Fang Yang

Associate Professor, Department of Economics, Louisiana State University

 

Department of Economics

2322 Business Education Complex, Nicholson Extension
Baton Rouge, LA 70803

Email: fyang@lsu.edu

Office phone: 225-578-3803

 

Research Interests

 

         Macroeconomics, Public Finance, Labor Economics, Wealth Inequality, Savings, and Housing

 

 

Education

2006 Ph.D. (Economics), University of Minnesota-Twin Cities

2004 M.A. (Economics), University of Minnesota-Twin Cities

1999 M.A. (Economics), Peking University, China

1996 B.A. (Economics), Peking University, China

 

       

CV (pdf)

 

Research

Publications

1.   Consumption Over the Life Cycle: How Different is Housing? Review of Economic Dynamics 12(3): 423-443, 2009. Micro data over the life cycle show different patterns for consumption for housing and non-housing goods: The consumption profile of non-housing goods is hump-shaped, while the consumption profile for housing first increases monotonically and then flattens out. These patterns hold true at each consumption quartile. This paper develops a quantitative, dynamic, general equilibrium model of life-cycle behavior, that generates consumption profiles consistent with the observed data. Borrowing constraints are essential in explaining the accumulation of housing stock early in life, while transaction costs are crucial in generating the slow downsizing of the housing stock later in life.

2.  American Dream or American Obsession? The Economic Benefits and Costs of Homeownership, with Wenli Li, Business Review, Q3, 20-30, 2010

3.  Accounting for Gender Gap in College Attainment, with Suqin Ge, Economic Inquiry, Appendix 51(1), 2013, 478-499.

4.  Social Security Reform with Impure Intergenerational Altruism, Journal of Economic Dynamics and Control, 37 (2013), pp. 52-67.

5.  Consumption and Time Use over the Life Cycle, with Michael Dotsey and Wenli Li , International Economic Review, Vol. 55, No. 3, August 2014 pages 665–692. Online Appendix.                                                                                 Slides

 

6.  Bequests and Heterogeneity in Retirement Wealth , with Mariacristina De Nardi, European Economic Review, 2014, pp. 182-196.

 

7.  Home Production and Social Security Reform, with Michael Dotsey and Wenli Li, European Economic Review, 73, 2015, 131–150. Online Appendix.                                                                                                                                  Slides

 

8.  Skill-Biased Technical Change and the Cost of Higher Education, with John B. Jones, The Journal of Labor Economics, 2016, vol. 34, no. 3, 621-662.                                                                                                                                     Slides

9.  Wealth Inequality, Family Background, and Estate Taxation, with Mariacristina De Nardi, NBER WP #21047, Journal of Monetary Economics, 77 (2016), 130-145. Online Appendix,                                                                               Slides

10.   Is Relative Risk Aversion Time-varying? Evidence from Households' Portfolio Choice Data, with Xuan Liu and Zongwu Cai, accepted by Journal of Economic Dynamics and Control, 69(2016), 229–248

11.  Housing Over Time and Over the Life Cycle: A Structural Estimation, with Wenli Li, Haiyong Liu, and Rui Yao, International Economic Review, 57 (4), 2016, 1237–1260. Online Appendix.                                                          Slides

12.  Piketty’s Book and Macro Models of Wealth Inequality, with Mariacristina De Nardi and Giulio Fella. Chicago Fed Letter, 352, 2016

13.  The Aggregate Implications of Gender and Marriage, with Margherita Borella and Mariacristina De Nardi, NBER working paper 22817.  The Journal of the Economics of Ageing. Volume 11, May 2018, Pages 6-26                                    SlidesThis paper generates two main contributions. First, it provides a new theory of wealth inequality that merges two empirically relevant forces generating inequality: bequest motives and inheritance of ability across generations; and an earnings process that allows for more earnings risk for the richest. Second, it uses the resulting calibrated framework to study the effects of changing estate taxation. Increasing the estate tax reduces the wealth concentration in the hands of the richest few and the economic advantage of being born to a rich and super-rich family at the cost of reduced aggregate capital and output. However, all of these effects are quite small. In contrast, increasing estate taxation can generate a significant welfare gain to a newborn under the veil of ignorance, but this comes at a large welfare cost for the super-rich.

14.  Macro Models of Wealth Inequality, with Mariacristina De Nardi and Giulio Fella, in “After Piketty: The Agenda for Economics and Inequality,” Heather Boushey, Bradford DeLong, and Marshall Steinbaum, Editors, Harvard University Press. 2017. NBER WP #21730.

