PUBLICATION
Interest Rate Misalignments and Monetary Policy: Evidence from U.S. States
with Zo Andriantomanga and N. Kundan Kishor, Economic Inquiry, 2026. [PDF] [Replication Package]
We examine whether a uniform monetary policy effectively addresses diverse state-level economic conditions in the U.S. Using quarterly data from 1989 to 2017 for 33 states, we construct state-optimal interest rates based on Taylor rule frameworks incorporating local inflation and unemployment gaps. Deviations from the federal funds rate are large, persistent, and cluster regionally. Local projections show that a 1 pp positive deviation is associated with a 0.6 pp decline in headline inflation and an increase in unemployment, with the strongest effects in non-tradable sectors. State-specific deviation shocks elicit larger and longer-lasting responses than aggregate shocks, underscoring the importance of cross-sectional heterogeneity.
JOB MARKET PAPER
Output Gap Measures, Data Revisions, and Predictive Performance
2026.
This paper compares eight output gap methods and four forecast combinations on U.S. data from 1980 to 2025. Each gap is estimated ex post, in quasi-real time, and in real time, which separates the effect of later observations from that of data revisions. The estimates differ in level, volatility, and cyclical timing. Ex post, the HP gap signals recessions a year ahead and, before 2020, improves growth forecasts, as do simple combinations. These gains largely disappear once the sample is truncated at each forecast date. In real time, neither individual gaps nor combinations significantly improve on current growth for recessions or on an ARMA benchmark for growth, even when they revise little.
WORKING PAPERS
Financial Development and Industrial R&D: Financial Depth Matters
with Rebecca Neumann. Revise and Resubmit at Economics of Innovation and New Technology, 2026.
Does it matter which dimension of a country's financial system is well developed for how its industries fund innovation? Using industry-level data across 18 OECD countries from 1995 to 2019 and the IMF's multidimensional Financial Development Index, we examine how the depth, access, and efficiency of financial institutions and markets shape R&D intensity. Following the external finance dependence approach, we interact each financial development measure with an industry's reliance on outside capital. The effect runs through depth. The depth of financial institutions, and to a lesser extent of financial markets, raises R&D intensity in the industries that depend most on external finance, while access and efficiency show little systematic effect. The result is strongest in manufacturing and holds under a dynamic panel treatment. What supports industrial innovation is the scale of financial intermediation, its capacity to supply large volumes of capital, rather than its reach or efficiency.
Real-Time Output Gaps and Inflation Forecasts
Finalist, Graduate Student Paper Competition, Illinois Economics Association, 2026.
Asks whether real-time output gaps improve inflation forecasts once inflation's own persistence is accounted for, judging the Phillips curve against both a random walk and the autoregression it nests. The gaps significantly beat the autoregression only at intermediate horizons (three and four quarters), mostly in forecasts for 2020 and later.
Government Spending and Industrial R&D: Evidence from OECD Countries
with Rebecca Neumann, 2026.
Interacts fiscal variables with an industry's exposure to government procurement, built from input-output tables. Directed public research funding reallocates private R&D toward the industries that sell to government rather than raising it economy-wide, and the two effects offset almost exactly at the average level of procurement dependence.
WORK IN PROGRESS
Estimating the Natural Rate of Interest at the U.S. State Level
Adapts the Holston, Laubach, and Williams framework to individual states, asking whether the benchmark for judging policy stance is itself regionally uneven.