Inflation Distorts Relative Prices: Theory and Evidence
with Andrey Alexandrov and Henning Weber, April 2023

Using a novel identification approach derived from sticky price theories with time or state-dependent adjustment frictions, we empirically identify the effect of inflation on relative price distortions. The approach can be directly applied to micro price data, does not rely on estimating the gap between actual and flexible prices, and only assumes stationarity of unobserved shocks.

Subjective Housing Expectations, Falling Natural Rates and the Optimal Inflation Target
with Oliver Pfaeuti and Timo Reinelt,  March 2022,  also available as CEPR Discussion Paper

The paper documents a number of dimension along which how housing price expectaitons deviate from rational expectations. It then shows that these deviations and the behavior of housing prices can be jointly explained by capital gain extrapolation. Embedding capital gain extraplation into sticky price model with a lower bound, we show how lower natural rates give rise to monetary policy implications that differ substantially from the ones implied by rational housing price expectations.

Stock Prices Cycles and Business Cycles, with Sebastian Merkel, June 2019

We present a simple RBC model that jointly replicates the behavior of stock prices and business cycles. The model predicts that low interest rates make stock price boom-bust cycles more likely and that these cycles are triggered by a sequence of positive productivity surprises.