Fields of Interest:
Economics and Governance of Transformative AI, Imperfect Capital Markets, International Finance, Public Finance, Inequality
Working Papers on the Economics of AI:
Frontier AI Regulation: Managing Emerging Risks to Public Safety [PDF], July 2023Proposes a tangible framework for how to regulate the emerging safety risks from the most advanced "frontier" AI systems
How innovation affects labor markets: an impact assessment [PDF], Feb. 2023Develops a tangible 5-step framework to evaluate the labor market impact of an innovation and uses it to show that chatbots hurt unskilled workers Labor-saving advances in AI may undo the gains from globalization and pose new challenges for economic development Analyzes how to steer technological progress in directions that complement labor rather than displacing it - cited by The Economist's Free ExchangeProvides a guide to the vast range of possibilities for output growth, wages, and the labor share under scenarios in which AI is truly transformativeAnalyzes an economic future in which humans and machines interact symmetrically and shows the possibility of machine singularity coexisting with human stagnationWorker-replacing technological progress may super-charge economic growth and inequality; we discuss implications for public policyDigital technologies intrinsically lead to higher markups and a lower labor share, favoring the creation of superstars
Editor, Oxford Handbook of AI Governance, with Justin Bullock et al., forthcoming, Oxford University Press, 2022
Working Papers on Macroeconomics and International Finance:
Macroprudential Taxes, Ratios, and Rents: Equivalences and Not-Quite Equivalences [PDF], with Daniel Harper, Jun 2021Analyzes how different types of macroprudential measures affect the distribution of the surplus created by regulationPublic health measures are essential to deal with COVID-19 because rational individuals internalize only $18k of the true $55k social cost of an infectionFollowing the flows of funds between borrowers and lenders explains the non-monotonic real effects of credit booms over time
Currency Wars or Efficient Spillovers? A General Theory of International Policy Cooperation [PDF], revision requested by Review of Economic Studies, Dec. 2018Provides a benchmark result for when the spillovers from national economic policymaking are globally efficientThe dynamics of risk-taking in the financial sector are driven by compositional effects, leading to novel effects of financial policy
Financial Innovation for Rent Extraction [PDF], Dec. 2014Argues that a significant fraction of financial innovations are designed to extract rents from formal or informal safety nets
Capital Controls and Currency Wars [PDF], Feb. 2013Studies spillover effects of capital account interventions and implications for policy coordination - cited in the Economist's Free Exchange
Insurance Properties of Local and Foreign Currency Bonds in Small Open Economies [PDF], July 2009Local currency and dollar bonds achieve full insurance in standard small open economy models
Excessive Dollar Borrowing in Emerging Markets: Balance Sheet Effects and Macroeconomic Externalities [PDF], Apr. 2007, updated 2011Emerging market borrowers take on too much dollar debt because they don't internalize the contribution to financial fragility
Publications: Lays out 26 use cases for large language models in economics and discusses the implications for the future of economic research Analyzes how AI could erode democracy by amplifying inequality and offers solutions If transformative AI makes human labor redundant, what are the economic and social implications, and how can we prepare for it? Distinguishes between the direct and social alignment problem and examines the role of AI governance to address social alignmentEvaluates to what extent the IMF's policy frameworks align with theoretical research on managing capital flowsDevelops a framework for AI developers to take into account the impact of their inventions on workers As the COVID-19 pandemic has accelerated automation, we need to renew efforts to steer advances in automation and AI to preserve a gainful role for human workersSurveys the literature on capital controls using a teachable model and an in-depth review of the empirical literature
Technological Progress, Artificial Intelligence, and Inclusive Growth [Publication | IMF WP], with Joseph Stiglitz, in Valerie Cerra et al. (eds.), How to Achieve Inclusive Growth, IMF and Oxford University Press, 2021.Lays out how to pursue inclusive growth when AI and other forms of emerging technologies threaten to reduce labor demand and increase inequality
Integrating Ethical Values and Economic Value to Steer Progress in Artificial Intelligence [Publication | WP], in Markus Dubber, Frank Pasquale and Sunit Das (eds.), Oxford Handbook of Ethics of Artificial Intelligence, pp. 463-479, Oxford University Press, July 2020.Complementing market incentives with ethical values is crucial to steer progress in AI in a direction that is beneficial for humanity at largeIt is optimal for policymakers to use a mix of ex-ante prudential measures and ex-post stimulus measures in response to financial crises riskDiscusses how to raise tax revenue when AI displaces labor and observes that the optimal tax rate on labor will go to zero
