Job Market Paper
The Interest Rate Elasticity of Investment: Micro Estimates and Macro Implications
I estimate the elasticity of investment to interest rates using cross-sectional variation and high-frequency monetary shocks.
My estimates imply that a 1 p.p. decrease in interest rates increases capital demand by 4% eight quarters after the shock.
This indicates a significant effect of interest rates on investment but is much smaller than prominent estimates of the interest rate elasticity
derived from the investment response to tax policy changes. In a quantitative model with heterogeneous firms, I show that the impulse response I
estimate provides a powerful tool to discriminate between models with different frictions. The evidence favors models with external financing constraints,
while models with large real adjustment costs cannot match evidence from both interest rate and tax policy shocks.
Working Papers
The Incidence and Efficiency of Land Value Taxation
(with Ulf Nielsson and Anders Yding)
Land value taxes are often seen as particularly desirable because the fixed supply of land implies no efficiency loss from taxation,
with the entire tax burden falling on current landowners. We study the incidence and efficiency of land taxes using a unique quasi-experiment
that generated persistent variation in land tax rates across Danish municipalities. In contrast to the predictions of standard, neoclassical
models, we estimate a precise zero effect of land taxes on residential home prices. The precision of our estimates allows us to confidently rule
out full capitalization of taxes into home prices using leading estimates of housing discount rates. Our results imply that the burden of land taxes
is shared with tenants and future purchasers. We also estimate null effects of land taxes on measures of housing development, mobility, and homeownership,
though we do find that older homeowners sort away from high tax areas. Our results are consistent with limited efficiency costs of land value taxation
but imply that land taxes are more regressive in our setting than predicted by standard models.
From Pensions to Personnel: The Incentive Effects of Retirement Reform on Retention
(with Kristy Kim)
Private retirement plans are a crucial part of worker’s compensation in the U.S. and have long been thought to influence labor supply.
This study uses a cohort-based regression discontinuity design to examine how a change in the retirement plan at the largest U.S. employer,
the Federal Government, impacted the retention of employees over the entire life cycle. We find that workers with less valuable employer
pensions but more portable retirement benefits were more likely to separate from the government around 15 and 30 years after beginning federal
service. We find smaller, statistically insignificant effects in the first few years of employment. We also find evidence that the effects are driven
by highly productive workers, identified through supplemental compensation or early promotions. Our results suggest that employees respond to changes
in the value of retirement benefits by leaving employers for better outside options, but that employees may be inattentive or job-locked early in their
careers. These findings demonstrate that non-wage compensation impacts labor supply decisions across a worker's lifecycle and the distribution of human
capital over time, particularly in labor markets where employers compete through diverse compensation structures.
Publications
Home Country Interest Rates and International Investment in U.S. Bonds
(with John Ammer, Stijn Claessens, and Alexandra Tabova),
Journal of International Money and Finance, 2019, (95): 212-227.
Resting Papers
Searching for Yield Abroad: Risk-Taking Through Foreign Investment in U.S. Bonds
(with John Ammer, Stijn Claessens, and Alexandra Tabova), February 2019
Policy Notes
"Low-for-Long" Interest Rates and Portfolio Shifts in Advanced Foreign Economies
(with John Ammer and Alexandra Tabova), December 2016
