# Research

Modeling the Asymmetric Effects of an Oil Price Shock, with Benjamin Keen. This paper analyzes a New Keynesian (DSGE) model in the presence of downward nominal wage rigidity.

Oil Prices and the Macroeconomy, a chapter for the Handbook of Energy Economics I coauthored with Michael Plante.

Are There Price Asymmetries in the U.S. Beef Market? with Veronica Pozo and Ted Schroeder. Update: After many years, I’m happy to report that this paper has been accepted for publication at the Journal of Commodity Markets.

Oil Shocks and Stock Return Volatility, with Soheil Nadimi. This note (which it was prior to the peer review process) shows that the relationship between oil price volatility and stock return volatility has been sufficiently unstable to make it useless for forecasting stock return volatility.

Research Interests

I consider myself to be a macroeconomist. I am interested in the adjustment of aggregate variables such as GDP, inflation, and unemployment to large shocks. In recent years, that has mostly involved looking at the response of the economy to energy shocks. Part of that can be attributed to my childhood experiences. I grew up in a farming community affected by the high oil prices of the late 1970s/early 1980s, my father’s excavating business was heavily impacted by high fuel prices, and I lived for a while in Belfield, ND around the time that oil went from $30/barrel to$12/barrel. Models where firms pass increases in production costs on to consumers definitely did not describe what I saw.

My views on methodology have changed dramatically since grad school. In those days, I was a big fan of the VAR methodology, because it allowed one to study important issues without imposing too many assumptions. Although I wouldn’t describe myself as a fan of DSGE models, my views have evolved to prefer a more structural approach.

I used to do tax revenue forecasting for the state of Kansas and consulting for private companies. I found it to be quite satisfying to work on practical problems. As a result, I came to respect “applied” research. One of the things I like about Energy Economics is the greater openness to publishing applied work than you find in a typical economics journal.

I consider computation to be my strongest research skill.1 I can usually pick up new computational tools quickly. That might be another reason I feel more comfortable working on macroeconomic problems.

1. Note that “strongest” is relative to my other research skills. I’m not making claims about my skill relative to other economists, most of whom are better than me at everything.↩︎