External societal costs of antimicrobial resistance in humans attributable to antimicrobial use in livestock [Publication | WP | Worksheet | Technical note], with Gabriel Innes et al., Annual Review of Public Health 41, pp. 141-157, Apr. 2020.Evaluates how antibiotic use in animal agriculture contributes to antibiotic resistance in human pathogens and quantifies the resulting externalitiesA dynamic model of counter-cyclical macro-prudential regulation for credit markets - cited in Economist's Economics Focus, WSJ.com
Artificial Intelligence and Its Implications for Income Distribution and Unemployment [Publication | WP | Presentation], with Joseph Stiglitz, in Ajay Agrawal, Joshua Gans and Avi Goldfarb (eds.), The Economics of Artificial Intelligence, pp. 349-390, NBER and University of Chicago Press, May 2019.Provides a systematic overview of the implications of "worker-replacing" technological progress for inequality - covered in New York Times, MarketWatch.com
Thoughts on DSGE Macroeconomics: Matching the Moment, but Missing the Point? [PDF | Cartoon | Chinese version], in Towards a Just Society: Joseph Stiglitz and 21st Century Economics, festschrift edited by Martin Guzman, Aug. 2018.Macroeconomics would benefit from greater methodological diversityFoundations for prudential capital controls to reduce the risk of financial crises in emerging economiesDevelops a general methodology to categorize & characterize pecuniary externalities from both imperfect risk-sharing and collateral constraintsNote: this paper subsumes my earlier working paper on "Systemic Risk-Taking: Amplification Effects, Externalities, and Regulatory Responses" [2011 ECB WP | 2012 update] and was previously also circulated under the title "Fire-Sale Externalities."Deleveraging leads to aggregate demand externalities at the ZLB that call for macroprudential regulation - cited in the WSJBoth instruments are needed in emerging economies that are at risk of financial instability because of large capital inflows
Undervaluation through Foreign Reserve Accumulation: Static Losses, Dynamic Gains [Publication | 2010 WB WP | update | VoxEU Op-Ed], with Luis Servén, Journal of International Money and Finance 64, pp. 104-136, Feb. 2016.Reserve accumulation may trigger positive learning-by-doing externalities in the tradable sector and improve welfareFinancial deregulation allows the financial sector to extract larger rents from the rest of societyProvides an introduction to quantitative models and the empirics of sudden stops, with ample online resourcesA primer that develops a simple formal model of emerging market balance sheet crises, externalities and capital flow regulationAn introduction to the emerging new literature on prudential capital controls in emerging economies - cited in the FT's Economists' Forum and the Economist's Free ExchangeCrises in one area of the world economy cause "hot money" to flow into other areas and create the risk of serial financial crisesProvides a simple three-period model of financial amplification and pecuniary externalities based on asset price feedback effects
An Econometric Method of Correcting for Unit Nonresponse Bias in Surveys [Publication | WP | Matlab code | Stata code], with Johan Mistiaen and Martin Ravallion, Journal of Econometrics, 136(1), pp. 213 - 235, Jan. 2007. Also World Bank Policy Research Working Paper No. 3711.
Survey Nonresponse and the Distribution of Income [Publication | PDF], with Johan Mistiaen and Martin Ravallion, Journal of Economic Inequality 4(1), pp. 33 - 55, Apr. 2006. Also World Bank Policy Research Working Paper No. 3543.
AI and Income Distribution on the Planet of Superstars, in Planet Algorithm: AI for a Predictive and Inclusive form of Integration, IDB Integration and Trade Journal 22(44), July 2018.
A Framework for Costing the Lowering of Antimicrobial Use in Food Animal Production, with Anthony D. So, Reshma Ramachandran, David C. Love, Jillian P. Fry and Christopher D. Heaney, Commissioned paper for the UK Review on Antimicrobial Resistance, May 2016.
Multilateral Aspects of Managing the Capital Account, with Jonathan Ostry and Atish R. Ghosh, IMF Staff Discussion Note 12/10, September 2012. See associated academic paper.
Emerging market economies after the crisis: trapped by global liquidity? in Volz, Ulrich (ed.), Financial Stability in Emerging Markets: Dealing with Global Liquidity, German Development Institute, pp. 35 - 39, Apr. 2012.
The Potential Consequences of Alternative Exchange Rate Regimes: A Study of Three Candidate Regions [Publication | OeNB WP #76], with Eduard Hochreiter and Pierre L. Siklos, International Journal of Finance & Economics 8(4), pp. 327 - 349, Sept. 2003.