Working Paper:

• Misperceived Law of Motion in Macroeconomic Expectations (slides), submitted

             - Conventional test of RE detects biases in forecasts through the lens of an orthogonal projection.
             - Our method detects inconsistency in forecasts through the lens of a self-adjoint operator.
             - Implications for over-extrapolation, cognitive discounting, reduced complexity, and level-k thinking. 
             Funded by CityU Start-up Grant 7200696 (by June 2024, HKD 400,000)​

• Monetary Policy in Open Economies with Production Networks (slides)
  (with Yicheng Wang, Le Xu, and Francesco Zanetti), R&R at JME

             - A formula of how sectoral inflation affects the output gap via CPI, expenditure switching, and profit channels.
             - A method to derive the 2nd-order welfare loss through a 2nd-order Hulten's theorem in complex economies.
             Funded by ​RGC-GRF 1150823 (by Dec 2025, HKD 470,583)​​​

• Procyclical Productivity in New Keynesian Models (slides) 
  ​(with José-Víctor Ríos-Rull), R&R at REStud

             - A search model of capacity utilization via occupancy rate instead of costly capital utilization intensity.
             - A mapping from micro elasticities of search and matching to macro cyclicality of occupancy rate.             
             - A shift-share instrument that identifies the demand-driven movement of TFP at the firm level.
             - A demand-driven efficiency wedge in NK models that improves the IRF matching in all aspects.​

• Level-k DSGE and Monetary Policy, updated soon.

             - Lower-order beliefs match consumer expectations and generate repeated boom-bust cycles.

• Rehypothecation and Intermediary Leverage

             - Broker-dealer leverage relies on a moderate level of adverse selection in collateral quality.

Work in Progress:​

• ​The Entrepreneur Channel of Monetary Policy Transmission (with Yicheng Wang)

             ​- Entrepreneurs bear and transmit a large proportion of aggregate risks.
             Funded by RGC-ECS 21501720 (by June 2024, HKD 543,900)

• Service Inflation and Missing Pass-Through (slides) (with Yicheng Wang and Le Xu)

             - Service industries have lower price pass-through on top of lower price rigidities.

• Industry Heterogeneity, Production Networks, and Monetary Policy (slides) (with Jianhong Xin and Le Xu)

             ​- Estimate a model with production networks to match sectoral impulse responses.
             Funded by CityU-SRG 7005374 (Sep 2019-Feb 2022, HKD 100,000)

Early Publications

• 2013. “Housing and Saving with Finance Imperfection”, Annals of Economics and Finance 14(1): 207-248. (with Yanbin Chen and Fangxing Li)

           - Housing demand increases the saving rate when home equity withdrawal is limited.

• ​2013. “The Impact of China’s Inflation on Wealth Inequality”, Economic Research Journal (经济研究) 48(8): 4-15. (with Yanbin Chen, Jun Chen, and Weize Chen)
• 2011. “How does Housing Price Affect Household Saving Rate and Wealth Inequality?”, Economic Research Journal (经济研究), 46(10): 25-38. (with Yanbin Chen)
• 2010. “Advance in Macroeconomics: Bewley Model”, Economic Research Journal (经济研究), 45(7): 141-151. (with Yanbin Chen and Fangxing Li)

Discussion

• A High-frequency Measure of Chinese Monetary Policy Shocks (slides)