My research focuses on macroeconomic issues including housing markets, migration policies, and labor market dynamics.
Abstract: How does intermediation in the housing market affect an economy's house price distribution, trade volume, and welfare? I study flipping houses—fast buying and reselling houses, which has become more prevalent in recent years. While more flipping increases market thickness, it also involves intermediaries holding housing assets instead of households. Which effect dominates for welfare? To answer these questions, I develop a decentralized trade model with intermediaries with two-sided heterogeneity in inventory and housing asset valuation, where households trade houses with each other or with flippers. Search is random, information is asymmetric, and household valuations evolve stochastically. Using a universe of administrative transaction data from Ireland, I document a steady increase in house prices, trade volume, and flipped transactions between 2012 and 2022. In particular, I find that the number of flipped transactions doubled. Through a calibrated model, I use an increase in the mass of flippers to cause an increase in flipping. This increase in flipping led to a 1.5% decrease in average house prices, implying the increase in house prices seen in the data was not caused by flippers but instead by the decrease in mortgage rates. The increase in flipping in the model caused a modest increase in trade volume as compared to the data. Finally, I find the increase in flipping caused an average decrease in household welfare of 0.2%, chiefly by decreasing the steady state fraction of households owning a home. On the positive side, misallocation of housing due to search frictions decreased.
Abstract: Should we tax or subsidize migration to more productive but overcrowded cities? This paper investigates the efficiency of the Rosen-Roback model in a spatial equilibrium context with inelastic housing supply, with a significant externality in housing markets. As workers move to the most productive cities to capitalize on higher wages, they inadvertently raise housing prices, imposing congestion costs on all residents. his negative externality leads to an inefficient allocation of labor, with too many workers concentrated in high-productivity, high-cost areas. We explore the optimal policy response and find that taxing labor in these congested cities and redistributing workers can improve overall welfare. Specifically, the optimal labor tax increases welfare by 0.1%. Our calibrated model shows that correcting the externality raises housing consumption by 2.6% while reducing goods consumption and output by 1.2%, emphasizing the trade-offs between migration-driven economic gains and the cost of higher housing prices.
Further details on my research are available upon request.