Working Papers
Working Papers
Asymmetric Fertility Elasticities, with Anson Zhou and Sam Engle, click here for slides
Is it more challenging for the government to increase fertility rate rather than decrease it? In this paper, we provide systematic evidence for such asymmetry and demonstrate that overlooking this factor can lead to significant welfare losses.
Presentation at:
The 12th Shanghai Macroeconomics Workshop
The 2024 HKU Macroeconomics Workshop
The 50th Xiangzhang Seminar in Economics
2024 Asian Summer School in Econometrics and Statistics
2024 EEA Annual Meeting
2025 AEA Annual Meeting
Abstract: The last five decades witnessed a remarkable reversal where many countries around the world shifted from suppressing to maintaining or promoting childbirth. This paper utilizes historical data from this episode to provide systematic evidence suggesting that the effectiveness of pro-fertility policies is smaller than the anti-fertility ones, weighing against standard models with smooth fertility demand. To explain this fact, we develop a behavioral theory of fertility choice featuring a simple intuition: due to the trade-off between fertility and consumption, households with loss aversion over the current living standard are more reluctant to increase fertility than to reduce it upon symmetric changes in the shadow price of children. Lastly, we embed asymmetric fertility elasticities into a dynamic model where the social planner minimizes the costs associated with fertility that is either too high or too low. We show that with asymmetric elasticities, fertility levels possess positional values that should be taken into account in policy evaluations.
Monetary Shock and Social Crisis: Evidence from Qing China, with Ting Chen, Jinan Li and Yuan Zi, click here for slides
How does the contraction of the money supply undermine social stability? By leveraging the unique institutional context of 19th-century China, we provide comprehensive causal evidence on this topic at the most granular administrative unit level.
Presentation at:
HKU Economic History Workshop
The 2024 Zhejiang University Historical Political Economy Workshop
The 10th Quantitative History Summer School
The New Economic History of China Workshop, University of Melbourne
Abstract: This paper provides empirical evidence on the non-economic costs of negative monetary shocks. We examine the disruption of China’s silver supply during the Latin American Revolution as an exogenous source of decrease in money supply and exploit China’s unique currency allocation system to construct a cross-sectional exposure to the monetary shock. Using an original conflict dataset covering 1,549 counties from 1801 to 1840, we demonstrate that the negative monetary shock leads to a significant increase in the frequency of social unrest. We also highlight four channels through which this effect occurs: economic depression due to higher financing costs, rising living costs caused by a decrease in cross-regional trade, increased tax burdens resulting from rigidity in nominal tax rates, and intensifying inequality between different social classes. Our findings offer a new perspective on the benefits and costs of contractionary monetary policy.