 

Working papers

15.   Financial Intermediation and Capital Reallocation, with Hengjie Ai and Kai Li. Online Appendix. Revise and Resubmit at Journal of Financial Economics.

[Abstract]: To understand the link between financial intermediation activities and the real economy, we build a general equilibrium model in which agency frictions in the financial sector affect the efficiency of capital reallocation across firms and generate aggregate economic fluctuations. We develop a recursive policy iteration approach to fully characterize the nonlinear equilibrium dynamics and the o_-steady-state crisis behavior. In our model, adverse shocks to agency frictions exacerbate capital misallocation and manifest themselves as variations in total factor productivity at the aggregate level. Our model endogenously generates countercyclical volatility in aggregate time-series and countercyclical dispersion of marginal product of capital and asset returns in the cross-section.

16.  The effects of marriage-related taxes and Social Security benefits, with Margherita Borella and Mariacristina De Nardi, NBER working paper #23972

[Abstract]: In the U.S., both taxes and old age Social Security benefits depend on one's marital status and tend to discourage the labor supply of the secondary earner.  We study the effects of eliminating these marriage-related provisions on the labor supply and savings of two different cohorts. To do so, we estimate a rich life-cycle model of couples and singles using the Method of Simulated Moments (MSM) on the 1945 and 1955 birth-year cohorts. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. We find that these marriage-related provisions reduce the participation of married women over their life cycle, the participation of married men after age 55, and the savings of couples. These effects are large for both the 1945 and 1955 cohorts, even though the latter had much higher labor market participation of married women to start with.

17.  The Lost Ones: the Opportunities and Outcomes of Non-College Educated Americans Born in the 1960s”, with Margherita Borella and Mariacristina De Nardi, NBER Working Paper No. 25661

[Abstract]: White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men's wages declined more than women's. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings but the increase in out-of-pocket medical expenses increased them by more. Welfare losses, measured a one-time asset compensation are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47-58% of these losses, shorter life expectancies 25-34%, and higher medical expenses account for the rest.

18.  Demographic Aging, Industrial Policy, and Chinese Economic Growth”, with Michael Dotsey and Wenli Li, Federal Reserve Bank of Philadelphia Working Paper No. 19-21

[Abstract]: We examine the role of demographics and changing industrial policies in accounting for the rapid rise in household savings and in per capita output growth in China since the mid-1970s. The demographic changes come from reductions in the fertility rate and increases in the life expectancy, while the industrial policies take many forms. These policies cause important structural changes; first benefiting private labor-intensive firms by incentivizing them to increase their share of employment, and later on benefiting capital-intensive firms resulting in an increasing share of capital devoted to heavy industries. We conduct our analysis in a general equilibrium economy that also features endogenous human capital investment. We calibrate the model to match key economic variables of the Chinese economy and show that demographic changes and industrial policies both contributed to increases in savings and output growth but with differing intensities and at different horizons. We further demonstrate the importance of endogenous human capital investment in accounting for the economic growth in China.

 

19.  Policy Reforms, Housing, and Wealth Inequality

20.  How do Households Portfolios Vary with Age?

 

Work in Progress

21.  Consumption and Hours between U.S. and France, with Lei Fang

22.  Financial Reform and Housing Prices, with Betty C. Daniel

23.  Labor Supply of Married Household: a Gender Specific Analysis, with Suqin Ge

24.  Limited Enforcement, Private Information, and Risk Sharing, with Hengjie Ai

 

 

Selected Media Post

For effective policy, economic models must include women, with Margherita Borella, Mariacristina De Nardi, and Sharada Dharmasankar, 07/12/17

 

Selected Press Coverage of Research

The Rent Isn't Too Damn High: Why it's good news that more Americans are renting rather than buying homes.

Macroeconomists Can't Keep Ignoring Race and Gender, July 27, 2017

 

Teaching (at LSU)  

Macroeconomics II (1st year PhD Core Course)

Graduate Advanced Topics in Macroeconomics  (2nd year PhD course)

Intermediate Macroeconomics

Money, Banking, and Macroeconomic Activity

 

Co-organizer of Mid-West Macroeconomic Meetings held at LSU May 17-19, 2017.

 

 

 

 

 

 

 

 

 

 

 

 

 

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