Job Market Candidates 2019

Curriculum Vitae

Fields: International Economics, Political Economy

Advisors: Daniele Tavani, Ramaa Vasudevan

Dissertation: Terms of Trade and Productivity Constraints as  Determinants of Export-Led Growth: Implications for Development  Policy

Job Market Paper: Terms of Trade: Price-competitiveness Matters

Abstract: Tests of the balance of payments constrained growth model typically focus on income elasticities of demand in the traded sector. The role of price-competitiveness is treated as negligible and often neglected. This paper presents alternative specifications for the terms of trade in conventional import and export demand equations. I show that by taking into consideration the export prices of foreign competitors and prices of domestic substitutes for imports, terms of trade becomes far more relevant in determining import and export demand and the corresponding equilibrium growth rates in a Keynesian framework. The results suggest policy combinations for developing economies given the absence of domestic substitutes for import goods and the dependence on exports as a source of foreign currency.

Matt Elmer

Curriculum Vitae

Fields: Environmental, Public, and Regional

Advisors: Robert Kling, Jordan Suter

Dissertation: Three Essays Evaluating Ecosystem Services: Monetizing Disturbances, Classifying Vulnerability, and Managing Ecosystem Conditions

Job Market Paper: Do Regular Wildfires Heat Up the Price of Drinking Water?

Abstract: Previous research has documented the negative impact of large extreme wildfires on water treatment cost, but small more frequent wildfires have been largely ignored, and the long-term capital response to wildfire remains unclear. This paper utilizes survey data for 144 drinking water systems spanning the state of Utah to assess whether small regular wildfires that occur upstream from drinking water intakes impact water provisioning cost and subsequent consumer prices across time. A panel analysis is assembled to assess 25 years of wildfire and estimate water provisioning cost and water demand. Permanent surface water intakes are found to be significantly influenced by small regular wildfire in both the short run (1 year after) and long run (10 years after). The results indicate that water system variable cost rises immediately following a wildfire, and that this encourages capital investment to reduce variable cost, resulting in a significant effect of wildfire on fixed cost in the long run. This is supported by testing the intertemporal relationship between water provisioning fixed cost and variable cost. I find a positive relationship between fixed cost and past variable cost, while there is an inverse relationship in any given year. The capital investment effect from wildfire is amplified for larger fires. The effect of wildfire in the medium run (5 years after) depends on fire characteristics as well as decisions to lower variable cost through investment. The impact of wildfire on water price is influenced by fire size, distance, and duration, as well as whether the affected water intake is permanent or seasonal. Post-fire management actions are also important, and the omission of information on management likely dampens the estimates in this study.  Estimates for the impact of regular wildfire on groundwater well and spring intakes are not statistically different from zero in this study.

Curriculum Vitae

Fields: Urban/Regional, Environmental
Advisor: Stephan Weiler

Dissertation: Three Essays on Entrepreneurship and Regional Development

Job Market Paper: The More Dynamic the Better? Effects of  Entrepreneurship on Local Growth, Distribution, and Resilience

Abstract: This paper evaluates the effects of entrepreneurship on regional economic performance in US counties spanning the 2008 recession and subsequent recovery. A well-established literature suggests that entrepreneurial activity is a major driver of local employment growth, both through direct job creation when entrepreneurial projects succeed and indirectly through information spillovers even when ventures fail. I build on existing empirical work in two ways. First, I extend the Schumpeterian theory of “creative destruction” to evaluate whether the local effects of a region’s entrepreneurial dynamism vary across phases of a business cycle. Secondly, I evaluate impacts of entrepreneurial activity on changes not just in employment but also on local median incomes and poverty rates.

Effects of entrepreneurship on local outcomes are shown to vary considerably across time. Consistent with prior studies, establishment turnover generally boosts local employment growth, but with an important cyclical component: areas with higher dynamism experienced greater job growth during expansions, but more severe employment growth slowdowns during the 2008 recession. Higher dynamism has minimal positive effects on median incomes or poverty reduction, but is weakly correlated with worse local income and poverty performance during the recession. Cumulatively, then, I argue that entrepreneurial activity has the potential to boost local economic growth, but that these gains likely accrue irregularly over time and across the income distribution, leaving an important role for policy in translating uneven benefits into equitable and sustainable growth.

Melanie Long

Melanie Long
Curriculum Vitae

Fields: Political Economy, Development  Economics
Advisor: Alex Bernasek

Dissertation: The Status of Women in U.S. Credit Markets

Job Market Paper: The Relationship between Informal Borrowing and Financial Exclusion: Locating the Invisible Unbanked at the Intersections of Race, Gender, and Class

Abstract: Beginning in the 1990s, rapid growth in alternative financial services such as pay- day lending prompted greater interest in identifying households without bank accounts and bringing them into the financial mainstream. Much of this work assumes that alternative financial services are the only short-term borrowing options available to unbanked households. Borrowing from friends and family, or informal borrowing, is one widely used alternative to high-cost finance that has been underexamined in the financial exclusion literature. Informal borrowing can incur long-run costs in terms of households’ financial security. The use of such borrowing and its costs may in turn be unequally distributed by gender, race, and class. This study uses data on individuals’ strategies for coping with an emergency expenditure to identify predictors of informal borrowing use and to investigate whether informal borrowing is related to financial ex- clusion. The direct and latent relationships between these two outcomes are estimated using a recursive bivariate probit model. Respondents who are younger, have lower levels of education, and have larger households are more likely to use informal bor- rowing. After controlling for these characteristics, Black women are twice as likely as White respondents to use informal borrowing as their sole coping strategy, and similar gaps exist for other women of color. The results also suggest that reliance on informal borrowing is jointly determined with financial exclusion. This latent relationship varies with income and by race and ethnicity. Lower relative costs of informal borrowing in communities with limited bank access may help explain this variation.

Luke Petach

Curriculum Vitae

Fields: Political Economy, Regional Economics, Development  Economics
Advisor: Anita Pena, Daniele Tavani

Dissertation:Essays on Regional Economic Development: Finance,  Growth, and Income Distribution

Job Market Paper:Local Financialization, Household Debt, and the Great Recession

Abstract: Recent literature points to the importance of household leverage as a predictor of the regional severity of the Great Recession. Yet the literature does little to explain the source of systematic regional differences in borrowing behavior. This paper suggests one source of variation: the growing influence of financial markets on local economic activity. To test the relationship between the size of the local financial sector and household borrowing, I exploit the credit-supply shock that occurred prior to the Great Recession as a plausibly exogenous source of variation in borrowing behavior. Using a difference-in-differences set-up, I find that per-capita indebtedness increased by several thousand dollars—approximately 10%—more in states with a large local financial sector as a result of the credit-supply shock. I then use data on county-level leverage ratios from Mian, Sufi, and Rao (2013), and county-level FIRE-sector employment from the County Business Patterns database, to show a similar, positive relationship between financialization and indebtedness holds at the county level. Finally, I use data on county-to-county commuting flows to construct a spatially-lagged measure of county-level financialization, which I use to demonstrate the existence of between-county spillover effects from financialization to debt. These results suggest the growing influence of financial markets and institutions on local economic activity as a fundamental cause of the Great Recession.