Research
Working Papers
"Giving Up": The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment (with Seung Hyeong Lee)
Abstract: Housing affordability has declined sharply in recent decades, leading many younger generations to give up on homeownership. Using a calibrated life-cycle model matched to U.S. data, we project that the cohort born in the 1990s will reach retirement with a homeownership rate roughly 9.6 percentage points lower than that of their parents' generation. The model also shows that as households' perceived probability of attaining homeownership falls, they systematically shift their behavior: they consume more relative to their wealth, reduce work effort, and take on riskier investments. We show empirically that renters with relatively low wealth exhibit the same patterns. These responses compound over the life cycle, producing substantially greater wealth dispersion between those who retain hope of homeownership and those who give up. We propose a targeted subsidy that lifts the largest number of young renters above the "giving-up threshold." This policy yields welfare gains that are 3.2 times those of a uniform transfer and 10.3 times those of a transfer targeted to the bottom 10% of the wealth distribution, while also increasing homeownership rate, raising work effort, and reducing reliance on the social safety net.
Conferences: FIRS 2026 PhD Session (Scheduled, Miami), Georgia Tech - Atlanta Fed Household Finance Conference PhD Poster Session (Atlanta)
Coverage: Bloomberg, Washington Post, Financial Times, Fortune 1, Fortune 2, The New York Times, Marginal Revolution, World Economic Forum, The Atlantic, Fox Business, Investopedia, Realtor.com, Macro Roundup, Le Figaro
When Cash Wakes Up: Inertia in Institutional Money Market Funds and the Effects of AI Disruption (with Ali Hortacsu)
Abstract: We study institutional cash management by constructing a novel dataset that records the specific money market funds (MMFs) held by each mutual fund in each month from 2010 to 2024. We document remarkably high inertia: more than half of mutual funds never switched their MMF over fourteen years, despite non-negligible yield dispersion. To decompose the sources of this inertia, we develop a two-stage structural model that separately identifies the determinants of portfolio managers' attentiveness ("waking up") and their conditional preferences once attentive. We estimate the model using a methodology that combines BLP-style contraction mapping with maximum likelihood. We establish three main findings. First, inattention shapes the industrial organization of the MMF market: funds that attract less attentive investors engage in greater liquidity transformation while offering lower yields, earning higher profits and exhibiting significantly greater survival rates especially during low interest rate periods. Second, our framework provides a new explanation for the well-documented "reaching for yield" phenomenon. We show that aggregate flows appear more yield-sensitive during low interest rate periods not because individual investors become more yield-seeking, but because a larger fraction of investors becomes attentive - a composition effect rather than a preference shift. Third, counterfactual analysis reveals a tension between market efficiency and financial stability as AI-driven automation reduces investor inattention: in the absence of inattention, fees fall by approximately half, yield dispersion collapses to near zero, and market concentration declines by roughly 20%, but monthly fund flows increase by about three times which heightens the risk of MMF runs.
Conferences: 14th Consumer Search and Switching Costs Workshop (Hong Kong)
Disagreement, Subjective Uncertainty, and the Stock Market (with Jingoo Kwon and Seung Hyeong Lee)
Abstract: We propose a new method to separately quantify investor disagreement and subjective uncertainty at the firm level using equity analyst forecasts. Our approach exploits heterogeneity in how forecast dispersion responds to the arrival of signals that are widely perceived as informative and interpreted homogeneously across agents. Intuitively, for a given level of disagreement in point forecasts, a larger post-signal compression in dispersion indicates greater ex-ante subjective uncertainty in investors’ beliefs. Using these measures, we document differences in the economic roles of disagreement and uncertainty. Subjective uncertainty rises sharply prior to crises, while disagreement peaks during and immediately after crises. In the cross-section, stocks with higher disagreement earn lower subsequent returns and exhibit higher trading volume. These effects are significantly attenuated when uncertainty is high. In contrast, higher uncertainty is associated with higher expected returns and lower trading volume. Stock return volatility is strongly related to disagreement but only weakly related to uncertainty. Finally, firm characteristics are more closely linked to disagreement than to uncertainty: Smaller firms, firms with lower profitability, and firms with higher R&D intensity exhibit systematically higher levels of disagreement.
Conferences: 3rd UIC Finance Conference (Scheduled, Chicago), FIRS 2025 PhD Session (Seoul), 2025 World Congress of the Econometric Society (Seoul), Yiran Fan Memorial Conference Poster Session (Chicago), 19th WashU Economics Graduate Student Conference (St. Louis)
Work in Progress
Households' Liquidity Management and Endogenous Sorting of Bank Depositor Types
Awards/Grants: Fama-Miller Center for Research in Finance Funding ($10,000), Kenneth C. Griffin Applied Economics Incubator Award ($10,000)
Youth Runs (with Luis Garicano)
Addiction Runs: Rank Competition and Strategic Complementarities in Prescription Stimulant Usage (with Chanwool Kim and Giyoung Kwon)
Awards/Grants: BFI Public Economics Initiative Award ($3,000)
Relying on Unregulated Firms to Achieve Public Health Goals: Evidence from Pharmacies in Kenya (with Michael Dinerstein, Anne Karing, and Emma Yan)
Retail Drugstore Closures and the Declining Drug-Retail Complementarity (with Chanwool Kim)
Awards/Grants: Kenneth C. Griffin Applied Economics Incubator Award ($12,000)
Package Sizes and Unequal Burden of Inflation (with Chanwool Kim and Youngeun Lee)
Housing Tenure as an Investment Decision: Evidence from Survey and Field Experiments (with Chanwool Kim)
Other Publications
Chicago Fed Letter, 464 (2021), 1-6.
Abstract: A half century after gold ceased to play a significant formal role in the international monetary system, it still captures a great deal of attention in the financial press and the popular imagination. Yet there has been very little scrutiny of the primary factors determining the price of gold since its dollar price was first allowed to vary freely in 1971. In this article, we attempt to fill in that gap by highlighting three considerations that are commonly cited as drivers of gold prices: inflationary expectations, real interest rates, and pessimism about future macroeconomic conditions.
Coverage: J.P. Morgan Center for Commodities
