Salient Themes in my Recent Research

From Imitation to Innovation: Where Is all that Chinese R&D Going? (published in Econometrica)
(with Michael Konig, Kjetil Storesletten, and Zheng Song)

We construct an endogenous growth model with random interactions where firms are subject to distortions. The TFP distribution evolves endogenously as firms seek to upgrade their technology over time either by innovating or by imitating other firms. We use the model to quantify the effects of misallocation on TFP growth in emerging economies. We structurally estimate the stationary state of the dynamic model targeting moments of the empirical distribution of R&D and TFP growth in China during the period 2007–12. The estimated model fits the Chinese data well. We compare the estimates with those obtained using data for Taiwan and perform counterfactuals to study the effect of alternative policies. R&D misallocation has a large effect on TFP growth.


Growing Like India: The Unequal Effects of Service-Led Growth (forthcoming in Econometrica)
(with Tianyu Fan and Michael Peters)

In many developing countries, structural transformation in recent years takes the form of a rapid rise of services with limited industrialization. Many such services are of a local nature and serve consumers (retail, restaurants, residential real estate, etc.). In this paper, we estimate the welfare effects of this pattern of development across the income ladder. We construct a spatial equilibrium model in which, over time, the expansion of consumer services is both a consequence (income effects) and a cause (productivity growth) of the development process. We estimate the model using Indian household data on sectoral employment and consumption expenditure. We find that productivity growth in non-tradable consumer services was an important driver of rising living standards, accounting for one-third of aggregate welfare gains. However, these gains were heavily skewed toward high-income households living in urban districts.