Yu-Ting Chiang

I am an economist at the Federal Reserve Bank of St. Louis.

My research studies how information and financial frictions affect macroeconomic dynamics and policies.

I received my Ph.D. from the Department of Economics and Booth School of Business at the University of Chicago in 2021.

You can contact me at yu-ting.chiang@stls.frb.org

Working papers

Abstract: We derive sufficient statistics to describe how the financial sector affects aggregate responses to macroeconomic policies. Our framework features heterogeneous and illiquid households and nests financial intermediation with various microfoundations. Relevant features of the financial sector are summarized by its liquidity supply elasticities. These elasticities can be linked directly to data and are quantitatively important for debates over the effectiveness of policies targeting the financial sector vs. households. Among workhorse models, output responses differ by orders of magnitude due to implicit assumptions about these elasticities. Our estimates for the U.S. imply a stronger effect targeting households than the financial sector.

Abstract: This paper shows that macroeconomic uncertainty during recessions can arise from people paying more attention to aggregate events. When information is dispersed, people’s attempts to acquire more information can lead to higher aggregate volatility, forecast dispersion, and uncertainty about aggregate output. Information rigidity is reduced, consistent with evidence in forecast surveys and in contrast to the prediction of exogenous volatility shocks. When the model is calibrated to U.S. data, endogenous attention accounts for half of the observed fluctuations in volatility, forecast dispersion, and uncertainty. This paper also provides a method to solve dispersed information models with varying attention and uncertainty.

Abstract:     We document a liquidity channel through which unexpected inflation generates welfare losses. Household balance sheets are nominal maturity mismatched: nominal liabilities have a longer duration than nominal assets. Due to the mismatch, losses from unexpected inflation are concentrated over short time horizons, while gains are spread out over the longer-run. When households are liquidity-constrained, this mismatch leads to large welfare losses that exceed in magnitude the commonly discussed effects of inflation on wealth due to households' net nominal position. We quantify the importance of the liquidity channel and show that, for households in the lower half of the wealth distribution, the recent 2021--2022 unexpected inflation shock caused welfare losses ranging from 0.3\% to  0.8\% of their lifetime wealth, with more than 75\% of that loss due to illiquidity.