Publications

The Covid 19 pandemic led to a global macroeconomic shock of unprecedented magnitude.
Besides a death toll that, at the time of writing has surpassed 3.3 million, the pandemic
led to the worst peacetime decline in economic activity since the Great Depression.
Central banks reacted quickly, outpacing their responses to the 2007-2009 global financial
crisis in terms of both speed and scope. Central banks in advanced economies deployed
a vast range of tools aimed at guaranteeing that the private sector had continuous access
to credit and also cooperated with fiscal authorities with the objective of limiting the
costs of the fiscal response to the crisis. Central banks in some emerging economies were
also able to adopt expansionary policies and deployed asset purchases without serious
consequences in terms of inflation.

Some economists have argued that money-Önanced Öscal programs, sometimes called ìhe-
licopter money,î may be desirable in economies facing persistent economic weakness and low
ináation. We use a DSGE model to show that such programs could in principle provide signif-
icant stimulus (as in Gali 2020). However, we also show that these programs imply a radical
shift in the central bankís reaction function, and that the near-term stimulus to output and
ináation may be fairly small in the realistic case in which the public does not initially regard
the policy shift as credible, expectations are not very forward looking, and monetary policy
is constrained by the e§ective lower bound. We argue that monetary-Öscal cooperation that
involves a less dramatic shift in monetary policy ñ but more Öscal expansion ñ is likely to be
more e§ective under these circumstances because it would be more credible. Fiscal expansion
makes monetary policy more potent by boosting the equilibrium real interest rate path and
giving monetary policy more room to lower near-term yields, and monetary policy makes Öscal
policy more potent by keeping interest rates low and so limiting crowding out. We conclude by
discussing a number of historical examples of monetary-Öscal cooperation in light of our model.

To create a straightforward scoring procedure based on widely available, inexpensive financial data that provides an assessment of the financial health of a hospital.

This paper develops a new framework for studying multiproduct intermediaries when consumers demand multiple products and face search frictions. We show that a multiproduct intermediary is profitable even when it does not improve consumer search efficiency. The intermediary optimally stocks high-value products exclusively to attract consumers to visit and then profits by selling nonexclusive products that are relatively cheap to buy from upstream suppliers. Relative to the social optimum, the intermediary tends to be too big and stock too many products exclusively. We use the framework to study the design of shopping malls and the impact of direct-to-consumer sales by upstream suppliers on the retail market.

Not one inch. With these words, Secretary of State James Baker proposed a hypothetical bargain to Soviet leader Mikhail Gorbachev after the fall of the Berlin Wall: if you let your part of Germany go, we will move NATO not one inch eastward. Controversy erupted almost immediately over this 1990 exchange—but more important was the decade to come, when the words took on new meaning. Gorbachev let his Germany go, but Washington rethought the bargain, not least after the Soviet Union’s own collapse in December 1991. Washington realized it could not just win big but win bigger. Not one inch of territory needed to be off limits to NATO.

On the thirtieth anniversary of the Soviet collapse, this book uses new evidence and interviews to show how, in the decade that culminated in Vladimir Putin’s rise to power, the United States and Russia undermined a potentially lasting partnership. Prize-winning historian M. E. Sarotte shows what went wrong.

In May of 2019, Vicki Hollub, the CEO of Occidental Petroleum (Oxy), pulled off a blockbuster. Bidding against Chevron, one of the world's largest oil firms, she had managed to buy Anadarko, another oil company that was roughly the size of Oxy.  Hollub believed that the combination of the two firms brought the possibility for billions of dollars in synergies, more than offsetting the cost of the acquisition.  The deal would make Oxy the largest producer in what had become the world's richest oil field, the Permian Basin. Hollub called the deal "transformative" and a "once in a generation opportunity."

The stock market appeared to disagree with Hollub's assessment, as Oxy shares dipped after the announcement of the deal. Leading shareholders were quite vocal about their dissatisfaction. Even before the deal was accepted, many accused Hollub of empire building at the expense of shareholder value. After the deal closed, activist investor Carl Icahn filed suit against Oxy to force it to release its private records of the deal and to call a shareholder's meeting to rein in the management.

Observers wondered which of the two sides was right. Had Hollub hurt shareholder value with Oxy's ambitious deal, or had she bolstered a mid-size oil firm and made it a major player in the petroleum industry? Why didn't investors see the tremendous synergies in which Hollub fervently believed?

