Spencer Lyon

Publications

In models with recursive preferences, endogenous variation in Pareto weights would be interpreted as wedges from the perspective of a frictionless model with additive preferences. We describe the behavior of the (relative) Pareto weight in a two-country world and explore its interaction with consumption and the real exchange rate.

Should a nation’s tax system become more progressive as it opens to trade? Does opening to trade change the benefits of a progressive tax system? We answer these question within a standard incomplete markets model with frictional labor markets and Ricardian trade. Consistent with empirical evidence, adverse shocks to comparative advantage lead to labor income loses for import-competition-exposed workers; with incomplete markets, these workers are imperfectly insured and experience welfare losses. A progressive tax system is valuable as it substitutes for imperfect insurance and redistributes the gains from trade. However, it also reduces the incentives to work and for labor to reallocate away from comparatively disadvantaged locations. We find that progressivity should increase with openness to trade and that progressivity is an important tool to mitigate the negative consequences of globalization.

Slides


Work in Progress

Demand Shocks, Learning, and Exporter Dynamics

with Nicholas Kozeniauskas

Draft coming soon

Quantifying the Losses from International Trade

with Michael Waugh

Draft coming soon

Slides

The Dolo Modeling Framework

with Pablo Winant

Draft coming soon

Slides

MATLAB, Python, Julia: What to Choose in Economics?

with Chase Coleman, Lilia Maliar, Serguei Maliar

Draft coming soon

Computational appendices: