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Department of Economics Job Market Candidates 2010-2011

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Abaluck, Jason Agha, Leila Deryugina, Tatyana Duarte, Fernando Eden, Maya Fergusson, Leopoldo Garcia-Jimeno, Camilo Goldberg, Jonathan Keniston, Daniel Mestieri, Marti Pallais, Amanda Parsa, Sahar Pienknagura, Samuel Reguant, Mar Schaner, Simone Schrimpf, Paul Simon, Jenny Thompkins, Allison Wolitzky, Alexander

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JASON ABALUCK
abaluck@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 267-939-6226 abaluck@mit.edu http://econ-www.mit.edu/grad/abaluck MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 70 Pacific Street Cambridge, MA 02139 Apt. 544c Mobile: 267-939-6226

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Information, Decision-Making and Health DISSERTATION COMMITTEE AND REFERENCES Jonathan Gruber Michael Greenstone MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-355 50 Memorial Drive, E52-359 Cambridge, MA 02142-1347 Cambridge MA 02142-1347 617-253-0777 617- 452-4127 gruberj@mit.edu mgreenst@mit.edu Glenn Ellison MIT Department of Economics 50 Memorial Drive, E52-380A Cambridge MA 02142-1347 617- 253-8702 gellison@mit.edu

PRIOR EDUCATION

Harvard University BA in Economics June, 2006 A.B. magna cum laude, Economics United States GENDER: MALE YEAR OF BIRTH: 1983

CITIZENSHIP:

RESEARCH & TEACHING FIELDS

Primary Fields: Public Finance, Behavioral Economics Secondary Fields: Health Economics, Industrial Organization

RELEVANT POSITIONS

Research Assistant for Professor Jonathan Gruber (2007-2009) Research Assistant for Professor Richard Freeman (2003-2006) Consultant, Bates, White & Ballantine (summer 2003)

FELLOWSHIPS, NBER Pre-doctoral Fellow in Health and Aging (2009-2011) HONORS, AND AWARDS National Science Foundation Graduate Research Fellowship (2007-2009) Phi Beta Kappa (2005) John Harvard Scholarship (2003-2005)

JASON ABALUCK
OCTOBER 2010 -- PAGE 2 Deans Summer Research Award (2005) Harvard College Research Program Fellow (2004 and 2005) PROFESSIONAL ACTIVITIES Summer Institute In Behavioral Economics in Trento, Summer 2008 Center for Medicare and Medicaid Services Part D Research Forum, invited speaker, 2008 American Economic Journal: Applied Micro, Referee

PUBLICATIONS: Choice inconsistencies among the elderly: evidence from plan choice in the Medicare Part D program, American Economic Review, Forthcoming. (with Jonathan Gruber) The Medicare Part D Prescription Drug Plan represents the most significant privatization of the delivery of a public insurance benefit in recent history, with dozens of private insurers offering a wide range of products with varying prices and product features; the typical elder had a choice of roughly 40 stand-alone drug plans. This paper evaluates the choices of elders across this wide array of Part D options using a unique data set of prescription drug claims matched to information on the characteristics of choice sets. We first document that the vast majority of elders are choosing plans that are not on the efficient portfolio of plan choice in the sense that an alternative plan offers better risk protection at a lower cost. We then estimate several discrete choice models to document three dimensions along which elders are making choices that are inconsistent with optimization under full information: elders place much more weight on plan premiums than they do on expected out of pocket costs; they place almost no value on variance-reducing aspects of plans; and they value plan financial characteristics beyond any impacts on their own financial expenses or risk. These findings are robust to a variety of specifications and econometric approaches. We develop an adjusted revealed preference approach that combines data from consumer choices with ex ante restrictions on preferences, and find that in a partial equilibrium setting, restricting the choice set to the three lowest average cost options would likely have raised welfare for elders under the program. How Do Stipends Affect the Supply of PhD Scientists and Engineers? NBER/SEWP Report, 2004. (with Richard Freeman, Tanwin Chang and Hanley Chang) What Would We Eat if We Knew More: The Implications of a Large-Scale Change in Nutrition Labeling (Job Market Paper) This paper develops a framework to evaluate policies designed to lead individuals to eat healthier foods. It computes the welfare benefits of additional information about nutritional content in food using revealed preference data and evaluates quantitatively whether the estimated behavioral response is consistent with information from experts on the relationship between diet and health. In doing so, it provides estimates of the impact on nutrient consumption of the Nutrition Labeling and Education Act, which mandated nutrition labeling for all prepackaged foods in the US. Estimates derived from a structural model identified from differential changes in information across foods are consistent with reduced form estimates comparing the change in calorie consumption among label users and non-label users. They suggest that the law led to a 50-100 calorie reduction per day among label users. Taking the estimated willingness to pay for nutrient content as given implies that the labeling law led to an increase in consumer surplus of $35-$50 annually for each label user and that additional labeling regulations covering fresh foods could generate a comparable

RESEARCH PAPERS:

JASON ABALUCK
OCTOBER 2010 -- PAGE 3

benefit. A comparison with benchmark preferences derived based on medical evidence and commonly used assumptions about the value of a statistical life imply that the benefits of the law might be 3-5 times as large if consumers fully understood the relationship between nutrient content and health, and that several thousand dollars in additional annual per capita welfare gains can be realized through policies which lead to healthier dietary behavior.

RESEARCH IN PROGRESS:

The Welfare Impact of Medicare Part D (joint with Mark Shepard) Abstract: This paper evaluates whether the subsidy for prescription drug insurance for elders in the United States is too high or too low by developing and calibrating a model of optimal drug insurance. The model takes into account the potential benefits of additional insurance through increased risk protection, moral hazard (which is beneficial if prices exceed marginal costs), and through increased pharmaceutical innovation. It considers costs from the shadow price of government expenditures and socially wasteful R&D which leads to business stealing rather than welfare enhancing drugs. We also investigate how this calculation is impacted by the degree to which consumer surplus estimated from observed demand curves might misstate true consumer surplus, either because doctors act as imperfect agents for patients, or because both doctors and patients are imperfectly informed about the benefits of prescription drugs. The model starts with the Baily formula for optimal social insurance and extends it to take into account the factors noted above. This allows us to express the welfare gain as a function of reduced form elasticities. To calibrate the model, we will use estimates of these elasticities from the existing literature, as well as providing new estimates of prescription drug demand from a dataset provided by the Center for Medicare and Medicaid Services, which provides all prescription drug claims for a random sample of Medicare Part D enrollees. Consumer Choice and Choice Set Size in Health Exchanges (joint with Jonathan Gruber) Abstract: A centerpiece of the health care reform recently signed into law is the creation of health insurance exchanges in each state which will provide consumers with range of insurance options that vary along many dimensions. These include the services covered and the copays offered for insured services, as well as premiums, deductibles, and out of pocket maximums. A key question raised by this approach to delivering health insurance is whether individuals will make consistent choices across plans. This paper extends a methodology developed in Abaluck and Gruber (2010) to analyze choice inconsistencies across prescription drug insurance options to the broader setting of health insurance plan choice. To do so we use data from a larger number of small firms offering between two and four health insurance choices provided the same large health insurance company. We gather data on the choice set facing each employee in these firms, as well as information on their health care spending to model the premium and expected out of pocket consequences of choice across plans. We begin by applying several tests for choice inconsistencies: do consumers appropriately trade-off premiums and out of pocket costs, do they appropriately value plan characteristics such as deductibles and coinsurance rates given their projected medical expenditures, and do they appear to value risk protection? Next, we examine the roll that choice set size plays in consumer mistakes. We separately identify the impact of choice set size on consumer choices via the scope for error (from a larger range of plans) and via a direct impact on

JASON ABALUCK
OCTOBER 2010 -- PAGE 4

consumers ability to map plan characteristics into monetary outcomes for each plan. Finally, we extend our analysis to consider the firm side of the market and analyze the interaction between consumer mistakes of all sorts and adverse selection. Optimal Sin Taxes on Nutrients with Uninformed Consumers Abstract: This paper computes optimal sin taxes and subsidies on nutrients to correct for the disparity between the observed responsiveness to nutrient information and a benchmark responsiveness computed from medical evidence and the value of a statistical life. The model allows for heterogeneity across consumers in both health information and the value of additional life years. The model of food demand includes several thousand foods and explicitly considers the impact of different satiation assumptions on cross-price elasticities. I consider taxes on nutrients at different levels of aggregation (e.g. a single tax on calories vs. separate taxes for calories from saturated fat and fiber) and contrast these with previously proposed taxes on categories of food items such as sugary drinks.

LEILA AGHA lagha@mit.edu


MASSACHUSETTS INSTITUTE OF TECHNOLOGY
OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 217-714-1046 lagha@mit.edu http://econ-www.mit.edu/grad/lagha MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787 HOME CONTACT INFORMATION 285 Third St. Apt. 431 Cambridge, MA 02142 Mobile: 217-714-1046

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Health Economics and Technology Adoption DISSERTATION COMMITTEE AND REFERENCES Professor Michael Greenstone Professor David Autor MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-359 50 Memorial Drive, E52-371 Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 (617) 452-4127 (617) 258-7698 mgreenst@mit.edu dautor@mit.edu Professor Amy Finkelstein MIT Department of Economics 50 Memorial Drive, E52-357 Cambridge, MA 02142-1347 afink@mit.edu

PRIOR EDUCATION CITIZENSHIP RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

Massachusetts Institute of Technology, 2006 S.B. Economics, Minor in Literature United States GENDER Female YEAR OF BIRTH 1985

Primary Fields: Public Economics, Health Economics Secondary Fields: Economics of Technology and Innovation, Labor Economics Research & Communication in Economics (undergraduate, MIT Course 14.33), Teaching Assistant to Professor Amy Finkelstein Development Economics (undergraduate, MIT Course 14.74), Teaching Assistant to Professor Esther Duflo Research assistant to Professor Michael Greenstone Research assistant to Professor Esther Duflo Research assistant to Professor Abhijit Banerjee Research consultant to The World Bank, Jakarta, Indonesia 2009 2009 2008 2007 2007 2007

RELEVANT POSITIONS

LEILA AGHA OCTOBER 2010 PAGE 2


FELLOWSHIPS, National Science Foundation Graduate Research Fellowship HONORS, AND MIT Ida M. Green Graduate Fellowship AWARDS MIT Economics Department Castle Krob Graduate Fellowship Phi Beta Kappa Association of MIT Alumnae Senior Academic Award Galbraith Scholar, Harvard Kennedy School of Government Junior Fellow, American Academy of Political and Social Science 2007-2011 2006-2007 2006-2008 2006 2006 2006 2006

PROFESSIONAL Referee: American Economic Journal: Applied Economics, Journal of Labor ACTIVITIES Economics, Review of Economics and Statistics RESEARCH PAPERS: The Effects of Health Information Technology on Costs and Quality of Medical Care This paper analyzes the impact of electronic medical records and clinical decision support on the quality and intensity of care delivered to Medicare inpatients. Building an organizational model, I show how the adoption of health information technology (HIT) may influence several key inputs to the health production function: increasing the intensity of treatment, reducing redundant testing, and changing the reliance on medical specialists. Through these channels, as well as by improving the adaptation of care to patients' idiosyncratic needs, HIT may improve patient health and may either increase or decrease medical expenditures. Using rich panel data on Medicare claims, I estimate the effects of HIT by exploiting variation in hospitals' HIT adoption status over time. HIT is associated with an initial 1.4% increase in billed charges immediately following adoption. The largest and most persistent source of expenditure growth is from spending on diagnostic tests and imaging, and there is no sign of a reduction in redundant testing. HIT adoption is associated with economically small and statistically indistinguishable from zero changes in patient mortality, medical complication rates, and readmission rates. The 95% confidence interval bounds any decline in the mortality rate to be smaller in magnitude than 4 fewer deaths per 1000 patients, from a mean of 100 deaths per 1000 patients. Length of stay and the number of physicians consulted do not change significantly after HIT adoption, nor do measures of the quality of outpatient care. These findings are robust to the addition of rich controls for pre-trends. Overall, the results suggest that HIT is not associated with improvements in either the efficiency or quality of hospital care for Medicare patients during the study period. These results estimate the impact of HIT for up to six years after the initial adoption and do not capture benefits that may emerge over a longer time horizon or from alternative HIT systems. Technology Diffusion in Medicare: Financial Incentives and Physician Learning New medical technologies are thought to be a primary driver of rising medical costs as well as improved health outcomes and longevity. Understanding which factors predict and encourage efficient adoption of new diagnostic and therapeutic technologies could inform policies that facilitate appropriate use of new technologies while minimizing costs. In this paper, I exploit regional variation in Medicare reimbursement policy for nascent technologies to analyze how financial incentives affect the speed and persistence of technology diffusion. I also analyze to what extent physicians learn about the efficacy and applicability of a new technology from peers at other hospitals. This research will test whether early-adopting regions undertake costly experimentation on new medical technologies, where the returns are uncertain and low on average, thus subsidizing the learning process for late-adopting regions.

RESEARCH IN PROGRESS:

TATYANA DERYUGINA
tatyanad@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Dr., E52-243D Cambridge, MA 02142-1347 925-349-8999 tatyanad@mit.edu http://econ-www.mit.edu/grad/tatyanad MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL
STUDIES

HOME CONTACT INFORMATION 32 Putnam Ave., Apt.1 Cambridge, MA 02139 Mobile: 925-349-8999

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays in Environmental Economics DISSERTATION COMMITTEE AND REFERENCES Professor Amy Finkelstein MIT Department of Economics 50 Memorial Drive, E52-357 Cambridge, MA 02142-1347 617-253-4149 afink@mit.edu Professor Gilbert Metcalf Tufts Department of Economics 8 Upper Campus Rd., 220C Braker Hall Medford, MA 02155-6722 617-627-3685 gilbert.metcalf@tufts.edu Professor Michael Greenstone MIT Department of Economics 50 Memorial Drive, E52-359 Cambridge, MA 02142-1347 617-452-4127 mgreenst@mit.edu

PRIOR EDUCATION

B.A., magna cum laude B.S., summa cum laude

Applied Mathematics Environmental Economics and Policy GENDER F

UC Berkeley UC Berkeley

2006 2006

CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

United States

YEAR OF BIRTH

1984

Fluent: English, Russian, Ukrainian. Working knowledge: French. Primary Fields: Environmental Economics, Public Finance Secondary Field: Behavioral Economics

Research and Communication in Economics (undergraduate, MIT course 14.33), Teaching Assistant to Professor Michael Greenstone Graduate Student Teaching Certificate Program Research Assistant to Professor Amy Finkelstein Research Assistant to Professor Stefano DellaVigna

Spring 2010 Spring 2009 2007-2008 2005-2006

RELEVANT POSITIONS

TATYANA DERYUGINA
OCTOBER 2010 -- PAGE 2

FELLOWSHIPS, MIT Energy Initiative Fellow, 2008 - 2009 HONORS, AND MIT Presidential Fellow, 2006 - present National Science Foundation Fellowship, 2006-2009 AWARDS Phi Betta Kappa, UC Berkeley, 2006 Best Undergraduate Paper Finalist, IAEA, 2006 Departmental Citation (UC Berkeley Environmental Economics and Policy), 2006 PROFESSIONAL Referee: ACTIVITIES Journal of Public Finance American Economic Journal: Applied Economics

Participant: Price Theory Scholar, University of Chicago, Fall 2009 Price Theory Summer Institute, University of Chicago, 2009 Summer Institute of Behavioral Economics, University of Trento, 2008 RESEARCH PAPERS The Dynamic Effects of Hurricanes in the US: The Role of Non-Disaster Transfer Payments (Job Market Paper) We know little about the dynamic economic impacts of natural disasters. I examine the effect of hurricanes on US counties' economies 0-10 years after landfall. Overall, I find no substantial changes in county population or earnings. The employment rate is 0.17 percentage points lower ten years after the hurricane. The largest empirical effect of a hurricane is observed in large increases in government transfer payments to individuals, such as unemployment insurance. The estimated magnitude of the extra transfer payments is large. While per capita disaster aid averages $356 per hurricane in current dollars, I estimate that in the eleven years following a hurricane an affected county receives additional non-disaster government transfers of $70 per capita per year. Private insurance-related transfers over the same time period average only $3.60 per capita per year. These results suggest that a nontrivial portion of the negative impact of hurricanes is absorbed by existing social safety net programs. The fiscal costs of natural disasters are thus much larger than the cost of disaster aid alone. Because of the deadweight loss of taxation and moral hazard concerns, the benefits of policies that reduce disaster vulnerability, such as climate change mitigation and removal of insurance subsidies, are larger than previously thought. Finally, the substantial increase in non-disaster transfers suggests that the relative resilience of the United States to natural disasters may be in part due to various social safety nets. How do people update? The effects of local weather fluctuations on beliefs about global warming (revised and resubmitted to Journal of Environmental Economics and Management) How people update their beliefs is an important question for economic theory and policy. Various systematic violations of Bayes' rule have been found by economists and psychologists. Climate change is a one-time uncertain event; in such situations, the belief updating process may not be fully rational. Using unique survey data on individuals' beliefs about global warming, I test how much weight individuals give to local weather fluctuations. I find some short-run (1-2 days) influences of weather that are inconsistent with Bayesian updating: for example, while the standard deviation of precipitation on the day of the survey affects beliefs, the average deviation over the week before the survey does not. Over a longer time period (up to 12 months), the pattern of belief formation is consistent with Bayesian updating when access to information about the global weather is limited: longer periods of abnormal weather and more abnormal weather produce larger changes in beliefs.

TATYANA DERYUGINA
OCTOBER 2010 -- PAGE 3

RESEARCH IN PROGRESS

The effect of federal aid on post-disaster economics Global warming threatens to increase the frequency of extreme weather events. However, very little is known about the net value of current disaster policies. In order to know how cost-effective disaster aid is, it is important to know its benefits. There has been substantial research on the political determinants of federal disaster aid in the US; the amount of aid given in a US disaster declaration has been found to be influenced by the presence of congressmen on FEMA oversight committees, the political party of the governor versus that of the US President, and whether the state is a swing state. However, the causal effect of aid has not been studied. Using political variables previously identified in the literature as instruments for the amount of federal aid given to a US count, I estimate its effect on post-hurricane construction activity, average earnings, employment rate, and non-disaster transfer payments.

FERNANDO M. DUARTE duarte@mit.edu MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 857-928-7344 duarte@mit.edu http://econ-www.mit.edu/grad/duarte MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES HOME CONTACT INFORMATION 55 Sacramento St. Apt. 4 Cambridge, MA 02138 Mobile: 857-928-7344

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Macroeconomic Risks and the Stock Market DISSERTATION COMMITTEE AND REFERENCES Professor Ricardo Caballero MIT Department of Economics 50 Memorial Drive, E52-373A Cambridge, MA 02142-1347 617-253-8887 caball@mit.edu Professor Adrien Verdelhan MIT Sloan School of Management 50 Memorial Drive, E62-621 Cambridge, MA 02142-1347 617-253-5123 adrienv@mit.edu Professor Leonid Kogan MIT Sloan School of Management 100 Main Street, E62-636 Cambridge, MA 02142-1347 617-253-2289 lkogan@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS

Massachusetts Institute of Technology (MIT) B.S. in Mathematics, Minor in Economics Argentina English, Spanish Primary Fields: Finance, Macroeconomics Secondary Fields: International Economics GENDER Male YEAR OF BIRTH

2005

1981

FERNANDO M. DUARTE
OCTOBER 2010 -- PAGE 2

TEACHING EXPERIENCE

International Economics (undergraduate, MIT course 14.54) Lecturer, Spring 2008. Advanced Financial Economics (graduate, MIT course 15.440J) Teaching assistant to Prof. Leonid Kogan, Spring 2009 & 2010, Fall 2010. Financial Management (MBA, MIT course 15.414) Teaching assistant to Prof. Hamid Mehran, Summer 2006. Principles of Macroeconomics (undergraduate, MIT course 14.02) Head teaching assistant to Prof. Paul Willen in Fall 2008, to Prof. Francesco Giavazzi in Spring 2009, to Prof. Veronica Guerrieri in Fall 2009. Principles of Macroeconomics (undergraduate, MIT course 14.02) Teaching assistant to Prof. Francesco Giavazzi, Spring 2008. Differential Equations with Theory (undergraduate, MIT course 18.034) Teaching assistant to Prof. Mihalis Dafermos, Spring 2003.

RELEVANT POSITIONS

Research assistant to Prof. Ricardo Caballero Research assistant to Prof. Xavier Gabaix Intern, Ministry of Economics, Mendoza, Argentina MIT Hennessy Scholar MIT Graduate Fellowship Second Prize, MIT Undergraduate Journal of Economics 3rd place, MERCOSUR Mathematical Olympiad Top 1% in Argentinean Mathematical Olympiad

2004-2010 2003-2004, 2009 2002 2004-2007 2006-2007 2005 1998 1995,1997

FELLOWSHIPS, HONORS, AND AWARDS

RESEARCH PAPERS

Inflation Risk and the Cross-Section of Stock Returns (Job Market Paper) I establish that inflation risk is priced in the cross-section of stock returns: stocks that have low returns when inflation is increasing command a risk premium. The inflation premium cannot be explained by known asset pricing models like Fama-French or the Cochrane-Piazzesi factor, but I argue it instead arises because high inflation predicts low real consumption growth. I propose an equilibrium model with realistic joint dynamics for consumption and inflation that generates a price of inflation risk consistent with what we observe in bond yields and stock returns. Investment and Stock Market Volatility (with Leonid Kogan and Dimitry Livdan) We study the relation between returns on the aggregate stock market and aggregate real investment. While it is well known that, controlling for productivity, the aggregate investment rate is negatively related to subsequent excess stock market returns, we find that it is positively related to future stock market volatility. Thus, conditionally on past aggregate investment, the meanvariance tradeoff in aggregate stock returns is negative. We interpret this puzzling pattern within a general equilibrium production economy. In our

FERNANDO M. DUARTE
OCTOBER 2010 -- PAGE 3

model, investment is determined endogenously in response to two types of shocks: shocks to productivity, and shocks to aggregate risk aversion that affect the cost of capital. Investment is positively related to productivity and negatively related to the cost of capital. Controlling for productivity, highinvestment periods tend to correspond to low cost of capital, giving rise to a negative relation between aggregate investment and expected excess stock market returns. When cost of capital is low, and thus close to the growth rates of cash flows, stock prices are relatively sensitive to changes in discount rates and stock returns become relatively volatile, giving rise to a positive relation between investment and future stock market volatility. Consequently, our results indicate that the time-varying price of aggregate risk is an important determinant of aggregate investment dynamics. RESEARCH IN PROGRESS A Shifting Forward-Premium Puzzle (with Ricardo Caballero) One of the most stubborn findings in international finance is the so called forward-premium puzzle: contrary to the implication of the uncovered interest parity condition, high yielding currencies tend to appreciate rather than depreciate. Consequently, investing in high yielding currencies while borrowing in low yielding currencies has been a source of significant excess returns in the past. However, it is also well known that this trading strategy has a large exposure to tail-risk, much of which is the endogenous outcome of speculators' coordinated unwinding of large levered carry trade positions. Thus, the frontline has now shifted, as professional carry traders spend their research time designing strategies that anticipate turning points. While specifics differ, most of the strategies are indexed to VIX-like variables: Carries are aggressive when aggregate implied volatility is low, and covered when high, making the carry trade the ultimate risk-on risk-off strategy. In this paper, we provide an equilibrium model to study the endogenously determined joint dynamics of the exchange rate, the carry trade and aggregate volatility. The exchange rate is a non-linear function of volatility, reacting violently in the critical region where traders unwind their positions en-masse. We show that as a result of the evolution of the carry-trade strategy, the excess return has shifted from the naive-carry trade to a more sophisticated form involving conditioning to volatility.

MAYA EDEN
mayaeden@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-368 Cambridge, MA 02142-1347 857-246-9722 mayaeden@mit.edu http://econ-www.mit.edu/grad/mayaeden MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 169 Saint. Botolph st. Apt. 10 Boston, MA 02115 Primary: 857-246-9722 Mobile: 857-928-1000

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Financial Distortions and the Distribution of Global Volatility DISSERTATION COMMITTEE AND REFERENCES Professor Ricardo J. Caballero Professor Guido Lorenzoni MIT Department of Economics MIT Department of Economics 50 Memorial Drive 50 Memorial Drive Building E52, Room 373A Building E52, Room 251C Cambridge, MA 02142-1347 Cambridge MA 02142-1347 617-253-0489 617-253-4836 caball@mit.edu glorenzo@mit.edu Professor Arnaud Costinot MIT Department of Economics 50 Memorial Drive Building E52, Room 243B Cambridge MA 02142-1347 617-324-1712 costinot@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

2003-2006

B.A. in Mathematics and Economics, cum laude, Hebrew University

USA, Israel

GENDER: Female

English (native), Hebrew (native) Primary Fields: International Finance, Macroeconomics Secondary Fields: International Trade, Theory

International Economics II (graduate, MIT course 14.582) Teaching Assistant to Professors Ricardo Caballero and Guido Lorenzoni Intermediate Applied Macroeconomics (undergraduate, MIT course

Fall 2008

Spring 2009,

MAYA EDEN OCTOBER 2010 -- PAGE 2


14.05) Teaching Assistant to Professor George-Marios Angeletos International Economics II (graduate, MIT course 14.582) Teaching Assistant to Professors Roberto Rigobon and Guido Lorenzoni The Economics of Energy Markets (undergraduate and graduate, MIT course 14.44/444) Teaching Assistant to Professor Gilbert Metcalf FELLOWSHIPS, World Economic Laboratory Award, 2009 HONORS, AND MIT Presidential Fellowship, 2006-2008 Deans Excellence Award, Hebrew University, 2005-2006 AWARDS PROFESSIONAL Referee for Games and Economic Behavior ACTIVITIES Student coordinator for the Rudi Dornbusch International Breakfast (student seminar) at MIT, 2008-present CONFERENCE PRESENTATIONS Bank of Canada Conference on Financial Globalization and Financial Stability, October 2010 (expected) NBER Summer Institute, International Finance and Macroeconomics workshop, July 2010 Tournaments, Contests and Relative Performance Evaluation; North Carolina State University, March 2008 SEMINAR PRESENTATIONS University of Houston Macroeconomics seminar, November 2010 (expected) IMF, RES External Seminar organized by the IMF Research Department, 2010 Hebrew University Theory seminar, 2009 Haifa Institute of Technology (Technion) Game Theory seminar, 2007 RESEARCH PAPERS: Financial Distortions and the Distribution of Global Volatility (Job Market Paper) A generic feature of financial frictions, whatever their origins may be, is to distort the allocation of funds to projects, causing some less productive projects to be funded while more productive projects are not. In this paper I formalize this idea by introducing a log supermodularity condition which requires that, at the margin, the difference in productivity between funded and unfunded projects is smaller in more distorted economies. Using this condition, I then revisit the relationship between financial distortions and macroeconomic volatility. My first set of results establish that financial integration shifts the margin of adjustment to global liquidity shocks disproportionately to financially distorted regions, thereby providing a new and simple explanation for the divergent trends in the volatility of emerging and developed economies up to the recent crisis. My second set of results show that a global environment in which liquidity is cheap is conducive to a deterioration of the financial system in the developed world. While cheap liquidity increases and stabilizes output in that region, it amplifies large adverse shocks. Spring 2010

Fall 2009, Fall 2010

Spring 2010

MAYA EDEN OCTOBER 2010 -- PAGE 3


The Inefficiency of Financial Intermediation in General Equilibrium In the presence of liquidity constraints, there are rents from supplying liquidity to constrained entrepreneurs. In partial equilibrium, when the price of inputs is fixed, a financial system facilitates the efficient allocation of resources by relaxing liquidity constraints. However, in general equilibrium, the presence of a financial sector is associated with two costs: first, intermediation activities absorb productive resources. Second, financial intermediation bids up the price of inputs in terms of liquidity, increasing the economy's dependence on the financial sector and making it increasingly vulnerable to financial crises. Consequently, the presence of a financial sector may reduce equilibrium welfare. I show that an optimal policy is to tilt the tradeoff between production and liquidity hoarding in favor of liquidity hoarding. The optimal policy serves both to relax liquidity constraints and to crowd out the financial sector. Tournaments as Optimal Contracts There is a rich literature on tournaments demonstrating that various forms of optimal tournaments can help rationalize observed labor contracts. However, there are important negative results stating that tournaments are practically never optimal contracts. In this paper I partially fill this gap by adding an assumption that the principal is liquidity constrained, and deriving conditions under which tournaments are optimal contracts in the two-agent case. The key result is that the optimal contract takes a tournament form if the principals liquidity constraint is sufficiently binding. I derive this result under the assumption that the aggregate shock to output is large, so that only relative output is informative of effort. Aside from providing a theoretical explanation for the existence of tournaments, the analysis suggests circumstances in which tournaments are more likely to be observed. These are situations in which the aggregate shock to output is large and the principal is credit constrained. RESEARCH IN PROGRESS: Complexity and the Demand for Safe Assets (joint with Nir Avni, Department of Mathematics, Harvard University) The subprime mortgage crisis was amplified by the complexity of securitized products. When losses from loans began to realize, many assets were difficult to price because of their complexity, causing them to be essentially untradeable. This is puzzling given that the purpose of securitization is to create safe assets. In this paper, we propose that the collapse in the value of securitized products can be explained by an inherent discontinuity in the level of complexity of financial assets. We employ tools from Statistical Mechanics to argue that the complexity induced by the process of securitization exhibits a phase transition, in which complexity increases discontinuously at some critical level of securitization. In our model, if the demand for safe assets is sufficiently high, the system is drawn to an unstable equilibrium in which agents do not know whether the level of complexity is above or below the critical threshold. The state of complexity can be inferred if the economy is hit by a sectoral shock (such as a shock to housing prices) that calls for the reevaluation of assets. If complexity is revealed to be above the critical level, securitized products become illiquid, resulting in a widespread financial crisis in which banks are both unwilling to lend to each other and unwilling to issue new loans to the productive sector. A Balls-and-Bins Model of the City Size Wage Premium (joint with Matthew J. Notowidigdo, Chicago Booth) The correlation between city size and wages is typically interpreted as arising from a combination of worker sorting, firm selection, and city-wide agglomeration economies. In this paper, we propose an alternative explanation, which is that part of

MAYA EDEN OCTOBER 2010 -- PAGE 4


this correlation is a mechanical consequence of a highly skewed income distribution. We are motivated by the following statistical principle: if families (balls) are randomly assigned to cities (bins) of varying size, and the income distribution of families is highly skewed, then with a high probability we will observe a positive correlation between income per capita and city size. Empirically, we interpret families broadly as groups of individuals with similar incomes that tend to collocate, such as employees of the same industry or members of the same immigrant group. The correlation implied by the balls-and-bins model depends on the size of these groups. For example, the balls-and-bins model with groups of size 10,000 generates a correlation between city size and wages that can fully account for the lower bound of the existing estimates in the literature. In ongoing work, we are empirically estimating group sizes based on observable characteristics in order to estimate the practical relevance of this mechanism. The Week The seven day labor-leisure cycle has set the rhythm of economic activity for over a thousand years. However, the division of time into chunks of labor and chunks of leisure is at odds with the standard dynamic model of labor supply that implies that the optimal consumption of leisure is smooth. I add three ingredients to the standard continuous time model: first, any point in time must be spent either on labor or on leisure (and cannot be divided between these two activities). Second, the utility derived from leisure takes the form of increasing a stock of pleasant memories, which depreciates during time spent on work. Third, there is a cost associated with switching between labor and leisure. In this model, a week that divides time into a cycle of labor and leisure emerges as an optimal plan. All three modifications are necessary for this result. If either labor or leisure requires widespread coordination, the model has multiple equilibria. It is therefore theoretically possible that the seven day week is a consequence of a coordination failure. In calibrating the optimal laborleisure cycle, a key parameter is the switching cost between labor and leisure. This parameter depends both on the physical switching costs between the workplace and the leisure location, and on the psychological switching costs between work and leisure activities.

LEOPOLDO FERGUSSON
leopoldo@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 617-372-4672 leopoldo@mit.edu http://econ-www.mit.edu/grad/leopoldo MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 HOME CONTACT INFORMATION 38 Lee Street Apt 1R Cambridge, MA 02139-1810 Mobile: 617-372-4672

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

DOCTORAL
STUDIES

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Political Economy DISSERTATION COMMITTEE AND REFERENCES Professor Daron Acemoglu MIT Department of Economics 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 617-253-1927 daron@mit.edu Professor James Snyder Harvard Department of Government 1737 Cambridge Street Knafel Building RM 413 Cambridge, MA 02138 617-496-1089 jsnyder@gov.harvard.edu Professor Abhijit Banerjee MIT Department of Economics 50 Memorial Drive, E52-252D Cambridge, MA 02142-1347 617-253-8855 banerjee@mit.edu Professor James A. Robinson Harvard Department of Government 1737 Cambridge Street Knafel Building RM 309 Cambridge, MA 02138 617-496-2839 jrobinson@gov.harvard.edu

PRIOR EDUCATION

M.A., honors B.A., magna cum laude

Economics Economics

Universidad de los Andes, Bogot, Colombia Universidad de los Andes, Bogot, Colombia

2003 2002

CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS

Colombia English, Spanish Primary Fields: Political Economy, Development Economics Secondary Fields: Economic History

LEOPOLDO FERGUSSON
OCTOBER, 2010-- PAGE 2

TEACHING EXPERIENCE

TEACHING ASSISTANT AT MIT Microeconomics (undergraduate, MIT course 14.01), Professor Jeffrey Harris Game Theory & Political Theory (graduate, MIT course 17.810/17.811), Professor Jim Snyder Applied Economics for Managers (Sloan Fellows Program, MIT course 15.024), Professor Thomas Stoker Microeconomic Theory and Public Policy (undergraduate, MIT course 14.03), Professor Panle Jia and Professor Stephen Ryan LECTURER AT UNIVERSIDAD DE LOS ANDES Latin American Development in the Long Run, with Pablo Querubin and James Robinson, International Summer School Political Economy of Economic Policy, with Pablo Querubn Macroeconomics I Macroeconomics II Macroeconomics III , with Gustavo Surez in Summer 2007 Summer 2010 2003-2005 2004-2005 Summer 2006 2004-2005 Summer 2004, 2005 & 2007 Summer 2004 Spring 2010 Fall 2009 Summer 2008 Spring 2008 Spring 2009

Macroeconomics for Non-economists (With Andrs Escobar) TEACHING ASSISTANT AT UNIVERSIDAD DE LOS ANDES Wealth and Poverty, Macroeconomics III, Mathematical Economics, Monetary Theory and Policy, Macroeconomics for Non-economists

2001-2003

RELEVANT POSITIONS

Professor-Instructor, Department of Economics and Center for Studies in Economic Development (CEDE), Universidad de los Andes Junior Researcher and Analyst, Department of Economic Research, Central Bank of Colombia

2002-2005

2001-2002

FELLOWSHIPS, George and Obie Schultz Fund Grant, Words versus Bullets: HONORS, AND Media and Democracy with Coercion AWARDS Lauchlin Currie distinction, Central Bank of Colombia Scholarship on doctoral studies Juan Luis Londoo Prize, best thesis, Master of Economics, Universidad de los Andes Ramn de Zubira Scholarship, best cumulative grade point average, Department of Economics, Universidad de los Andes Excelencia Acadmica Scholarship, best grade point average, Department of Economics, Universidad de los Andes

2010

2005

2003

2000 and 2001

1999

LEOPOLDO FERGUSSON
OCTOBER, 2010-- PAGE 3

PROFESSIONAL CONFERENCE PRESENTATIONS ACTIVITIES Midwestern Political Science Association Annual Meetings 2010 Latin American and Caribbean Economic Association: Annual Meetings, 2003, 2004, 2007, and 2009; Political Economy Group Meeting (discussant), 2004 and 2010 Economic Commission for Latin American and the Caribbean, XVII Regional Seminar on Fiscal Policy, 2005 NBER Inter-American Seminar on Economics, 2003 OTHER Invited Lecturer, Department of Economics, Universidad de los Andes, Summer 2004, 2005, 2006, 2007 and 2010; Invited Scholar, Department of Economics, Universidad del Rosario, March 20-28, 2010 Technical Committee, Ensayos Sobre Poltica Econmica, Journal of the Central Bank of Colombia Revision of the Spanish translations of: Robert E. Lucas, Lectures on Economic Growth; Rudiger Dornbusch, Keys to Prosperity: Free Markets, Sound Money, and a Bit of Luck; and Paul Krugman, The Great Unraveling. Published in Bogot, Colombia, Grupo Editorial Norma, 2004 and 2005. With Juan Carlos Echeverry and Pablo Querubn Organizer of the Political Economics Group Student Conference, Cambridge, Massachusetts, NBER, 2007 and 2008. With Marcello Miccoli and Pablo Querubin Thesis Advisor, The Impact of State Presence on FARC Attacks by Mara A. Palacio, B.A. in Economics, Universidad de los Andes, Special Mention, Ulpiano Ayala Prize, best undergraduate thesis in 2004

PUBLICATIONS BOOKS Poltica Fiscal: Un Enfoque de Tributacin Optima, (Fiscal Policy: An Optimal Taxation Approach) with Gustavo Surez, Bogot, Ediciones Uniandes, March 2010. CHAPTERS IN BOOKS Quin Manda Sobre las Cuentas Pblicas? (Who Decides on Public Expenditures?) by Juan Carlos Echeverry with Jorge Alexander Bonilla, Andrs Clavijo, Andrs Moya, Vernica Navas and Pablo Querubn, Ediciones Uniandes, Bogot, 2009. PAPERS Institutions for Financial Development: What are They and Where do They Come From? Journal of Economic Surveys, 2006, 20 (1): 27-70. Impuestos, Crecimiento Econmico y Bienestar en Colombia (1970-1999) (Taxation, Welfare and Growth in Colombia (1970-1999)), Desarrollo y Sociedad, 2004, 52: 145-204.

LEOPOLDO FERGUSSON
OCTOBER, 2010-- PAGE 4 Dollar Debt in Colombian Firms: Are Sinners Punished During Devaluations?, with Juan Carlos Echeverry, Roberto Steiner and Camila Aguilar, Emerging Markets Review, 2003, 4(4): 417-449. Media Markets, Special Interests, and Voters (Job Market Paper) This paper examines the role of mass media in countering special interest group influence by studying county-level support for candidates to the US Senate from 1980 to 2002 as a function of media exposure and campaign finance profiles. I use the concentration of campaign contributions from Political Action Committees to proxy capture of politicians by special interests, and compare the reaction of incumbent vote margins to increases in concentration in two different types of media markets in-state media markets and out-of-state media markets. Unlike in-state media markets, out-ofstate markets focus on neighboring states politics and elections. Thus, if citizens punish political capture, increases in concentration of special interest contributions to a particular candidate should reduce his vote share in in-state counties relative to the out-of-state counties, where the candidate receives less coverage. I find that a one standard deviation increase in concentration of special interest contributions to incumbents reduces their vote share in about 0.5 to 1.5 percentage points in in-state counties relative to the out-of-state counties. Results are similar in specifications that rely solely on variation in concentration across time within the same county, and when the sample is limited to in-state counties that are contiguous to out-of-state counties and have similar demographic structures. A placebo test where in-state counties bordering out-of-state ones are compared to other in-state counties shows no effects, confirming the identification hypothesis that the results are not driven by geographic characteristics or distance from the media center of the state. The Political Economy of Rural Property Rights and the Persistence of the Dual Economy Theory and evidence suggest that improving agricultural productivity in developing countries is essential to reduce the income gap between the rich and poor, and that property rights in land are a major determinant of such productivity. If property rights in land are so beneficial, why are they not adopted more widely? I propose a theory based on the idea that limited property rights over peasants' plots are optimal from the point of view of elite landowners, who depend on peasants for labour, because they achieve two goals. First, like other distortions such as taxation, they reduce peasants' income from their own plots. This generates a cheap labour force for landowners. Second, and unlike taxation, they force peasants to remain in the rural sector to protect their property, even if job opportunities appear in the urban sector. The theory implies that with low urban wages and no effective threat of peasant migration, good property rights prevail. In contrast, with an effective threat of migration, minimal taxation and bad property rights to avoid migration of the labour force arises as long as peasants own little land. If peasants own sufficient land, however, property rights for peasants are optimal since the elite again focuses on taxation. The theory implies that, at low levels of modernization, bad property rights arise only if landowners have limited ability to tax peasants. However, bad rural property rights may easily persist at high levels of modernization. The model also predicts a non-monotonic relationship between the quality of rural property rights and land in the hands of peasants. It thus provides a specific mechanism for the endogenous persistence of bad institutions highlighted in important development and history literatures, and also suggests a general reason why small land reforms may deliver poor results.

RESEARCH PAPERS

LEOPOLDO FERGUSSON
OCTOBER, 2010-- PAGE 5

He Who Counts Elects: Determinants of Fraud in the 1922 Colombian Presidential Election, with Isaas N. Chaves and James A. Robinson, NBER Working Paper No. 15127, July 2009 (revise and resubmit, American Political Science Review) In this paper, we construct measures of the extent of ballot stuffing (fraudulent votes) and electoral coercion at the municipal level, using data from Colombia's 1922 Presidential elections. Our main findings are that the presence of the state reduced the extent of ballot stuffing, but that the presence of the clergy, which was closely imbricated in partisan politics, increased coercion. We also show that landed elites to some extent substituted for the absence of the state and managed to reduce the extent of fraud where they were strong. At the same time, in places which were completely out of the sphere of the state and thus partisan politics, both ballot stuffing and coercion were relatively low. Thus the relationship between state presence and fraud is not monotonic. Population and Social Conflict, with Daron Acemoglu and Simon Johnson This paper examines the effect of population growth on violent social conflict. Exploiting the international epidemiological transition that began in the 1940s, we construct an instrument for changes in population (Acemoglu and Johnson, 2007) and find that countries with higher (exogenous) increases in population experimented larger increases in social conflict. A simple falsification test indicates that changes in conflict from 1900 to 1940 are uncorrelated with our instrument, lending support to our identification strategy. Our results are robust to using a variety of standard measures for conflict and are not driven by differential trends between countries with different baseline characteristics often emphasized in the literature on civil wars. Using a simple theoretical framework, we interpret these findings as an indication that a larger population, without a corresponding increase in resources and technology, generates greater competition for resources and makes conflict and civil wars more likely in environments where the institutions cannot handle the higher level of disputes. The Rich-poor Divide, Within-groups Inequality and Armed Conflict, with Juan Fernando Vargas Economic inequality is often considered a prime cause of violent conflict. However, empirical research and theoretical arguments suggest that there is no reason to expect an unambiguous impact of wealth inequality on conflict. In this paper we use a simple theoretical framework to examine the way in which two different dimensions of inequality influence violent conflict. The first dimension is the "rich-poor divide," or the overall level of inequality between a large majority of relatively poor and homogenous individuals, and a smaller elite of wealthier individuals. The second dimension of inequality is the wealth dispersion within the rich individuals in society. In terms of the poor-rich divide, we identify two possible regimes with opposing predictions in terms of the inequality and conflict relation: a "dispossession regime," where the relationship is negative, and a "grievance regime," where instead inequality increases conflict. Using cadastral records from Colombia, we provide prima facie evidence in favor of the "grievance regime." However, wealth inequality within the relatively rich is correlated with less conflict. We interpret this last result as an indication that state capacity is low and the extent of property rights protection thus depends upon the capacity of groups in society to either organize effectively

RESEARCH IN PROGRESS

LEOPOLDO FERGUSSON
OCTOBER, 2010-- PAGE 6

their own protection or lobby the state for protection. In this context, this negative correlation is consistent with an Olsonian view of collective action: greater concentration of wealth improves collective effort by the rich, and deters the poor from initiating conflict. Words versus Bullets: Media and Democracy with Coercion, with Juan Fernando Vargas A growing strand of the political economy literature has stressed the crucial role of the media in facilitating the flow of candidates information to voters. In general, this research has shown that well-informed voters make better choices. This paper examines whether this result breaks down in weakly institutionalized environments. We construct a unique individual-level high-frequency dataset on the press coverage of over 500 politicians across 14 years, as well as time-varying data on press penetration at the municipal level, to examine the limits of media exposure of corrupt politicians in disciplining voters in Colombia. In particular, we study a nation-wide scandal involving a large number of incumbent legislators proved to have colluded with illegal paramilitaries. To identify the causal effect of media exposure, we rely on differences in the timing of press coverage and compare parapoliticians exposed shortly before and after the election. We conduct additional robustness checks to verify that results are not driven by potential endogeneity in the timing of media exposure.

CAMILO GARCIA-JIMENO
cgarcia@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 857-998-2640 cgarcia@mit.edu http://econ-www.mit.edu/grad/cgarcia MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 19 Buckingham Street, Apt. 2 Somerville, MA, 02143 Mobile: 857-998-2640

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays in Political Economy DISSERTATION COMMITTEE AND REFERENCES Professor Daron Acemoglu MIT Department of Economics 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 617-253-4669 daron@mit.edu Professor James M. Snyder Jr. Harvard University, Government Department 1737 Cambridge Street, K413 Cambridge, MA 02138 617-496-1089 jsnyder@gov.harvard.edu Professor James A. Robinson Harvard University, Government Department 1737 Cambridge Street, K309 Cambridge, MA 02138 617-496-2839 jrobinson@gov.harvard.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

M.A., Honors B.A., Honors B.A., Magna Cum Laude Colombia Spanish (native), English (fluent)

Economics Economics History

Universidad de los Andes Universidad de los Andes Universidad de los Andes

2005 2004 2006

GENDER: Male

YEAR OF BIRTH 1981

Primary Fields: Political Economy Secondary Fields: Economic History, Theory, Econometrics Macroeconomics (Undergraduate, MIT course 14.02), Teaching Assistant to Professor James Feyrer The Emergence of Modern Economic Growth (Graduate, Harvard course ECON2328), Teaching Assistant to Professor James A. Robinson Intermediate Macroeconomics III (Undergraduate, U. de los Andes), Instructor Fall 2010 Fall 2009 Summer 2009 Summer 2008

CAMILO GARCIA-JIMENO
OCTOBER 2010 -- PAGE 2 Collective Choice 1 (Graduate, MIT course 14.296), Teaching Assistant to Professor James Snyder RELEVANT POSITIONS FELLOWSHIPS, HONORS, AND AWARDS Research Assistant to Professor James A. Robinson, Harvard University Research Assistant, FEDESARROLLO Research Assistant, Department of Economics, Universidad de los Andes Lauchlin Currie Fellow, Banco de la Republica de Colombia George and Obie Schultz Fund Grant, MIT Best Undergraduate Thesis at the School of Social Sciences, Universidad de los Andes Lauded M.A. Thesis, Department of Economics, Universidad de los Andes Academic Excellence Scholarship, Universidad de los Andes Fall 2008 2005-2006 2004 2002-2004 2006-2009 2009-2010 2006 2005 Spring, Fall 2003

PROFESSIONAL ACTIVITIES PUBLICATIONS:

Referee for British Journal of Political Science, Journal of Iberian and Latin American History and Ensayos de Poltica Econmica. The Myth of the Frontier. 2010. (joint with James A. Robinson). In Dora Costa and Naomi Lamoreaux (eds.). Understanding Long-Run Economic Growth: Essays in Honor of Kenneth L. Sokoloff. University of Chicago Press. One of the most salient explanations for the distinctive path of economic and political development of the United States is captured by the "Frontier (or Turner) thesis". Turner argued that it was the presence of the open frontier which explained why the United States became democratic and, at least implicitly, prosperous. In this paper we provide a simple test of this idea. We begin with the contradictory observation that almost every Latin American country had a frontier in the 19th century as well. We show that while the data does not support the Frontier thesis, it is consistent with a more complex, "conditional Frontier thesis". In this view, the effect of the frontier is conditional on the way that the frontier was allocated and this in turn depends on political institutions at the time of frontier expansion. We show that for countries with the worst political institutions, there is a negative correlation between the historical extent of the frontier and contemporary income per-capita. For countries with better political institutions this correlation is positive. Though the effect of the frontier on democracy is positive irrespective of initial political institutions, it is larger the better were these institutions. In essence, Turner saw the frontier as having positive effects on development because he already lived in a country with good institutions. Prosperity, Inequality and Elites: The Determinants of Political Office-Holding in Nineteenth Century Antioquia. 2010. (Joint with James A. Robinson). In Adolfo Meisel and Maria Teresa Ramirez (eds.). Colombian Economic History in the Nineteenth Century. Fondo de Cultura Econmica, Bogot. The Poor Economic Performance of Latin America in the 19th Century is often tied to the incentives of those who wielded political power. But what determined who held this power and what were their incentives? Though some have emphasized the persistence of colonial elites, there was also much entry into politics during this period. In this paper we use unique micro data on incomes, family structure and family background from the 19th century state of Antioquia in Colombia, to examine some of the determinants of local political office-holding. We show that the most important determinant of who became mayor was personal income. Richer people were significantly more likely to become mayor. We also find some evidence that those who enjoyed non-labor income were more likely to become mayor. We have no evidence however that elite background predicts office-holding. We argue that these findings suggest that the reason Antioquia was the most economically dynamic part of Colombia in the 19th century was that it had much more functional politics than the rest of the country. Our

CAMILO GARCIA-JIMENO
OCTOBER 2010 -- PAGE 3 data also allows us to construct credible estimates of inequality and income per-capita. The data is in line with current estimates of Colombian income per-capita in the 1850s suggesting it was about 30% of the U.S. level, but it also suggests that inequality was already high at this point even before the integration of Antioquia into the World Economy. Conflicto, Sociedad y Estado Colonial en el Resguardo de Chiquiza, 1756-1801. 2008. Ediciones Uniandes, Bogot. RESEARCH PAPERS: The Political Economy of Moral Conflict: An Empirical Study of Learning and Law Enforcement under Prohibition. (Job Market Paper) The U.S. Prohibition experience shows a remarkable policy reversal. In only 14 years, a drastic shift in public opinion necessitated two amendments of the U.S. Constitution. The adoption of many other policies and laws is similarly driven by initially optimistic beliefs about potential costs of their enforcement. Their implementation, in turn, affects the evolution of beliefs, giving rise to an endogenous feedback between preferences and policy choices. This paper uses data on U.S. cities during the Prohibition Era to investigate how changes in beliefs about the enforcement costs of Prohibition affected the mapping from moral views to policy outcomes, ultimately resulting in the repeal of Constitutional Prohibition. It first develops a dynamic equilibrium learning model in which communities make collective choices about law enforcement. Individuals differ in their baseline moral views about alcohol consumption and in their priors about the effects of Prohibition on crime. While both beliefs and moral views determine policy outcomes through the process of democratic decision-making, beliefs are in turn shaped by the outcomes of past policies. The model is estimated using a maximum likelihood approach on city-level data on public opinion, police enforcement, crime, and alcohol-related legislation. The estimated model can account for the variation in public opinion changes, and for the heterogeneous responses of enforcement and violence across cities. Shutting down the learning channel significantly limits its ability to match the moments of interest. The paper concludes with a series of counterfactual exercises that explore the equilibrium implications of changes in moral views, priors concerning the costs of enforcement, the degree of polarization in society, and the local political environment. RESEARCH IN PROGRESS: Entrenchment and Encroachment Dynamics This paper studies the puzzling observation that some rulers in weakly institutionalized polities manage to entrench in power and encroach over time, at the expense of, but with the acquiescence and support of their own constituencies. I develop a game-theoretic dynamic model in an environment with incomplete information about the types of potential coalition members, and characterize how rulers might be able to exploit the competitive nature of the coalition formation game to undermine the ratchet-effect incentives of their potential supporters and replacements. I characterize the Markov-Perfect-Bayesian equilibrium of this game and show that the rulers ability to entrench over time will be favored by asymmetric public beliefs about competing coalition members, but limited by a commitment problem arising from the temptation to encroach when information is sufficiently precise.

JONATHAN E. GOLDBERG
jegold@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 732-513-7710 jegold@mit.edu http://econ-www.mit.edu/grad/jegold MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 16 Ellery Street Apartment 605 Cambridge, MA 02138 Mobile: 732-513-7710

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays in Macroeconomics and Corporate Finance DISSERTATION COMMITTEE AND REFERENCES Ricardo Caballero George-Marios Angeletos MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-373A 50 Memorial Drive, E52-251B Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-253-0489 617-452-3859 caball@mit.edu angelet@mit.edu Guido Lorenzoni MIT Department of Economics 50 Memorial Drive, E52-373A Cambridge, MA 02142-1347 617-253-4836 glorenzo@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE RELEVANT POSITIONS

M.Sc., with distinction A.B., highest honors USA

Economics Public policy GENDER: Male

London School of Economics Princeton University

2004 2002

YEAR OF BIRTH 1980

English (native), Spanish (proficient) Primary Fields: Macroeconomics, Corporate Finance Secondary Field: Economic theory

Intermediate Applied Macroeconomics (undergraduate, MIT course 14.05); Teaching assistant to George-Marios Angeletos Research assistant for Ricardo Caballero, MIT Department of Economics Junior Professional Associate, World Bank (Development Economics unit, Office of the Chief Economist, Francois Bourguignon; Latin America and Caribbean unit, Poverty & Gender group)

2010

2009-2010 2004-2006

JONATHAN E. GOLDBERG
OCTOBER 2010 -- PAGE 2

Summer analyst, Santander Central Hispano, Research and Debt Capital Markets groups, Latin America focus

2003

FELLOWSHIPS, Kauffman dissertation fellowship, Ewing Marion Kauffman Foundation, 2010-2011 HONORS, AND National Science Foundation (NSF) graduate fellowship, 2006-2009 World Bank (LAC PREM) award for contributions to analysis of health and pension AWARDS reform in Mexico, 2004 AFLSE scholarship, London School of Economics, 2003-2004 Martin A. Dale fellowship, Princeton University, 2003 PROFESSIONAL Program committee, NBER Organizational Economics working group, Fall 2009 Referee for Journal of the European Economic Association ACTIVITIES RESEARCH PAPERS: A Liquidity Model of Deleveraging (Job Market Paper) How does a permanent decrease in firms ability to borrow affect firms and workers in the long run? I provide a tractable model of deleveraging that emphasizes firms as suppliers of financial assets to workers. The model predicts that a permanent decrease in the ability of firms to borrow leads to: increased capital misallocation and decreased measured total factor productivity (TFP); an increased wedge between the average marginal product of capital and the interest rate; and increased riskiness of workers' consumption. An endogenous decrease in the interest rate plays a crucial role by amplifying these effects for firms and creating the spillover effect of riskier workers consumption. A calibration using firm-level data for U.S. entrepreneurs suggests that a reduction in firms ability to borrow consistent with the recent postcrisis decline in long-term interest rates results in a significant increase in TFP losses from misallocation. Trading and Advising on Wall Street (First draft: July 2008) A firm that engages in proprietary trading and provides trading advice to clients may be tempted to mislead its clients and trade against them for the firms own account. Indeed, Wall Street firms have recently been criticized for reported instances of trading contrary to their advice to clients. I provide a repeated-game model of how and why proprietary trading and advising coexist despite the temptation to mislead. In the model, firms face a trade-off. Profiting from information by advising incurs lower capital costs than proprietary trading, but not all the firms information can be used by clients, and clients will only pay for what (in expectation) they will use. In choosing whether to engage in proprietary trading, advising, or both, a firm takes into account that a larger-proprietary trading capacity endogenously reduces the number of clients that the firm can credibly advise.

DANIEL KENISTON
keniston@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E53-387 Cambridge, MA 02142-1347 http://econ-www.mit.edu/grad/keniston MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 19 Buckingham St. #2 Somerville MA, 02143 Mobile: 617-504-2502

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617- 253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Development Economics DISSERTATION COMMITTEE AND REFERENCES Professor Esther Duflo Professor Abhijit Banerjee MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-252G 50 Memorial Drive, E52-391D Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-258-7013 617-253-8855 eduflo@mit.edu banerjee@mit.edu Professor Robert Townsend MIT Department of Economics 50 Memorial Drive, E52-252C Cambridge, MA 02142-1347 617-452-3722 rtownsen@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

B.A.

Ethics, Politics & Economics

Yale University

2004

USA

GENDER MALE

YEAR OF BIRTH

1981

English, French (fluent), Hindi (proficient), Haitian Kreyol (proficient) Primary Field: Development Secondary Field: Industrial Organization

Development Economics: Micro Issues (course #14.771, graduate) Asst. to Profs. Esther Duflo and Ben Olken Foundations of Development Policy (course #14.74, undergraduate) Asst. to Profs. Esther Duflo and David Donaldson Evaluating Social Programs Jameel Poverty Action Lab executive education

Fall, 2009 Fall, 2009 2006-2010

DANIEL KENISTON OCTOBER 2010 -- PAGE 2

RELEVANT POSITIONS

Jameel Poverty Action Lab Research assistant to Profs. Abhijit Banerjee and Esther

India, 2004-2006

FELLOWSHIPS, Abdul Latif Jameel Graduate Fellowship (2010) HONORS, AND National Science Foundation Graduate Research Fellowship (2006) AWARDS Fulbright Fellowship (2004, declined) PUBLICATIONS: Can Informational Campaigns Raise Awareness and Local Participation in Primary Education with Abhijit Banerjee, Rukmini Banerji, Esther Duflo, Rachel Glennerster, Stuti Khemani, and Mark Shotland , Economic and Political Weekly, 42(15): 1365-1372, April 14, 2007. Local participation in the monitoring of public services is increasingly seen as a key to improving their efficiency. In rural Indian schools, committees of local leaders and parents have powers over resource allocation, monitoring, and management of school performance. However, in a baseline survey we found that most parents were not aware of even the existence of these committees. This paper evaluates three interventions to encourage beneficiaries' participation through these committees: providing information, training community members in a new testing tool, and training and organizing volunteers to hold remedial reading classes for illiterate children. We find that these interventions had no impact on community involvement in public schools, and no impact on teacher effort or learning outcomes in those schools. However, we do find that the intervention that trained volunteers to teach children to read had a large impact on activity outside public schools -- local youths volunteered to be trained to teach, and children who attended these classes substantially improved their reading skills. These results suggest that citizens face substantial constraints in participating to improve the public education system, even when they care about education and are willing to do something to improve it.

RESEARCH PAPERS:

Bargaining and Welfare: A Dynamic Structural Analysis of the Autorickshaw Market (job market paper) Bargaining for retail goods is ubiquitous in developing countries, where traders spend substantial amounts of time haggling over purchases. Would welfare be higher if trade was conducted at fixed prices instead? The answer is theoretically ambiguous: if bargaining is a low cost form of price discrimination, it may lead to greater trade and welfare and even approximate the optimal incentive compatible outcome. However, if bargaining imposes large utility costs on the participants, then a fixed price may be preferable. I develop the tools to resolve this question, specifying a model of repeated trade with hidden valuations adapted to the context of bargaining, and developing a dynamic structural estimation technique to infer the underlying parameters of the market. I then apply these techniques to bargaining data I collected from the market for local autorickshaw transportation in Jaipur, India. I find that the welfare generated by bargaining and fixed prices are remarkably similar, a result that may explain the coexistence of fixed prices in similar markets in other Indian cities.

DANIEL KENISTON OCTOBER 2010 -- PAGE 3

RESEARCH PAPERS: (CONTINUED)

Improving Police Effectiveness: The Rajasthan Experiment with Abhijit Banerjee, Esther Duflo, and Nina Singh Police reform has long been a contentious issue in India, with a history of both sweeping high-level reports and idiosyncratic station-level reforms but little evidence of progress or lasting change. This study advances the reform agenda through the introduction of randomized trials in the Indian state of Rajasthan. Four interventions were implemented in a randomly selected group of 162 police stations across 11 districts of the state: (1) weekly duty rosters with a guaranteed rotating day off per week; (2) a freeze on transfers of police staff; (3) inservice training to update skills; and (4) placing community observers in police stations. These reforms were evaluated using data collected through two rounds of surveys including police interviews, decoy visits to police stations, and a large scale crime surveythe first of its kind in India. The results illustrate that two of the interventions, the freeze on transfers and the training, do have the potential to improve the police effectiveness and public image. The other reforms showed no robust effects, an outcome that may be due to their incomplete implementation. Structural Tests for Oligopoly in Commodities Storage in Local India Agricultural Markets Development practitioners and economic theorists have both been concerned with the problem of market power in commodity storage. However, until now there has been no means to test for imperfect competition of this type that does not require data on commodity sales and stocks--data which are usually unavailable. This paper develops a dynamic structural technique that both extends and improves earlier estimators in order to estimate the degree of oligopoly in a market using only price series, and applies this to data on rice prices from rural markets in India, a context where there is much suggestive evidence and policy concern about market power in commodities storage. This draft presents preliminary results from one market, and outlines directions for future research. Great Fires: Disasters, Spillovers, and Urban Growth in 19 th Century America with Richard Hornbeck Huge, destructive urban fires were relatively common occurrence in the cities of 19 th and early 20th century America. These fires, although initially devastating, gave citizens the opportunity to coordinate their reconstruction efforts due to the knowledge that their new buildings would be surrounded by other new buildings. Contemporary sources suggest that these spillovers led to higher land and real estate values. In this study we test this claim, examining the mechanisms through which the great fires shaped urban development and agglomeration. On the city level, we merge data on fire occurrence with the 1870 to 1920 Censuses to estimate the effects of fires on real estate values and public goods. We then focus on the case of the 1872 Great Fire of Boston, using original data collected from tax records and fire insurance maps to estimate the fires effect on individual building values and construction materials.

RESEARCH IN PROGRESS:

DANIEL KENISTON OCTOBER 2010 -- PAGE 4


RESEARCH IN PROGRESS: (CONTINUED) Technology Adoption and Group Learning about Coffee Farming in Rwanda with Esther Duflo and Tavneet Suri Rwanda has ideal growing conditions for coffee and it is the main export crop, but the countrys agronomic practices and processing are in dire need of improvement. In this context, we aim to understand two main aspects of the diffusion of agricultural technologies in the coffee sector in Rwanda. In partnership with TechnoServe (TNS), a non-profit organization, we evaluate the impact and diffusion of the agronomy training part of TNSs operations. Among a set of applicants, TNS will randomly select the farmers who benefit from the agronomy training. A first objective of the research is to determine the direct impact of this training on the practice of the targeted farmers. A second objective is to better understand the diffusion of improved agricultural practices (and technologies) through social networks. Through extensive fieldwork and interviews, we survey a very large part (or the entirety) of the social network of the farmers, in order to construct complete network maps. To our knowledge, this will produce one of the first complete social network maps in conjunction with a randomized injection point for a new technology, and the first in a developing country.

MART MESTIERI
mestieri@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 617-308-7106 mestieri@mit.edu http://econ-www.mit.edu/grad/mestieri MIT PLACEMENT OFFICER Professor Nancy L. Rose 617-253-8956 DOCTORAL STUDIES: nrose@mit.edu HOME CONTACT INFORMATION 1010 Massachusetts Avenue, Apt. #42 Cambridge, MA 02138 Mobile: 617-308-7106

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Human Capital and Development DISSERTATION COMMITTEE AND REFERENCES Professor Daron Acemoglu MIT Department of Economics 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 617-253-1927 daron@mit.edu Professor Abhijit Banerjee MIT Department of Economics 50 Memorial Drive, E52-252D Cambridge, MA 02142-1347 617-253-8855 banerjee@mit.edu Professor Robert Townsend MIT Department of Economics 50 Memorial Drive, E52-251C Cambridge, MA 02142-1347 617-253-3722 rtownsen@mit.edu Professor Diego Comin HBS, BGIE Unit, Morgan Hall 269 Soldiers Field Road Boston, MA 02163 617-495-5011 dcomin@hbs.edu Universitat Autnoma de Barcelona Universitat Autnoma de Barcelona GENDER Male YEAR OF BIRTH 2006 2006 1982

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

B.A. B.S. Spanish

Economics Physics

English, Catalan, Spanish, French (intermediate) Primary Fields: Macroeconomics, Development Secondary Field: International Trade Development Economics, Macro Issues (graduate-level MIT course 14.772/Harvard course 2390c); Teaching Assistant to Professor Robert Townsend Spring 2009

MART MESTIERI
OCTOBER 2010 -- PAGE 2 FELLOWSHIPS, HONORS, AND AWARDS Ramn Areces Fellowship (2010-2011) Bank of Spain Fellowship (2008-2010) la Caixa Fellowship for Graduate Studies (2006-2008) National Spanish Prize for Academic Excellence; Economics: 3rd Prize, Physics: Honorary Mention. SEMINAR AND CONFERENCE PRESENTATIONS: LAEF Growth and Development; Santa Barbara, CA, November 2010. NBER Macroeconomics across Time and Space; Philadelphia, PA, May 2010. Bank of Spain; Madrid, Spain, June 2009. SUMMER SCHOOL: Participant at the Institute on Computational Economics, University of Chicago and Argonne National Laboratory, 2008 Wealth Distribution and Human Capital: How Do Borrowing Constraints Shape Schooling Systems? (Job Market Paper) This paper provides a theory of how the wealth distribution of an economy affects the optimal design of its education system. The model features two key ingredients. First, agents are heterogeneous both in their ability and wealth, neither of which is observable. Second, returns to schooling depend on the ability-composition of agents attending each school tier, for example, because of choices of common curricula. An education system is characterized by an assignment rule of agents to schools and by endogenous sizes of tiers. I first show that, absent borrowing constraints, private information alone does not preclude the social planner from implementing the first best educational system. With borrowing constraints, the optimal solution features (i) relatively low-ability agents selecting into higher education schools and (ii) higher education schools with less capacity. The same qualitative results obtain when I restrict the instruments available to the social planner to two commonly used instruments: school fees and exams. In addition, I show that economies with relatively tighter borrowing constraints rely more on exams and that agents performing better in exams face lower school fees. Finally, I study the optimal design problem of the social planner when agents also have access to private schooling that the social planner cannot regulate. I show that competition from the private sector undermines the capacity of the social planner to provide education to borrowing-constrained agents. Heterogeneous Trade Costs and Wage Inequality: A Model of Two Globalizations (with Sergi Basco, revise and resubmit, Journal of International Economics) We develop a model for analyzing the distributional effects of two phases of globalization and their interdependencies. We distinguish between (i) a First Globalization, characterized by trade liberalizations during the 1980s, which mainly increased trade in low skill-intensive goods and (ii) a Second Globalization, characterized by a reduction in communication costs due to the IT revolution, which raised trade in more skill-intensive goods during the 1990s. We consider a NorthSouth trade economy in which the North is skill-abundant. A freely traded final good is produced in the North using high-skill services and a bundle of inputs. Inputs differ on the intensity of middle and low-skill workers required to be produced, and are subject to heterogeneous trade costs. In the North, we find that wage inequality increases during the First Globalization. During the Second Globalization, the relative wage of high- to middle-skill workers increases, while the relative wage of middle- to low-skill is hump-shaped. In the South, we find that wage inequality increases during both. We find a complementarity between the two globalizations. The decline in the relative wage of northern middle- to low-skill workers is delayed

PROFESSIONAL ACTIVITIES

RESEARCH PAPERS:

MART MESTIERI
OCTOBER 2010 -- PAGE 3 by the extent of trade in the First Globalization. Finally, we show how asymmetric participation in the Second Globalization of two southern countries generates a discontinuous pattern of specialization. The southern country participating in the Second Globalization specializes in the least and most skill-intensive traded inputs, and wage inequality rises in this country. The Intensive Margin of Technology Adoption (with Diego Comin), NBER Working Paper #16379, September 2010. We present a tractable model for analyzing the relationship between economic growth and the intensive and extensive margins of technology adoption. The extensive margin refers to the timing of a country's adoption of a new technology; the intensive margin refers to how many units are adopted (for a given size economy). At the aggregate level, our model is isomorphic to a neoclassical growth model, while at the microeconomic level it features adoption of firms at the extensive and the intensive margin. Based on a data set of 15 technologies and 166 countries our estimates yield four main findings: (i) there are large cross-country differences in the intensive margin of adoption; (ii) differences in the intensive margin vary substantially across technologies; (iii) the cross-country dispersion of adoption lags has declined over time while the cross-country dispersion in the intensive margin has not; (iv) the cross-country variation in the intensive margin of adoption accounts for more than 40% of the variation in income per capita. Dynamics of Technology Adoption and Growth: 1800-2000 (with Diego Comin) This paper investigates the transitional dynamics associated with the acceleration in the rate of development and adoption of technologies after the industrial revolution. We provide a model to study how the intensive and extensive margin of technology adoption and an acceleration in the technological frontier affected the cross-country growth patterns in the last two centuries. We find that changes in the rate of technology development and adoption (i) have very persistent effects on growth and (ii) can accommodate very different growth dynamics for rich and poor countries. In our calibrated model, important growth differences between rich an poor countries can be sustained for more than 100 years. For instance, our calibrated model accounts for a differential of .75% in the annual growth rate between rich and poor countries over the 1960-2000 period. In addition, the model explains why there is no convergence in output despite the convergence in technology adoption, as well as the cross-country income dynamics over the nineteenth century, including the great divergence. RESEARCH IN PROGRESS: Misallocation of Human Capital: Implications for Returns to Schooling and Returns to Capital This paper studies how credit market imperfections affect the composition of investment in human capital, and shows how the composition channel reduces returns to schooling and capital in poor countries. I present a model in which individuals differ in wealth and ability. Education is modeled as a costly investment needed to take advantage of own ability. In this set-up, credit market imperfections, in addition to making human capital scarcer, generate compositional changes in its supply: wealthy, low-ability types obtain education replacing poor, high-ability types. Thus, this compositional effect reduces measured returns to schooling. In addition, if capital and labor are complements, the compositional effect reduces returns to capital. The reason is that the effective capital-labor ratio of the economy increases once the compositional effect is accounted for. Thus, this model provides a mechanism to explain why both returns to capital and education in developing countries may not be higher than in rich countries.

MART MESTIERI
OCTOBER 2010 -- PAGE 4 Human Capital Acquisition and Occupational Choice: Implications for Growth and Inequality (with Robert Townsend) We develop and estimate a general equilibrium model to investigate the implications of human capital acquisition for growth and inequality. The focus of the paper is on the process of development, which is framed as the transition of an economy to its steady state. Our model features two sectors (formal and informal) and endogenous human capital acquisition. As the economy evolves over time, it undergoes a structural transformation, because the technology by which final output is produced changes from the informal to the formal technology. The engines of this structural transformation are capital accumulation, human capital accumulation and technological progress of the formal sector. Along with the evolution of the macroeconomic variables, our model has implications for the cross-section of individual outcomes that conform the aggregate measures. We plan to test both the aggregate and microeconomic implications of the model on a panel of household surveys from Mexico and Chile. "Deconstructing International Mergers: The Role of Internet Adoption and Routine Intensity" (with Sergi Basco) In this paper we analyze how the determinants of international mergers changed with the IT revolution. We focus on the complementarity between Internet adoption and the routine intensity of the target firm in cross-border mergers. First, we document that routine intensity was a determinant of North-South mergers in the 1990s and ceases to be important in the 2000s. In contrast, routine intensity is not a determinant of North-North mergers. Then, we find a differential effect of Internet adoption of the host country on the number of international mergers. In the 1990s, Internet adoption had a negative effect in the number of (vertical) North-South mergers in routineintensive industries. However, Internet adoption had a positive effect on the number of (horizontal) North-North mergers in routine-intensive industries. These results suggest a complementarity between Internet adoption and routine-intensive industries in the North and substitutability in the South. Finally, in the 2000s, Internet adoption does not have a significant effect on cross-border mergers.

AMANDA PALLAIS
apallais@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 Mobile: 804-389-5050 apallais@mit.edu http://econ-www.mit.edu/grad/apallais MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES HOME CONTACT INFORMATION 632 Massachusetts Ave., Apt. 602 Cambridge, MA 02139 Mobile: 804-389-5050

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology PhD, Economics, Expected completion: June, 2011 DISSERTATION: Essays in Labor Economics DISSERTATION COMMITTEE AND REFERENCES Professor David Autor MIT Department of Economics 50 Memorial Drive, E52-371 Cambridge, MA 02142-1347 617-258-7698 dautor@mit.edu Professor Daron Acemoglu MIT Department of Economics 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 617-253-1927 daron@mit.edu Professor Esther Duflo MIT Department of Economics 50 Memorial Drive, E52-252G Cambridge, MA 02142-1347 617-258-7013 eduflo@mit.edu

PRIOR EDUCATION CITIZENSHIP RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

B.A. with Highest Distinction USA

Economics and Mathematics GENDER FEMALE

University of Virginia

2006

YEAR OF BIRTH

1985

Primary Fields: Labor Economics Secondary Fields: Econometrics, Economics of Education

Labor Economics II (graduate, MIT course 14.662), Teaching Assistant to Professors David Autor and Michael Piore Economics of Education (undergraduate, MIT course 14.48), Teaching Assistant to Professor Frank Levy Labor Economics and Public Policy (undergraduate, MIT course 14.64), Teaching Assistant to Professor Joshua Angrist Research and Communication in Economics (undergraduate, MIT course 14.33) Teaching Assistant to Professor Sara Ellison

Spring 2011 Spring 2011 Fall 2009 Fall 2009

AMANDA PALLAIS
OCTOBER 2010 -- PAGE 2

RELEVANT POSITIONS

Research Assistant to David Autor, MIT Research Consultant at The World Bank, Jakarta, Indonesia Research Assistant to Sarah Turner, University of Virginia

2007 2007 2005-2006 2010 2006-2009 2006-2008 2008, 2009, 2010 2006 2006 2002-2006 2006 2005 2005 2005 2005 2005 2005 2004 2004 2004

FELLOWSHIPS, Government of France, Large Research Grant for Experiments Involving Youth (received high-quality project citation) HONORS, AND National Science Foundation Graduate Research Fellowship AWARDS Presidential Fellow, Massachusetts Institute of Technology George and Obie Shultz Fund Economics Outstanding Major Award, University of Virginia Best Economics Thesis, University of Virginia Jefferson Scholar, University of Virginia European Science Days, Best Poster Award Southern Economics Association Award (Graduate Research) Phi Beta Kappa (junior year) Omicron Delta Kappa Kenneth G. Elzinga Scholarship for Academic Excellence William Maury Hill Scholarship in Economics Floyd Prize in Mathematics Robert Kent Gooch Scholarship David A. Harrison III Undergraduate Research Award Marshall Jevons Award for Undergraduate Economics Research PROFESSIONAL Referee: American Economic Journal: Applied Economics ACTIVITIES B.E. Journal of Economic Analysis & Policy Eastern Economic Journal Economics of Education Review Journal of Policy Analysis and Management Journal of Public Economics National Tax Journal Quarterly Journal of Economics Presentations: Bankard Workshop in Public Economics, University of Virginia Association for Public Policy Analysis and Management (session chair) Allied Social Science Association Annual Meeting (discussant) Society of Labor Economists Annual Meeting Allied Social Science Association Annual Meeting NBER Higher Education Working Group European Science Days, Steyr Austria (poster presentation) Southern Economics Association Meeting

November, 2010 November, 2010 January, 2010 May, 2009 January, 2009 May, 2008 July, 2006 November, 2005

PUBLICATIONS Taking a Chance on College: Is the Tennessee Education Lottery Scholarship Program a Winner? Journal of Human Resources. 2009. 44 (1): 199-222. Most policies seeking to improve high school achievement historically either provided incentives for educators or punished students. Since 1991, however, over a dozen states, comprising approximately a quarter of the nations high school seniors, have implemented broad-based merit scholarship programs that reward students for their high school achievement with college financial aid. This paper analyzes one of these initiatives, the Tennessee Education Lottery Scholarships, using individuallevel data from the ACT exams. The program did not achieve one of its stated goals, inducing more students to prefer to stay in Tennessee for college, but it did induce

AMANDA PALLAIS
OCTOBER 2010 -- PAGE 3

PUBLICATIONS large increases in performance on the ACT. Policies that reward students for (CONTINUED) performance do affect behavior and may be an effective way to improve high school achievement. Access to Elites in Economic Inequality and Higher Education, Access, Persistence, and Success, edited by Stacy Dickert-Conlin and Ross Rubenstein. 2007: 128-156. New York: Russell Sage Foundation (with Sarah Turner). Low-income students are significantly underrepresented at top colleges and universities, institutions perceived as important stepping stones to professional and leadership positions. This paper reviews the literature on the causes of this underrepresentation and addresses to what extent implementation of aggressive recruiting and generous financial aid by universities can reduce it. In particular, it examines recent initiatives by selective colleges to increase both financial aid and information provided to low-income students. While initial research and the popular press suggest that these programs succeed in their aims, we suggest caution in interpreting these results for two reasons. First, evaluation of these programs cannot separate a reshuffling of students among top universities from an increase in the total number of students attending selective institutions. Second, because these programs are often multi-pronged, it is difficult to isolate the effects of particular parts of the initiatives: for example, separating the effects of increased financial aid from those of changing admissions standards. Opportunities for Low Income Students at Top Colleges and Universities: Policy Initiatives and the Distribution of Students. National Tax Journal. 2006. 59 (2): 357-386 (with Sarah Turner). Whether the nations most selective and resource-intensive colleges and universities serve as engines of opportunity rather than bastions of privilege depends on the extent to which they increase the educational attainment of students from the most economically disadvantaged backgrounds (Bowen, Kurzweil, and Tobin, 2005). Less than 11 percent of first-year students matriculating at 20 highly-selective institutions are from the bottom quartile of the income distribution, leading to significant concerns from higher education leaders and policy makers about the role of higher education in promoting intergenerational mobility. Recently, many elite public and private universities have introduced new initiatives designed to encourage the enrollment of low-income students. This paper assesses whether the population of low-income students with high observed academic achievement is sufficiently large that aggressive institutional policies could substantially increase the representation of low-income students at elite colleges. We use administrative data from the SAT and ACT to examine where students currently send scores (as a proxy for application) and assess whether differences in family income affect students choice sets. We also discuss how the effect of outreach and financial aid policies on outcomes is likely to differ appreciably across public and private institutions. RESEARCH PAPERS Inefficient Hiring in Entry-Level Labor Markets (Job Market Paper) When a firm hires a novice worker, it obtains both labor services and information about the workers productivity. The firm must pay a sunk cost to hire the novice, but the information generated has option value: novices found to have high productivity can be rehired in subsequent periods. If competing firms also observe the novices productivity, however, the option value of hiring accrues to the worker, not the employer. Firms will accordingly under-invest in discovering novice talent unless they can claim the benefit, for example, by workers buying their entry-level jobs or signing contracts transferring the option value to the firm.

AMANDA PALLAIS
OCTOBER 2010 -- PAGE 4

RESEARCH PAPERS (CONTINUED)

I formalize this intuition in a model of the labor market in which positive hiring costs and publicly observable output lead to inefficiently low novice hiring. I test the models relevance in an online labor market by hiring 952 workers at random from an applicant pool of 3,767 for a 10-hour data entry job. In this market, worker performance is publicly observable. Consistent with the models prediction, novice workers hired at random obtain significantly more employment and have higher earnings than the control group, following the initial hiring spell. A second treatment confirms that this causal effect is likely explained by information revelation rather than skills acquisition. Providing the market with more detailed information about the performance of a subset of the randomly-hired workers raised earnings of highproductivity workers and decreased earnings of low-productivity workers. Due to its scale, the experiment significantly increased the supply of workers recognized as high-ability in the market. This outward supply shift raised subsequent total employment and decreased average wages in occupations affected by the experiment (relative to non-treated occupations), implying that it also increased the sum of worker and employer surplus. Under plausible assumptions, this additional total surplus exceeds the social cost of the experiment. Small Differences that Matter: Mistakes in Applying to College (Revise and Resubmit, Journal of Labor Economics) This paper estimates the sensitivity of students college application decisions to a small change in the cost of sending standardized test scores to colleges. In the fall of 1997, the ACT increased the number of free score reports it allowed students to send from three to four, maintaining the same $6 marginal cost for each additional score report. Afterwards, there was a large increase in the fraction of ACT-takers who sent four score reports and a large decrease in the fraction that sent three, but very little change among SAT-takers. I find that 20% of ACT-takers sent an additional application in response to the cost change. In response to the cost change, students widened the range of colleges they considered: sending scores to colleges that were both more- and less-selective than the others in their application portfolios. This could particularly benefit low-income students who are relatively unlikely both to attend college and to attend selective colleges. I conservatively estimate that sending an additional score report would increase a low-income students expected future earnings by over $6,000 by increasing her probabilities of attending college and attending a selective college. I provide evidence that students large response to this $6 cost change is inconsistent with optimal decision-making and consider explanations for students behavior. I show that it is almost impossible for a student to determine the optimal application portfolio and suggest that in the face of uncertainty students may rely on rules of thumb in deciding where to apply.

RESEARCH IN PROGRESS

Is Discrimination a Self-Fulfilling Prophecy?: Analysis through a Field Experiment(with William Pariente) Discrimination research often attempts to distinguish between two sources of discrimination: statistical discrimination and taste-based discrimination. This project uses a field experiment in a large firm to test for a third source. It tests whether managers beliefs that workers will perform poorly actually cause poor performance (a self-fulfilling prophecy). In our planned experiment, we will first test the beliefs of managers in a large French firm about the abilities of women and disadvantaged groups using an implicit association test (IAT). Then, workers will be randomly assigned to managers. After three months, we will collect objective measures of worker performance and survey workers and managers about the employment experience. This experiment will allow us to answer several questions. First, do

AMANDA PALLAIS
OCTOBER 2010 -- PAGE 5

RESEARCH IN PROGRESS (CONTINUED)

women and members of disadvantaged groups perform more poorly if they are assigned to a manager who is biased against them? If so, what is the mechanism though which managers beliefs affect worker performance (e.g., do managers assign workers they are biased against to worse tasks or spend less time training them)? Finally, given the importance of managers evaluations on workers employment trajectories, we will compare managers evaluations of workers on objective criteria to workers actual performance. We will then test whether managers give workers they are biased against poorer evaluations than are warranted. Measuring the Changing Value of Education and Ability: Evidence from Army Veterans (with Daron Acemoglu and David Autor) We exploit a new dataset on Army veterans to analyze the changes in the returns to education and (typically unobserved) ability over time. A large literature finds that the measured return to education has risen over the past few decades. However, data constraints make it difficult to distinguish whether this represents a true increase in the return to education, an increase in the return to cognitive skills, or some combination of the two. Given that it is typically easier to increase educational attainment than unobserved ability, distinguishing between these alternatives is informative about the potential effectiveness of policies aimed at reducing skill-based inequalities. Our dataset overcomes these data constraints by combining Army records for more than 1.5 million veterans with a 20-year panel of Social Security earnings data. Preliminary results show that the observed return to education increased between 1985 and 2005, controlling for Armed Forces Qualification Test (AFQT) scores, and the return to AFQT scores increased, controlling for education. A model in which education and cognitive skills combine to form a single skill and the return to this skill changes over time fits the data surprisingly well.

SAHAR PARSA
sparsa@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 617-959-3939 sparsa@mit.edu http://econ-www.mit.edu/grad/sparsa MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 177 River Street apt#2L Cambridge, MA 02139 Mobile: 617-959-3939

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Investors Horizon and Stock Prices in Financial Markets DISSERTATION COMMITTEE AND REFERENCES Professor George-Marios Angeletos Professor Victor Chernozhukov MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-251B 50 Memorial Drive, E52-371B Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-452-3859 617-253-4767 angelet@mit.edu vchern@mit.edu Professor Guido Lorenzoni Professor Leonid Kogan MIT Department of Economics MIT Sloan School of Management 50 Memorial Drive, E52-251C 100 Main Street, E62-636 Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-452-4836 617-253-2289 glorenzo@mit.edu lkogan@mit.edu

PRIOR B.A. Summa Cum Laude EDUCATION CITIZENSHIP Belgian

Economics

Universit Libre de Bruxelles YEAR OF BIRTH

2004 1981

GENDER: FEMALE

LANGUAGES French (native), Spanish (fluent), English (fluent), Farsi (native, spoken) RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE Primary Fields: Macroeconomics, Finance Secondary Fields: International Economics

Principle of Macroeconomics (Undergraduate, MIT course 14.02), Lecturer International Economics I (Graduate, MIT course 14.581), Teaching Assistant to Professor Arnaud Costinot and Professor

Fall 2010 Spring 2010

SAHAR PARSA OCTOBER 2010 -- PAGE 2

Dave Donaldson Econometrics (Undergraduate, MIT course 14.32), Teaching Assistant to Professor Whitney K. Newey Principle of Microeconomics (Undergraduate, MIT course 14.01), Lecturer International Economics I (Undergraduate, MIT course 14.581), Teaching Assistant to Professor James Anderson and Professor Kiminori Matsuyama International Trade (Undergraduate, MIT course 14.581), Teaching Assistant to Professor Arnaud Costinot Statistical Methods (Graduate, MIT course 14.381), Teaching Assistant to Professor Anna Mikusheva and Professor Victor Chernozhukov RELEVANT POSITIONS Research Assistant to Professor Antoinette Schoar Research Assistant to Professor Ricardo Caballero

Spring 2010 Fall 2009 Spring 2009 Fall 2008 Fall 2007 & 2008 2006-2008 Summer 2007

FELLOWSHIPS MIT Presidential Fellowship, 2005-2007 BAEF Fellowship, 2005-2006 RESEARCH PAPERS: Institutional Investors Short-Termism, Trading Frequency and the Volatility of Firm-Level Returns (Job Market Paper) Among scholars, practitioners and policy makers, investor short-termism and high frequency trading have been associated with excess volatility in financial markets and with a disconnect between asset prices and fundamentals. Motivated by this observation, I construct a novel measure of the intrinsic frequency of trading for each of the large US institutional investors (13-F institutions) using Thomson-Reuters Institutional Holdings quarterly data for the period 1980-2005. This measure controls for market and portfolio characteristics and identifies an investor-specific fixed effect in the frequency of trading. I then study how the composition of these fixed effects impacts stock price behavior through a VAR-return decomposition based on Campbell (1991) and Vuolteenaho (2002). This decomposition traces the innovations in stock prices to news about future cash flow (fundamentals) and future discount factors (future returns). I show that (i) securities in which investors exhibit a higher intrinsic trading frequency exhibit higher volatility, but (ii) this volatility is mainly driven by cash-flow news rather than discount-factor news. (iii) The lower volatility of the securities held by low-frequency traders is explained by a relative under reaction of such securities to cash flow news. Overall, the results challenge the view that higher frequency of trading--a commonly used proxy for investor short-termism-causes a disconnect between asset prices and fundamentals. Short-Term Traders, Learning and Informational Externalities In the presence of asymmetric information in financial markets, the price appears as a vehicle which aggregates and reveals dispersed information to market participants. This paper examines how short-term trading impacts the aggregation of information in financial markets. I develop a model where short-term traders, in an attempt to learn about the average beliefs of future market participants, make the price relatively noisier. This typically introduces a negative informational externality on long-term

SAHAR PARSA OCTOBER 2010 -- PAGE 3

investors. I show that (i) as the horizon of the informed traders decreases, the price becomes relatively less precise; (ii) an inflow of informed traders in the market can decrease the informativeness of the price when the traders have a relatively short horizon or the market is expected to be thin in the future; (iii) finally, as rational informed short-term traders have access to an extra source of information about the future price, they end up creating more noise and a decrease in the informativeness of the price might result. Thus, paradoxically, more informed trading could lead to a less informative price. RESEARCH IN Investors trading horizon and the cross-section of expected stock returns PROGRESS: (with Fernando Duarte) Using monthly frequency data, we study the impact of institutional investors intrinsic trading horizon--a commonly used proxy for the investors short-termism-on the cross-section of stock returns. Our results show that stocks held by investors with a lower trading frequency (long-term securities) earn a return of 3% per year over stocks held by investors with a higher intrinsic trading frequency (short-term securities). We document that the short-term securities exhibit significant momentum in returns. The momentum factor of Jegadeesh and Titman (1996) combined with the three Fama-French factors fail to explain the observed spread. Informational Entry Cost, Dynamic Trading and the Equilibrium Informativeness of the Price I develop a model where investors, before entering financial markets and making their investment decision, face a cost of entry. This cost is an informational entry cost they need to incur in order to make their investment decision. In particular, I assume that they can invest in one of two types of information: (i) information about future prices or (ii) information about future fundamentals of the asset they are going to invest in. I characterize the endogenous equilibrium share of investors who acquire the different types of information. I explore the impact of a change in the information precision, the cost of investing in the two types of information as well as the probability of entering the market the next period, on the equilibrium share of investors as well as the informativeness of the stock price. Firm-Level Return Decomposition, Firm-Level Heterogeneity and CrossSectional Dependence I explore the incidental parameter and the cross-sectional dependence bias generated by the introduction of firm-level data in VAR-return decomposition analysis.

SAMUEL PIENKNAGURA
spienk@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 617-777-0120 spienk@mit.edu http://econ-www.mit.edu/grad/spienk MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 2 Ware Street Apt. 201 Cambridge, MA 02138 Mobile: 617-777-0120

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays in Economic Growth DISSERTATION COMMITTEE AND REFERENCES Professor Daron Acemoglu MIT Department of Economics 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 617-253-4669 daron@mit.edu Professor George-Marios Angeletos MIT Department of Economics 50 Memorial Drive, E52-251B Cambridge, MA 02142-1347 617-452-3859 angelet@mit.edu

Professor Abhijit Banerjee MIT Department of Economics 50 Memorial Drive, E52-252D Cambridge, MA 02142-1347 617-253-8855 banerjee@mit.edu

PRIOR EDUCATION

M.Sc., highest honors

Economics

Centro de Estudios Monetarios y Financieros (CEMFI), Madrid, Spain London School of Economics (LSE), London, UK

B.Sc., first class honors

Economics

. CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS

Ecuadorian English, Spanish

GENDER: MALE

YEAR OF BIRTH 1980

Primary Fields: Macroeconomics, Economic Growth Secondary Fields: Political Economy

SAMUEL PIENKNAGURA
OCTOBER 2010 -- PAGE 2

TEACHING EXPERIENCE

History of Financial Crises (undergraduate, MIT course 14.71), Teaching Assistant to Professor Peter Temin Political Economy of Institutions and Development (graduate, MIT course 14.773), Teaching Assistant to Professors Daron Acemoglu and Benjamin Olken Principles of Macroeconomics (undergraduate, MIT course 14.02), Teaching Assistant to Professor Veronica Guerrieri Political Economy of Institutions and Development (graduate, MIT course 14.773), Teaching Assistant to Professors Abhijit Banerjee, Benjamin Olken, and James Robinson The Challenge of World Poverty (undergraduate, MIT course 14.73), Teaching Assistant to Professor Abhijit Banerjee Political Economy of Institutions and Development (graduate, MIT course 14.773), Teaching Assistant to Professors Daron Acemoglu and Abhijit Banerjee Principles of Macroeconomics (undergraduate, MIT course 14.02), Teaching Assistant to Professor Paul Willen

Fall 2010

Spring 2010

Fall 2009

Spring 2009

Fall 2008

Spring 2008

Fall 2007

RELEVANT POSITIONS

Research Assistant to Professor Peter Temin. Research Assistant to Professor Daron Acemoglu

2009 2006-2008

FELLOWSHIP, HONORS, AND AWARDS

MIT Fellowship, 2005-2007 CEMFI Premio Especial (Special Prize for best Master average), 2005 Fundacion Carolina Master Scholarship, 2003-2005

RESEARCH PAPERS:

Financial Development, R&D and Growth (Job Market Paper) This paper investigates the relation between financial development and aggregate growth. First, it provides evidence that financial development has a large positive effect on both growth and R&D. It then shows empirically that such an effect of financial development on growth is likely to be explained by the effect of financial development on R&D. Second, I build a general equilibrium model in which heterogeneous firms face liquidity constraints on their R&D investment. Firm heterogeneity stems from labor productivity, which can be improved through R&D, and a firm's ability to perform R&D. I prove the existence of a general equilibrium and characterize the equilibrium. I show that financial constraints affect more high ability firms, hence

SAMUEL PIENKNAGURA
OCTOBER 2010 -- PAGE 3

slowing down growth. Solving the model numerically shows that the predictions of the model are consistent with the empirical predictions mentioned above. In particular, it shows that aggregate growth increases as financial development increases. The model also predicts that financial development produces large welfare gains, especially at low levels of financial development. Finally, the paper examines the optimal R&D policy in the presence of financial development and firm heterogeneity. In particular I find that the optimal uniform R&D subsidy is decreasing in financial development. I also find that size dependent policies achieve higher welfare than uniform subsidies and the shape of the sizedependent R&D subsidy will depend on the level of financial development.

RESEARCH IN PROGRESS:

Entry under Incomplete Information Entry decisions are at the heart of many economic problems and most of these decisions are made under uncertainty about the future payoffs. Furthermore, entry decisions will likely create externalities on the payoffs of other entrants. I study a tractable model which analyzes entry under incomplete information. In particular, entrants receive private signals of the profitability of each industry. Signals are correlated which implies that signals also convey information on the signals received by other players. This creates a tension which will be crucial for the analysis of the model: on the one hand a higher signal implies higher expected profitability and on the other it implies higher competition and lower profits. I solve for the model and show that the equilibrium of the game will depend on the structure of the signals. In particular, I find that for high and low levels of precision in the private signal there is a unique equilibrium in pure or mixed strategies, while for intermediate precision levels we have multiple equilibria.

MAR REGUANT
mreguant@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-243D Cambridge, MA 02142-1347 617-308-7862 mreguant@mit.edu http://econ-www.mit.edu/grad/mreguant MIT PLACEMENT OFFICER Professor Nancy L. Rose 617-253-8956 DOCTORAL STUDIES: nrose@mit.edu HOME CONTACT INFORMATION 1010 Massachusetts Avenue, Apt. 42 Cambridge, MA 02138 Mobile: 617-308-7862

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Complex Bidding in Wholesale Electricity Markets DISSERTATION COMMITTEE AND REFERENCES Professor Nancy L. Rose MIT Department of Economics 50 Memorial Drive, E52-280B Cambridge, MA 02142-1347 617-253-8956 nrose@mit.edu Professor Paul Joskow MIT Department of Economics 50 Memorial Drive, E52-274 Cambridge, MA 02142-1347 617-253-8883 pjoskow@mit.edu Professor Stephen P. Ryan MIT Department of Economics 50 Memorial Drive, E52-263B Cambridge, MA 02142-1347 617-253-6082 sryan@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS RELEVANT POSITIONS

B.A. Spanish

Economics

Universitat Autnoma de Barcelona YEAR OF BIRTH

2006 1984

GENDER: Female

English (fluent), Catalan and Spanish (native), German (intermediate) Primary Fields: Industrial Organization Secondary Fields: Energy and Environmental Economics, Computational Economics Research assistant to A. Denny Ellerman at the Center for Energy and Environmental Policy Research (CEEPR), MIT 2007-2008

MAR REGUANT
OCTOBER 2010 -- PAGE 2 FELLOWSHIPS, HONORS, AND AWARDS Ramon Areces Fellowship (2009-2011) Bank of Spain Fellowship (2009, declined) George and Obie Shultz Fund (2009) ABB-MIT Energy Fellow (2008-2009) la Caixa Fellowship (2006-2008) Referee for IEEE Transactions on Power Systems Presentations: 2010: ASSA Meetings (Atlanta), IIOC (Vancouver), UC Berkeley (Energy Institute) 2009: UC Berkeley (Energy Institute) Attendee: Chicago-Argonne Institute on Computational Economics (2008) Associations: MIT Electricity Student Research Group (co-organizer) Complex Bidding in Wholesale Electricity Markets: An Empirical Assessment (Job Market Paper) Many multiunit auctions are characterized by the presence of complementarities: bidders' valuations for a particular product depend on whether or not they also win the auction for another product. In these environments, the auctioneer has the option to allow bidders to reflect these joint preferences with some additional bidding procedure. The welfare implications of introducing such bidding procedures are ambiguous. Allowing for greater flexibility in bidding may improve the efficiency in the market, but also gives bidders an additional dimension through which they may exert market power. In this paper, I develop a method to identify these counteracting welfare effects in the context of the Spanish electricity market. Wholesale electricity markets are usually organized as separate hourly auctions. These auctions are complemented with complex bids, which are additional bids that allow firms to directly express their cost complementarities across different hours of the day. I develop a model of complex bidding and estimate its structural parameters. I then compare the complex mechanism to the case in which complex bids are not allowed. I find that, while firms do exercise market power through complex bids (effectively withholding capacity and increasing prices), the positive coordination benefits of complex bidding dominate. Pollution Permits and the Evolution of Market Structure with Meredith Fowlie and Stephen P. Ryan We explore the long run dynamic implications of subjecting an imperfectly competitive industry to market-based pollution regulation. We are particularly interested in understanding how emissions permit allocation design choices can influence the evolution of industry structure in an oligopolistic market with capacity constraints. Using two decades of panel data on the US Portland cement industry, we estimate a fully dynamic model of firms' strategic entry, exit, production, and investment decisions. We then use the model to simulate counterfactual outcomes under three allocation regimes: auctioning, grandfathering, and output-based updating. We find that the dynamic evolution of market structure can vary significantly across the policy scenarios we consider. This has important implications for the overall costs of achieving desired emissions reductions and the distribution of those costs.

PROFESSIONAL ACTIVITIES

RESEARCH PAPERS:

MAR REGUANT
OCTOBER 2010 -- PAGE 3 Grandfathering and the Endowment Effect: An Assessment in the context of the Spanish National Allocation Plan with A. Denny Ellerman, CEEPR WP2008-018 , November 2008. This paper tests the Coase theorem in the context of carbon emissions trading. We investigate whether electricity generating firms were influenced in their operational decisions by their initial allocation of grandfathered emission permits. Theory suggests that under a broad set of assumptions, the initial allocation should not affect production outcomes. We exploit a non-linearity in the allocation rule of CO2 allowances across coal plants in Spain under the trial period of the European Union Emission Trading Scheme to test for the relevance of the initial allocation to abatement outcomes. The results provide no evidence of an endowment effect, as there appears to be no systematic relationship between the initial endowment and production decisions at the unit level. RESEARCH IN PROGRESS: A Cournot Model of Complex Bidding I study the welfare effects of a dynamic element of wholesale electricity auctions: complex bids. Complex bids allow firms to submit a minimum revenue requirement per day as well as the usual hourly quantity offers, enabling them to link valuations across time. The regulator faces a trade off when deciding whether to allow complex bids or not. Introducing complex bids allows for greater flexibility in bidding and has the potential of improving the efficiency in the market, as bidders can better express their cost complementarities. However, it also gives them another dimension to exert market power. In order to understand this trade-off, I develop a theoretical model of complex bidding in which firms compete in quantities. The theoretical model is broadly consistent with observed bidding patterns and can be computed analytically. I find that complex bids can either increase or decrease welfare in the market, depending on elements such as the tightness of the market or the relevance of cost complementarities. Non-convexities in Competitive Electricity Markets with Ignacio Prez-Arriaga In the presence of non-convexities, marginal prices can fail to clear the market. In the context of electricity markets, this impossibility result is known as the energy pricing problem. Complex bids are often introduced to circumvent this issue. Our goal is to understand how different complex mechanisms affect the incentives of firms both in the short and the long run. We examine first the performance of the efficient pricing mechanism proposed by ONeill et al. (2005), which implements efficient outcomes in the short run. We explore whether these efficient prices are compatible with the optimal technology mix in the market. We find that efficient prices do not in general support the optimal technology mix in the long run, as discriminatory or make-whole payments to the firms do not make cost signals visible to other technologies. We find that a mixed complex bidding design, in which the efficient outcome is achieved and the uplift payment is minimized, gives the best incentives in the long-run. Intuitively, such mechanism makes most of the cost structure visible to the firms in the market by relying substantially on the marginal price for startup costs recovery, while guaranteeing incentive compatibility by means of minimal uplift payments. This mechanism is in line with the convex-hull design suggested in Gribik et al. (2007).

MAR REGUANT
OCTOBER 2010 -- PAGE 4 Local Congestion and Market Power In electricity markets, the presence of congestion can change the scope of the relevant market. A firm can enjoy substantial market power when located in a congested area. I study the behavior of strategic firms in the presence of congestion, based on the Spanish electricity market design. In this market, there is a day-ahead market for energy. Whenever congestion appears, an additional congestion market opens to deal with congested areas. Whereas the day-ahead market uses a uniform auction rule that pays an hourly marginal price to the firms, the congestion market is discriminatory, paying to each firm the value of its own bids. I look at a change in the auction rules in the Spanish electricity market to understand the incentives of firms in congested areas. Before July 2005, firms in the market had to choose the same bids for the day-ahead and the congestion market. After July 2005, firms could submit bids separately for each of these two markets. I test predictions of optimal bidding under joint and separate bidding rules using a regression discontinuity design. The break can also be used to structurally test for optimal bidding under the two bidding rules. I also explore the implications of these two different designs when firms face the threat of market power mitigation measures undertaken by a regulator.

SIMONE G. SCHANER
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 Mobile: 617-416-6717 sschaner@mit.edu http://econ-www.mit.edu/grad/sschaner MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES HOME CONTACT INFORMATION 77 Marion Street, Apt 2 Somerville, MA 02143-3913 Mobile: 617-416-6717

sschaner@mit.edu

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Barriers to the Adoption and Optimal Use of Savings and Health Technologies DISSERTATION COMMITTEE AND REFERENCES Professor Abhijit Banerjee Professor Esther Duflo MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-252D 50 Memorial Drive, E52-252G Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-253-8855 617-258-7013 banerjee@mit.edu eduflo@mit.edu Professor Tavneet Suri MIT Sloan School of Management 100 Main Street, E62-517 Cambridge, MA 02142-1347 617-253-7159 tavneet@mit.edu

PRIOR EDUCATION CITIZENSHIP LANGUAGES RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

A.B. USA

Economics (summa cum laude) GENDER Female

Princeton University YEAR OF BIRTH

2003 1981

English (native), Spanish (basic), French (basic) Primary Fields: Development Economics Secondary Fields: Labor Economics Development Economics, Micro Issues (graduate-level MIT course 14.771); Teaching Assistant to Professors Abhijit Banerjee, Esther Duflo, and Ben Olken Econometrics (undergraduate-level MIT course 14.32); Teaching Assistant to Professor Sara Ellison Evaluating Social Programs (Jameel Poverty Action Lab Executive Education); Teaching Assistant Fall 2008 Fall 2008 .Summer 2008, a.aa2010

SIMONE G. SCHANER OCTOBER 2010 -- PAGE 2

RELEVANT POSITIONS

Research Assistant to Professor Joshua Angrist, MIT Department of Economics, Cambridge MA Research Assistant, The Urban Institute, Washington DC (promoted to Research Associate II, Spring 2006) Associate Consultant, The Boston Consulting Group, Boston MA

2007-2008 2004-2006 2003-2004

FELLOWSHIPS, Russell Sage Foundation Summer Institute in Behavioral Economics, 2010 HONORS, AND George and Obie Shultz Grant, 2009 AWARDS Russell Sage Foundation Small Grant in Behavioral Economics, 2009 National Science Foundation Graduate Research Fellowship, 2006-2010 Phi Beta Kappa, Princeton University, 2003 PROFESSIONAL Referee: American Economic Journal: Applied Economics ACTIVITIES Presentations: Northeastern Universities Development Consortium Conference, 2010 RESEARCH PAPERS Intrahousehold Preference Heterogeneity, Commitment, and Strategic Savings: Theory and Evidence from Kenya (Job Market Paper) When discount factors within the household differ, implementing the ex-ante Pareto efficient consumption allocation requires the ability to adhere to binding intertemporal contracts. In the absence of commitment, the availability of a "private" savings technology (a device that is only accessible by a single owner) may incite individuals to take costly strategic savings action in order to manipulate the time path of consumption. This paper presents a model that captures this idea and derives several testable theoretical implications. In particular, households where husbands and wives are well matched in terms of time preference should make greater use of joint (public) accounts, less use of individual (private) accounts, and make more efficient investment choices as compared to their poorly matched peers. The model informed the design of a field experiment where married couples in rural Kenya were given the opportunity to open joint and individual bank accounts at randomly assigned interest rates. The behavior of individuals in the experiment is inconsistent with ex-ante Pareto efficiency, but consistent with the proposed model of strategic savings. Savings misallocation due to strategic behavior may be substantial: in the experiment poorly matched couples bear interest rate losses that are at least 64 percent larger than those borne by well matched couples. RESEARCH IN PROGRESS One Fee Does Not Fit All: The Impact of ATM Card Provision on Formal Savings Account Use in Kenya This paper studies the impact of reducing bank account transaction costs in a developing country. Free ATM cards were offered to a randomly selected subset of newly opened accounts in Western Kenya. The ATM card reduced withdrawal fees by over 50 percent (from $0.78 to $0.38) and enabled account holders to make withdrawals from their accounts at any time of the day. The net impact of such an intervention is theoretically ambiguous: while traditional economic theory implies that reducing fees should increase account use, insights from behavioral economics suggest that positive withdrawal fees could actually be welfare enhancing for time inconsistent agents. Preliminary results indicate that ATM card provision increased savings rates and average balances for households whose demographic characteristics were associated with the lowest propensity to save in their formal accounts, as estimated in the control group. In contrast, estimated impacts are negative for households with the highest propensity to save. These results suggest that reducing

SIMONE G. SCHANER OCTOBER 2010 -- PAGE 3


RESEARCH IN PROGRESS, CONTINUED transaction costs may draw some individuals into the formal sector at the expense of other individuals who value fees as a commitment device. Information, Prices, Peers, and Treatment-Seeking Behavior: Experimental Evidence from Rural Kenya with Jessica Cohen and Pascaline Dupas This paper investigates the demand for and impact of increasing access to diagnostic testing for malaria in rural Kenya. Preliminary results suggest that getting free access to a new malaria test at the local drug shop increases the likelihood that households suspecting malaria seek a formal diagnostic test from 17 percent to 40 percent. Households appear to be responsive to test-based diagnostic information: conditional on showing up at a drug shop suspecting malaria for a patient that actually does not have malaria, households that learn their malaria status through a test are 40 percentage points less likely to buy an antimalarial than those who do not know their status at the time of purchase. We find a positive education gradient in the take-up of the new diagnostic test, and in the likelihood to revise ones long-run beliefs about malaria risk, but a negative education gradient in the compliance rate with test result, suggesting that educated households are more skeptical and need to experiment with the product before adopting it. We also find evidence that adoption of the new testing tool diffuses through social networks. Prices, Diagnostic Tests and the Demand for Malaria Treatment: Evidence from a Randomized Trial with Jessica Cohen and Pascaline Dupas This paper reports on a field experiment from Western Kenya in which subsidized Artemisinin Combination Therapies (ACTs one of the only effective antimalarials for this region) were made available in private sector drug shops, along with subsidized Rapid Diagnostic Tests (RDTs) for malaria. We explore whether the targeting of a private sector ACT subsidy to people with confirmed malaria could be improved by simultaneously subsidizing diagnostic tests. We find that 32 percent of ACT takers overall (and 53 percent of those aged 5 and above) do not have malaria. Further, rates of over!treatment increase as the price of ACTs declines. When offered a voucher for subsidized RDTs, more than 80 percent of households who visit the drug shop choose to get the patient tested prior to ACT purchase. However, because 60 percent of people who test negative go on to purchase ACTs, RDTs only modestly improve targeting. Overall, in the absence of any information or marketing campaign on RDTs, our estimates suggest that the availability of subsidized RDTs in drug shops can increase the share of ACT users who are malaria!positive by 11 percentage points.

PAUL SCHRIMPF
paul_s@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 617-258-9716 paul_s@mit.edu http://econ-www.mit.edu/grad/paul_s MIT PLACEMENT OFFICER Professor Nancy L. Rose 617-253-8956 DOCTORAL STUDIES: nrose@mit.edu HOME CONTACT INFORMATION 270 Norfolk St Apt 1A Cambridge MA, 02139 Mobile: 773-710-4775

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: An estimator for dynamic games with continuous states and controls DISSERTATION COMMITTEE AND REFERENCES Professor Victor Chernozhukov MIT Department of Economics 50 Memorial Drive, E52-371B Cambridge, MA 02142-1347 617-253-4767 vchern@mit.edu Professor Amy Finkelstein MIT Department of Economics 50 Memorial Drive, E52-357 Cambridge, MA 02142-1347 617-253-4149 afink@mit.edu Professor Whitney K. Newey MIT Department of Economics 50 Memorial Drive, E52-262D Cambridge, MA 02142-1347 617-253-6420 wnewey@mit.edu

PRIOR EDUCATION CITIZENSHIP RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

B.A. B.A. U.S.

Economics Mathematics

University of Chicago University of Chicago

2005 2005

Primary Field: Econometrics Secondary Field: Computational Economics Econometrics (undergraduate, MIT course 14.32), Teaching Assistant to Professor Joshua Angrist Programming for economists (graduate, mini-course), Lecturer Nonlinear Econometric Analysis (graduate, MIT course 14.385) Teaching Assistant to Professor Victor Chernozhukov and Professor Whitney Newey Time Series Analysis (graduate, MIT course 14.385) Teaching Assistant to Professor Anna Mikusheva Spring 2009 January 2009, 2008 Fall 2008 Fall 2008, 2007

PAUL SCHRIMPF
OCTOBER 2010 -- PAGE 2 New Econometric Methods (graduate, MIT course 14.386) Teaching Assistant to Professor Whitney Newey Econometrics (graduate, MIT course 14.382) Teaching Assistant to Professor Jerry Hausman RELEVANT POSITIONS FELLOWSHIPS, HONORS, AND AWARDS Research Assistant to Professor Amy Finkelstein Research Assistant to Professor James Heckman MIT Graduate Fellowship, 2005-2007 D. Gale Johnson award for exemplary undergraduate thesis, 2005 Spring 2008 Spring 2008 2005-2010 2003-2005

PROFESSIONAL ACTIVITIES

Referee for: The Economic Journal, Journal of Econometrics, Journal of Public Economics, and Review of Economic Studies

PUBLICATIONS:

Optimal Mandates and the Welfare Cost of Asymmetric Information: Evidence From the U.K. Annuity Market with Liran Einav and Amy Finkelstein. Econometrica, 78(3), 1031-1092, May (2010). An estimator for dynamic games with continuous states and controls with an application to pipeline investment (Job Market Paper) This paper analyzes dynamic games with continuous states and controls. I give conditions under which the payoff function is identified by the observed distribution of states and controls. I propose a two-step semiparametric estimator for the model. In the first step the transition densities and policy function are estimated nonparametrically. In the second step, the parameters of the profit function are estimated from the optimality conditions of the model. I give high-level conditions for the estimates to be consistent and parameters to be root-n-asymptotically normal. I show that a kernel based estimator satisfies these conditoins. Simulations demonstrate the finite sample performance of the estimator. As an illustrative example, I examine investment in natural gas pipelines. Selection on moral hazard in health insurance with Liran Einav, Amy Finkelstein, Stephen Ryan, and Mark Cullen Existing empirical work on asymmetric information in insurance markets tends to focus either on selection or on moral hazard, but not on how they interact. In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such selection on moral hazard can have important implications for attempts to ameliorate the consequences either of selection or of moral hazard. To explore these issues, we develop a model of plan choice and medical utilization, and estimate it using individual-level panel data from a single firm, containing information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all, of the firm's employees. We find substantial selection on moral hazard in our setting, with

RESEARCH PAPERS:

PAUL SCHRIMPF
OCTOBER 2010 -- PAGE 3 individuals who exhibit greater behavioral response to coverage also selecting greater coverage. For example, our estimates suggest that moral hazard type and health expectations are of similar importance in determining insurance selection, or that abstracting from selection on moral hazard could lead one to substantially overestimate the spending reduction associated with introducing a high deductible health insurance option. RESEARCH IN PROGRESS: Estimation of best linear approximations to set identified functions with Arun G. Chandrasekhar, Victor Chernozhukov, and Francesca Molinari We consider the estimation of the set of best linear approximations to a set identied function. We extend the partial identication literature by allowing our bounds to by any estimable functions, potentially even indexed by some parameter. Characterizing the identied set via its support function, we develop the limit theory for the support function and prove that the function approximately converges to a Gaussian process. Limit inference results and the validity of a Bayesian bootstrap is proved as well. The bounds may be estimated by either non-parametric or parametric means and may carry an index. This nests the canonical examples in the literature interval valued outcome data and interval valued regressor data in mean regression as special cases. Since the bounds may carry an index, our method covers applications beyond mean regression. These include quantile and distribution regression with interval valued data, sample selection problems, as well as mean, quantile, and distribution treatment effects. Moreover, our framework allows for the utilization of instruments. To illustrate our framework, we perform simulations for the quantile treatment effect in the selection model and, as an example, study female labor participation along the lines of Mulligan and Rubinstein (2008).

JENNY SIMON
jensimon@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 1-617-401-6198 jensimon@mit.edu http://econ-www.mit.edu/grad/jensimon MIT PLACEMENT OFFICER Professor Nancy L. Rose 1-617-253-8956 nrose@mit.edu DOCTORAL STUDIES: HOME CONTACT INFORMATION 8 Dickinson St. Apt. 3 Somerville, MA 02143 Mobile: 1-617-401-6198

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland 1-617-253-8787 pvhoag@mit.edu

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Optimal Policy and the Coexistence of Markets and Governments DISSERTATION COMMITTEE AND REFERENCES: Professor Daron Acemoglu Professor Ivn Werning MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-380B 50 Memorial Drive, E52-251A Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 1-617-253-1927 1-617-452-3662 daron@mit.edu iwerning@mit.edu Professor James Poterba MIT Department of Economics 50 Memorial Drive, E52-350 Cambridge, MA 02142-1347 1-617-253-6673 poterba@mit.edu

PRIOR EDUCATION

M.Sc. in Economics and Management Science Humboldt University Berlin, with distinction Jnkping International Business School, Sweden Erasmus Exchange Student German Female 1982 German (native), English (fluent), French (intermediate) Macroeconomics, Public Finance

2006 2004

CITIZENSHIP GENDER YEAR OF BIRTH LANGUAGES RESEARCH & TEACHING FIELDS RELEVANT POSITIONS

Research Assistant for Professor Harald Uhlig Humboldt University Berlin

2005-2006

JENNY SIMON
OCTOBER 2010 PAGE 2 TEACHING EXPERIENCE PROFESSIONAL ACTIVITIES FELLOWSHIPS, HONORS, AND AWARDS Introduction to Statistical Methods in Economics (undergraduate) Teaching Assistant to Nirupama Rao, MIT Invited Presentation, University St. Gallen Visiting Scholar, Collaborative Research Center 649 at HU Berlin Peters-Beer-Stiftung, Fellowship World Economy Laboratory (MIT), Fellowship German Academic Exchange Service (DAAD), Doctoral Fellowship Award for the best Master's degree in Economics and Management Science, Wirtschaftswissenschaftliche Gesellschaft an der Humboldt-Universitt zu Berlin e.V. Fall 2008 & Spring 2010 Sep. 2010 Jan. 2007 2006-2011 2006-2008 2007-2008 2006

RESEARCH PAPERS:

Financial Markets as a Commitment Device for the Government (Job Market Paper) How do financial markets shape the government's ability to implement social redistribution? Individuals typically do not constrain consumption to equal their netof-tax income every period, but instead use private markets to allocate their resources over time. Optimal redistributive policy ought to take agents' involvement in financial markets into account. To answer the posed question, I study a two period endowment economy with heterogeneous income types that are private information where a government without commitment cannot provide any social insurance. I show how agents' involvement in a financial market can improve the government's ability to commit at least to a partially separating allocation in the second period, enabling it to provide some social insurance. In this world, agents borrow against their promised income, and defaulting on these loans is costly. This changes the government's expost incentives to renege on the promised tax schedule and fully redistribute, because some agents would have to default on their loans. I show that whenever this default cost is positive, the government is able to commit to a schedule that only pools some agents of similar type together. In other words, it serves as a commitment device in the sense that it enables the government to commit to not exploit a limited amount of information. As the default cost increases, the government is able to commit to a higher degree of separation, eventually reaching full commitment. Thus, the presence of well-functioning financial markets may actually facilitate rather than hinder redistribution. Political Stability and Redistribution I study the impact of political stability on redistributive fiscal policy. In contrast to existing studies, I model the degree of stability not as the probability of a regime switch, but as the likely discrepancy between the distribution of Pareto weights in the objective functions of the current and the future government. According to this definition, an economy might be relatively politically stable, even if governments switch with high frequency, as is the case in many Western democracies. As long as power switches are unlikely to imply swings between opposite extremes in the political spectrum, resulting policy over time can be relatively stable from the agents' point of view. I then show that redistribution across a heterogeneous population with private information can be done more efficiently in more politically stable economies. The reason is that in order to redistribute, agents must be provided with incentives to reveal their private information truthfully. In a politically unstable economy, revealing information exposes agents to an additional risk: A new government might place a much lower Pareto weight on them and exploit the information to their disadvantage. Providing incentives for truthful revelation thus becomes more expensive - informational rents and thus inefficiency will be higher.

