Welcome

2015-12-BW

I am a Ph.D. candidate in Economics at University of Copenhagen (expected graduation Fall 2016).

My research interests are Empirical Macroeconomics, Household Finance and Applied Econometrics.

Please see my Resume for contact information.

 Working Papers

Precautionary Borrowing and the Credit Card Debt Puzzle, with Jeppe Druedahl. (Revise & resubmit at Quantitative Economics) Revised version
This paper addresses the credit card debt puzzle using a generalization of the buffer-stock consumption model with long-term revolving debt contracts. Closely resembling actual US credit card law, we assume that card issuers can always deny their cardholders access to new debt, but that they cannot demand immediate repayment of the outstanding balance. Hereby, current debt can potentially soften a household’s borrowing constraint in future periods and thus provides extra liquidity. We show that for some intermediate values of financial net worth it is indeed optimal for households to simultaneously hold positive gross debt and positive gross assets even though the interest rate on the debt is much higher than the return rate on the assets. Including a risk of being excluded from new borrowing which is positively correlated with unemployment, we are able to simultaneously explain a substantial share of the observed borrower-saver group and match a high level of liquid net worth.

Expenditure Switching and Welfare Implications, with Leslie Sheng Shen. (Paper Coming)
This paper quantifies and evaluates the quality vs. quantity channel of consumption reallocation in the presence of macroeconomic shocks. Using detailed micro-level panel data on household expenditures, we show that there exists significant heterogeneity in the degree of reallocation at the two margins across income groups: the high-income households tend to adjust their consumption at the quality channel when facing negative shocks, while the low-income households are more likely to adjust at the quantity margin. Our results suggest the poor may be rationed in their margins of consumption re-allocations when hit by a negative shock and thereby bear a disproportionately greater share of the cost of business cycle fluctuations. We develop a model in which households have non-homothetic preferences and value both the quality and quantity of purchased products.  Using the model, we estimate structural parameters that are consistent with the patterns of consumption behavior observed in the data and analyze the welfare implications of business cycles fluctuations.

Marginal Propensity to Consume During a Recession: New Theory and Evidence from Denmark, with Andreas Kuchler. (Paper Coming).
We provide a novel way of estimating marginal propensities to consume (MPC). Our proposed method complements existing methods by relaxing a number of strong requirements on the part of the theory. Specifically, we show that a local polynomial regression of consumption on income and assets yields a surprisingly precise estimate of the MPC at the household-level using only cross-sectional data. As a trade-off on the part of the regression theory, the proposed method is somewhat data intensive and requires stronger belief in the underlying economic modeling.
We use our proposed method to estimate the marginal propensity to consume for each household in Denmark, using detailed tax records on income and wealth. We then use household-level estimated MPCs to discuss aggregate effects of various policy experiments.

When to Update Your Price? Evidence from San Francisco Rental Market. (Preliminary)
I show that price setting on the housing market is driven by a few key price setters. I collect a novel dataset on daily supply and prices of the San Francisco Bay Area rental housing market.I document the price setting behaviour of individual landlords over time and identify the keys players driving the overall price movement; i.e. which landlords are the first to increase their price above the current level, and when do other landlords follow these key players.