opportunity? The Aggregate and Distributional Effects of Local Human Capital Shocks
Work in progress
Human capital shocks may have persistent effects on local economic outcomes. This provides potential opportunities for place-based policies to generate self-sustaining long-run gains. I build a dynamic spatial equilibrium model that captures the impact and propagation of local human capital shocks. Local human capital shocks directly alter the skill compositions in affected regions. A counterfactual analysis based on the model, therefore, is able to characterize post-shock transitional dynamics of the economy. I calibrate the model’s parameters using data from several historical episodes. Then, I run simulations for the United States to evaluate the aggregate and distributional effects of local human capital shocks.
Ad-hoc referee for Journal of Political Economy.