For online resource allocation problems, we propose a new demand arrival model where the sequence of arrivals contains both an adversarial component and a stochastic one. Our model requires no demand forecasting; however, because of the presence of the stochastic component, we can partially predict future demand as the sequence of arrivals unfolds. Under the proposed model, we study the problem of the online allocation of a single resource to two types of customers and design online algorithms that outperform existing ones. Our algorithms are adjustable to the relative size of the stochastic component; our analysis reveals that as the portion of the stochastic component grows, the loss due to making online decisions decreases. This highlights the value of (even partial) predictability in online resource allocation. We impose no conditions on how the resource capacity scales with the maximum number of customers. However, we show that using an adaptive algorithm—which makes online decisions based on observed data—is particularly beneficial when capacity scales linearly with the number of customers. Our work serves as a first step in bridging the long-standing gap between the two well-studied approaches to the design and analysis of online algorithms based on (1) adversarial models and (2) stochastic ones. Using novel algorithm design, we demonstrate that even if the arrival sequence contains an adversarial component, we can take advantage of the limited information that the data reveal to improve allocation decisions. We also study the classical secretary problem under our proposed arrival model, and we show that randomizing over multiple stopping rules may increase the probability of success.

Careers—defined as the individually perceived sequence of attitudes and behaviors associated with work-related experiences and activities over the span of a person’s life (Hall, 2002)—inherently and inextricably involve the role of time. At the individual level, time—and particularly change over time—is essential for understanding adults’ lives and careers, as noted by both traditional adult development theories.

We develop a theoretical model of optimal growth in two-sided markets. The model posits that market output (number of transactions) is a function of the stock of supply and demand. This market output is modeled using a homogeneous production function, which can have increasing or decreasing returns to scale. The supply and demand stock levels follow a growth model in which the rate of growth at each point in time is a function of both the surplus each side of the market receives and the attrition of supply and demand (supply and demand lifetimes). The surplus can be apportioned between the two sides of the market by changing the price paid to sellers and the price charged to buyers, which we assume the platform controls. Through these price levers, the platform can pay subsidies to one or both sides of the market. We investigate the behavior of optimal market growth, including the point at which the market becomes self-sustaining and the long-run optimal size of the market. We characterize the optimal balance between supply and demand as the market size grows and determine optimal subsidy policies that maximize discounted total profit. For the case of both increasing and decreasing returns without price constraints, we show the optimal policy is to grow using an impulse of subsidy spending (a subsidy shock) to move the market immediately to its optimal long-run size. This result is consistent with the race to growth observed in many two-sided markets like ride-sharing.

We study how the popularity of an incumbent president can influence the generosity of the relief effort in response to a natural disaster as reflected in the federal SBA loan program. We document that the loan amounts relative to reported damages are higher when popularity of the incumbent president is lower. This result is consistent with the catering view of disaster relief where the president approves higher amounts when his popularity is at a low point but may hold his ground when his popularity is high. We find that this catering behavior is amplified when public sentiment regarding the disaster is high (as measured by a metric designed from Google search volume).When the public sentiment is very high even a popular president may approve high disaster aid, further supporting our catering view. We also examine the effect of other factors that increase the political importance of the disaster (e.g., swing county, campaign donations, first term, and number of presidential visits) and find evidence of increased catering. Finally, there is some evidence of interaction of catering with credit scoring rules, suggesting discrimination in loan provision in favor of richer counties and against counties with a high percentage of African Americans. Our findings point to a new venue for politics in climate change in the area of disaster relief.

Drawing upon the comprehensive survey of the American Jewish population conducted in 2013 by the Pew Research Center, we estimate the trajectory of the population and its denominational segments, 50 years into the future. Our analysis relies upon estimates of the population in 2013, fertility rates, marriage behaviors, and denominational switching patterns as inputs into a model of population demographics. We project that over the next 50 years, the demographics of U.S. Jews are likely to change dramatically, with the share of the population that is Orthodox rising from 12 percent to 29 percent, with their share of the child population increasing from 22 percent to 51 percent. Among Reform and Conservative Jews, the number of 30- to 69-year-olds is projected to drop by approximately 46 percent over this period. We also project a slight drop in the total Jewish population followed by a recovery propelled by the growing Orthodox population.

Although it is widely assumed that procrastination is counterproductive, delaying task progress may have hidden benefits for creativity. Drawing on theories of incubation, we propose that moderate procrastination can foster creativity when employees have the intrinsic motivation and opportunity to generate new ideas. In two experiments in the United States, we tempted participants to engage in varying degrees of procrastination by making different numbers of funny YouTube videos easily accessible while they were supposed to be solving business problems. Participants generated more creative ideas in the moderate rather than low or high procrastination conditions. This curvilinear effect was partially mediated by problem restructuring and the activation of new knowledge. We constructively replicated and extended the curvilinear effect in a field study with Korean employees: procrastination predicted lower task efficiency but had an inverted-U-shaped relationship with creativity. Employees who procrastinated moderately received higher creativity ratings from their supervisors than employees who procrastinated more or less, provided that intrinsic motivation or creative requirement was high. We discuss theoretical and practical implications for time management, creativity, and motivation in organizations.