pzoch

Piotr
Żoch

Piotr received his PhD in Economics from the University of Chicago in 2020 and joined GRAPE to work on inequality.  His main research interests are macroeconomics and monetary economics, in particular macroeconomics with heterogeneous agents, sovereign default and macroeconomic theory.

Personal website: pzoch.com





Opublikowane | Published

  • Some unpleasant markup arithmetic: Production function elasticities and their estimation from production data | Journal of Monetary Economics

    The ratio estimator of the markup is the ratio of the output elasticity for a flexible input to that input’s cost share in total revenue. We highlight identification and estimation issues pertaining to this ratio estimator, when firm-level output prices are not observed. If the revenue elasticity for a flexible input is used in place of the output elasticity, then profit maximization implies that the ratio estimator is identically equal to one, and thus is uninformative about markups. Concerning estimation of output elasticities: with only revenue data, profit maximization also implies that the output elasticity is not identified non-parametrically from estimation of the revenue production function, if firms have market power. Even with separate output price and quantity data, it is challenging to estimate the output elasticity consistently if there are non-linear productivity dynamics and firms face heterogeneous demand schedules, with unobserved variation in a demand shifter.

    Piotr
    Żoch
  • Some unpleasant markup arithmetic: Production function elasticities and their estimation from production data | Journal of Monetary Economics

    The ratio estimator of a firm's markup is the ratio of the output elasticity of a variable input to that input's cost share in revenue. This note raises issues that concern identification and estimation of markups using the ratio estimator. Concerning identification: (i) if the revenue elasticity is used in place of the output elasticity, then the estimand underlying the ratio estimator does not contain any information about the markup; (ii) if any part of the input bundle is either used to influence demand, or is neither fully fixed nor fully flexible, then the estimand underlying the ratio estimator is not equal to the markup. Concerning estimation: (i) even with data on output quantities, it is challenging to obtain consistent estimates of output elasticities when firms have market power; (ii) without data on output quantities, as is typically the case, it is not possible to obtain consistent estimates of output elasticities when firms have market power and markups are heterogeneous. These issues cast doubt over whether anything useful can be learned about heterogeneity or trends in markups, from recent attempts to apply the ratio estimator in settings without output quantity data.

    Piotr
    Żoch
  • Macroprudential and monetary policy rules in a model with collateral constraints | Gospodarka Narodowa

    We compare welfare and macroeconomic effects of monetary policy and macroprudential policy, in particular targeting loan-to-value (LTV) ratios. We develop a DSGE model with collateral constraints and two types of agents. In this setup, we study seven potential policy rules responding to credit growth and fluctuations in prices of collateral. We show that monetary policy responding to deviations of collateral prices from their steady state value results in the highest level of social welfare. It is also useful in stabilizing output and inflation. Macroprudential policy using LTV ratio as the instrument is dominated in terms of output and inflation stability by the interest rate rules. If interest rate rules are not available, the LTV ratio can be used to improve welfare, but gains are small.

    Piotr
    Żoch

W toku | Work in progress

  • Markups, labor market inequality and the nature of work

    We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess the impact of changes in markups on the overall labor share and on labor income inequality across occupations. We identify the production and expansionary content of different occupations from the co-movement of occupational income shares with markup-induced changes in the labor share. We find that around one-fifth of US labor income compensates expansionary activities, and that occupations with larger expansionary content have experienced the fastest wage and employment growth since 1980. Our framework can rationalize a counter-cyclical labor share in the presence of sticky prices and can be used to study the distributional effects of demand shocks, monetary policy and secular changes in competition.

    Piotr
    Żoch