Working Paper:

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

             - Rational expectations can be rejected with consensus forecast data.
             - Linear Gaussian models with misperceived information structure are also rejected.
             - Forecasts of SPF are in favor of under-extrapolation and cognitive discounting but not reduced model complexity.
             - Forecasts of MSC are unaware of basic autocorrelation and comovement in macroeconomic variables.
             - The secret is to detect the inconsistency of forecast errors instead of the biases of them.
             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 Journal of Monetary Economics

             - A formula of how sectoral inflation affects aggregate distortion through CPI, export income, and profit income.
             - The sectoral importance is driven by import shares (direct and indirect).
             - Ignoring openness leads to overemphasis of sectors with more intensive export (direct and indirect).
             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 Review of Economic Studies

             - A directed search model that quantifies how demand affects production capacity occupancy in aggregate using household and firm level evidence.
             - The model helps resolve the puzzle of countercyclical labor share in NK models via endogenous efficiency and markup wedges.

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

             - Lower-order beliefs match consumer expectations and generates 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)

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 saving rate when home equity withdrawal is limited.

Publications in Chinese:

• ​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)