RESEARCH IN PROGRESS:

JENNY SIMON
OCTOBER 2010 PAGE 3 RESEARCH IN PROGRESS: Public Spending in Economic Unions How does the composition of a union of economies like the EU affect the amount of its public spending? I analyze a setup where raising revenue to contribute to the collective budget is a domestic responsibility. Spending, on the other hand, is regulated through a bargaining process between the governments of the union's members, and individual bargaining power is positively related to the contribution to the collective budget. Governments may differ both in their preferences for the total amount of public spending, and in their preferences over the composition of spending. Both the composition of spending and each country's share of the collective budget are determined through bargaining between the governments. If all members of the union have homogeneous preferences over the composition of spending, they will raise revenue according to their preference of total spending, and through the bargaining process receive the optimal share to be spent in their country. However, if preferences over the relative importance of projects differ, governments have an incentive to raise more revenue than optimal to increase their bargaining power and influence the composition of spending in their favor. This disproportionately affects those individual economies with a preference for higher overall spending to begin with. The findings suggest, that in unions where bargaining power is linked to budget contributions, public spending is suboptimally high whenever preferences over the composition of spending differ across the union's members.

ALLISON VICTORIA THOMPKINS


avthompk@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-308 Cambridge, MA 02142-1347 617-452-3954 avthompk@mit.edu http://econ-www.mit.edu/grad/avthompk MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 70 Pacific Street, Apt. 113 Cambridge, MA 02139 Mobile: 617-452-3954

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Disability and Employment DISSERTATION COMMITTEE AND REFERENCES Professor David Autor Professor Joshua Angrist MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-371 50 Memorial Drive, E52-353 Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-258-7698 617-253-8909 dautor@mit.edu angrist@mit.edu Professor Esther Duflo MIT Department of Economics 50 Memorial Drive, E52-252G Cambridge, MA 02142-1347 617-258-7013 eduflo@mit.edu

PRIOR EDUCATION

B.A. Summa Cum Laude

Mathematical Economics

Scripps College

2004

CITIZENSHIP

United States

GENDER

Female

LANGUAGES RESEARCH & TEACHING FIELDS

English (Fluent), Spanish (Proficient) Primary Fields: Labor Secondary Fields: Development

RELEVANT POSITIONS

Economic Consultant, The World Bank, Washington, DC Statistical Intern, Equal Employment Opportunity Commission, Washington, DC

2008-2009 2004

ALLISON VICTORIA THOMPKINS

OCTOBER 2010 -- PAGE 2

OTHER POSITIONS

Disability Policy Intern, Senator John Kerry, Boston, MA

SUMMER 2008

FELLOWSHIPS, NBER Pre-Doctoral Fellowship in Health and Aging HONORS, AND National Science Foundation Graduate Research Fellowship MIT Graduate Fellowship AWARDS Ford Pre-doctoral Fellowship Joan Robinson Prize in Economics Scripps College Alumnae Award Phi Beta Kappa Truman Scholarship James E. Scripps Scholar

2010-2011 2007-2010 2004-2007 2004-2007 2004 2004 2004 2003 1997-2004

RESEARCH PAPERS:

Microlending in India: An Equal Access Possibility (Job Market Paper) People with disabilities are disproportionately represented among the poorest of the poor in developing countries. An increasingly common method of combating poverty in developing countries, providing microlending through Self Help Groups, has been largely unavailable to the disabled. This paper reports on one of the first programs in India to provide people with disabilities access to Self Help Groups and microlending. Between 2002 and 2004, the Indira Kranthi Patham program began over 23,000 Self Help Groups for people with disabilities in rural Andhra Pradesh. I evaluate the effect of this program on borrowing, education, labor market, and asset ownership outcomes by comparing people with disabilities to their non-disabled siblings in treatment and control villages. The estimates suggest that the program led to increased borrowing, education, and asset ownership, while having negative to zero impact on labor market participation among the disabled. The Long-term Employment Consequences of the Americans with Disabilities Act In 1990, Congress passed the Americans with Disabilities Act(ADA) to improve the labor market opportunities of the disabled. Immediately following the enactment of the ADA, the employment rate of people with disabilities declined. However, the long-term employment consequences of the ADA have not been studied. Interest in the long-term post-ADA employment trends of people with disabilities derives from the weakening of the ADAs employment provisions by U.S. Courts. The weakening of these provisions has decreased the cost to employers of hiring disabled employees. This paper uses variation in state disability laws and data from twenty years of the Current Population Survey to determine the long-term impact of the ADA on the employment of people with disabilities.

RESEARCH IN PROGRESS:

The Impact of the Americans with Disabilities Act on the Earnings of Disabled Men and Women In 1990, disabled adults earned real wages that were 19 percent less than those of the non-disabled. To increase the wages of the disabled, Congress passed the Americans with Disabilities Act (ADA) in 1990, which outlawed discrimination against the disabled in hiring and required firms to provide reasonable accommodations to

ALLISON VICTORIA THOMPKINS

OCTOBER 2010 -- PAGE 3

disabled employees. Since the ADA went into effect, however, the wages of disabled men have remained unchanged at best, and decreased at worst, and the wages of disabled women have not been studied. Prior studies of the wage affects of the ADA compare the earnings of disabled men to non-disabled men and do not explicitly study the ADAs impact on the wages of disabled women. Using data from the March Current Population Survey, this paper shows that a disparity in earnings of disabled men and disabled women exists and the ADA had disparate impacts on the wages of disabled men and disabled women.

ALEXANDER WOLITZKY
wolitzky@mit.edu

MASSACHUSETTS INSTITUTE OF TECHNOLOGY


OFFICE CONTACT INFORMATION MIT Department of Economics 50 Memorial Drive, E52-391 Cambridge, MA 02142-1347 201-274-4246 wolitzky@mit.edu http://econ-www.mit.edu/grad/wolitzky MIT PLACEMENT OFFICER Professor Nancy L. Rose nrose@mit.edu 617-253-8956 DOCTORAL STUDIES: HOME CONTACT INFORMATION 548 Lowell Mail Ctr 10 Holyoke Pl Cambridge, MA 02138 Mobile: 201-274-4246

MIT PLACEMENT ADMINISTRATOR Mr. Peter Hoagland pvhoag@mit.edu 617-253-8787

Massachusetts Institute of Technology (MIT) PhD, Economics, Expected completion June 2011 DISSERTATION: Essays on Dynamic Games DISSERTATION COMMITTEE AND REFERENCES Professor Glenn Ellison Professor Daron Acemoglu MIT Department of Economics MIT Department of Economics 50 Memorial Drive, E52-380A 50 Memorial Drive, E52-380B Cambridge, MA 02142-1347 Cambridge, MA 02142-1347 617-253-8702 617-253-1927 gellison@mit.edu daron@mit.edu Professor Muhamet Yildiz MIT Department of Economics 50 Memorial Drive, E52-357 Cambridge, MA 02142-1347 617-253-5331 myildiz@mit.edu

PRIOR EDUCATION CITIZENSHIP RESEARCH & TEACHING FIELDS TEACHING EXPERIENCE

A.B., summa cum laude

Economics and Mathematics

Harvard University

2007

USA

GENDER: Male

YEAR OF BIRTH

1985

Primary Field: Theory Secondary Fields: Political Economy, Industrial Organization

Microeconomic Theory III (graduate, MIT Course 14.123), Teaching Assistant to Professor Muhamet Yildiz Microeconomic Theory IV (graduate, MIT Course 14.124), Teaching Assistant to Professor Matthias Dewatripont Principles of Economics: Microeconomics (undergraduate, Harvard Summer School Course ECON S-10a), Teaching Assistant to Professor Hossein Kazemi Resident Tutor in Economics, Lowell House, Harvard University Research Assistant to Professor Daron Acemoglu Research Assistant to Professor Glenn Ellison Research Assistant to Professor Robert Gibbons

Spring 2011 Spring 2011 Summer 2006

RELEVANT POSITIONS

2009 - 2011 2009 2008 2007

ALEXANDER WOLITZKY
OCTOBER 2010 -- PAGE 2

Research Assistant to Professor Kenneth Rogoff

2004 - 2005

FELLOWSHIPS, Institute for Humane Studies Fellowship (2010-2011) HONORS, AND Kenan Sahin Presidential Graduate Fellowship (2007-2008) National Science Foundation Graduate Research Fellowship (2007-2010) AWARDS Williams Prize (best overall record in economics in Harvard College) (2007) Harris Prize (best senior thesis in economics in Harvard College) (2007) Hoopes Prize (one of the best senior theses in Harvard College) (2007) PROFESSIONAL Referee for: Review of Economic Studies; Journal of Law, Economics, and Organization; Review of Economic Design ACTIVITIES Presentations and Invited Conferences: International Industrial Organization Conference (Boston, April 2009) CSIC Conference on Determinants of Social Conflict (Madrid, January 2010) Stanford/UWI/CaPRI Political Economy Conference (Kingston, February 2010) 21st International Conference on Game Theory (Stony Brook, July 2010) Sackler National Academy of Science Conference on the Dynamics of Social, Political, and Economic Institutions (Irvine, December 2010) PUBLICATIONS: The Economics of Labor Coercion, Econometrica, Forthcoming (joint with Daron Acemoglu). Throughout history and in many developing countries today, many labor transactions are coercive, in the sense that force or the threat of force plays a central role in convincing workers to accept employment or its terms. We propose a tractable principal-agent model of coercion, based on the idea that coercive activities by employers affect the participation constraint of workers. We show that coercion and effort are complementary, so that coercion increases effort. However, coercion always reduces utilitarian social welfare. Better outside options for workers reduce coercion, but greater demand for labor increases coercion. We then embed the (coercive) principal-agent model in general equilibrium, and study when and how labor scarcity encourages coercion. General equilibrium interactions working through the price of output lead to a positive relationship between labor scarcity and coercion, while those working through the outside option lead to a negative relationship. In addition, markets in slaves make slaves worse off, conditional on enslavement, and coercion is more viable in industries that do not require relationship-specific investment by workers. Dynamic Monopoly with Relational Incentives, Theoretical Economics, 2010, Vol. 5, 479-518. A monopoly seller often has the option of failing to deliver a good (or of delivering a good of substandard quality) after receiving payment. The monopoly may be induced to deliver the (quality) good if consumers expect that the monopoly will not deliver in the future if it does not deliver today. If the good is non-durable and consumers are anonymous, the monopoly's optimal strategy is to set price equal to the static monopoly price each period if the discount factor is high enough, and otherwise to set the lowest price at which it can credibly promise to deliver the good. If the good is durable, an intuitive lower bound on the monopoly's optimal profit is derived for any discount factor, which converges to the optimal static monopoly profit as the discount factor converges to one, in contrast to the Coase conjecture. Fully Sincere Voting, Games and Economic Behavior, 2009, Vol. 67, 720-735. In a general social choice framework where the requirement of strategy-proofness may not be sensible, a social choice rule is called fully sincere if it never gives any

ALEXANDER WOLITZKY
OCTOBER 2010 -- PAGE 3

individual an incentive to vote for a less-preferred alternative over a more-preferred one, and provides an incentive to vote for an alternative if and only if it is preferred to the default option that would result from abstaining. It is shown that fully sincere social choice rules are convex combinations of the rule that chooses each alternative with probability equal to the proportion of the vote it receives and an arbitrary rule that ignores voters' preferences. The natural probabilistic analog of approval voting is the fully sincere rule that allows voters maximal flexibility in expressing their preferences and gives these preferences maximal weight. RESEARCH PAPERS: Reputational Bargaining under Knowledge of Rationality (Job Market Paper) Two players announce bargaining postures to which they may become committed and then bargain over the division of a surplus. The share of the surplus that a player can guarantee herself under first-order knowledge of rationality is determined (as a function of her probability of becoming committed), as is the bargaining posture that she must announce in order to guarantee herself this much. This maxmin share of the surplus is large relative to the probability of becoming committed (e.g., it equals 30% if the commitment probability is 1 in 10, and equals 5% if the commitment probability is 1 in 1 billion), and the corresponding bargaining posture simply demands this share plus compensation for any delay in reaching agreement. The paper also considers whether a larger share can be guaranteed if there is higher-order knowledge of rationality, and relates the outcome of the model to the outcomes of a broad class of discrete-time bargaining procedures with frequent offers. Repeated Public Good Provision, Revision Requested by Review of Economic Studies This paper studies the effects of group size and structure on the maximum level of a public good that can be provided in sequential equilibrium in repeated games. Monitoring is assumed to be private and all-or-nothing, in that in every period player i either perfectly observes player j's contribution to the public good or gets no information about player j's contribution. This class of games generalizes both random matching and monitoring on networks. The main result is that the maximum level of public good provision can be sustained in grim trigger strategies. If all players are equally observable, comparative statics on the maximum per capita level of public good provision depend on the monitoring technology only through a simple statistic: its effective contagiousness. Under broad conditions, making monitoring less uncertain in the second-order stochastic dominance sense increases public good provision. For games played on asymmetric social networks, a new notion of network centrality is introduced, under which more central players make larger contributions; in addition, all players in better connected networks can contribute more to the public good. Indeterminacy of Reputation Effects in Repeated Games with Contracts, Revised and Resubmitted to Games and Economic Behavior This paper studies whether allowing players to sign binding contracts governing future play leads to reputation effects in repeated games with long-run players. The analysis of Abreu and Pearce (2007) is extended by allowing for the possibility that different behavioral types may not be immediately distinguishable from each other. Given any prior over behavioral types, a modified prior is constructed with the same total weight on behavioral types and a larger support under which almost all efficient, feasible, and individually rational payoffs are attainable in perfect Bayesian equilibrium. Thus, whether reputation effects emerge in repeated games with contracts depends on details of the prior distribution over behavioral types other than its support.

ALEXANDER WOLITZKY
OCTOBER 2010 -- PAGE 4 A Search Cost Model of Obfuscation, Revision Requested by RAND Journal of Economics (joint with Glenn Ellison) In industries from finance to online retail, firms appear to withhold relevant price information from consumers. This paper develops search-theoretic models in which it is individually rational for firms to engage in obfuscation. It considers oligopoly competition between firms selling a homogeneous good to a population of rational consumers who incur search costs to learn each firm's price. Search costs are endogenized: obfuscation is equated with unobservable actions that make it more time-consuming to inspect a product and learn its price. If search costs are even slightly convex in time spent searching, obfuscation has a dramatic effect on the set of equilibrium price distributions. The paper also examines the consequences of changes in consumer search costs, as well as the cross-sectional relationship between prices and obfuscation. Career Concerns and Performance Reporting in Optimal Incentive Contracts A principal-agent model is analyzed in which the principal sends a nonverifiable report of output to a competitive labor market interested in the agent's ability. When the principal can offer any contract to the agent, the principal's report cannot influence the market's valuation of the agent in equilibrium. In the presence of a limited liability constraint, the principal's report can influence the market's valuation of the agent, but only by partitioning outputs into two classes. In such an informative equilibrium, the principal is always better off than in a babbling equilibrium, and may even be better off than in any equilibrium without the limited liability constraint.