Macroeconomics & International Finance Seminars

Fall 2017

Tuesday 1:403:00 p.m.
499 Engineering II

October 3
Zheng Liu, SF Fed
"The Slow Job Recovery in a Macro Model of Search and Recruiting Intensity"
Host: Grace Gu & Chenyue Hu
An estimated model with labor search frictions and endogenous variations in search intensity and recruiting intensity does well in explaining the slow job recovery after the Great Recession. The model features a sunk cost of vacancy creation, under which firms rely on adjusting both the number of vacancies and recruiting intensity to respond to aggregate shocks. This stands in contrast to the textbook model with free entry, which implies constant recruiting intensity. Our estimation suggests that fluctuations in search and recruiting intensity help substantially bridge the gap between the actual and model-predicted job filling and finding rates.

October 10
Ben Hebert, Standford GSB
"Optimal Corporate Taxation Under Financial Frictions"
Host: Chenyue Hu
We study the optimal design of corporate taxation when firms are subject to financial constraints. We find that corporate taxes should be levied on unconstrained firms, since those firms value resources inside the firm less than financially constrained firms. When the government has complete information about which firms are and are not constrained, this principle is sufficient to characterize optimal corporate tax policy. When the government (and other outsiders) do not know which firms are and are not constrained, the government can use the payout policies of firms to elicit whether or not the firm is constrained, and assess taxes accordingly. Using this insight, we discuss conditions under which a tax on dividends paid is the optimal corporate tax. We then extend this result to a dynamic setting, showing that, if the government lacks commitment, the optimal sequence of tax mechanisms can be implemented with a dividend tax. With commitment, we reach a very different conclusion– a lump sum tax on firm entry is optimal. We argue that these two models demonstrate an underlying principle, that optimal corporate taxes should avoid exacerbating financial frictions, and demonstrate that the structure of the financial frictions can drastically change the optimal policy.

October 17
Michael Weber, Chicago Booth
"Price Rigidities and the Granular Origins of Aggregate Fluctuations"
Host: Chenyue Hu

October 31
Julio Garin, Claremont McKenna
Host: Grace Gu & Carl Walsh

November 7
Eric Swanson, UC Irvine
Host: Grace Gu

November 14
Michael Magill, USC
Host: Carl Walsh & Hikaru Saijo

November 28
Toan Phan, UNC
Host: Grace Gu

December 5
Saki Bigio, UCLA
Host: Alonso Villacorta


Winter 2018