Faculty & Research

Joseph S. Vavra

Assistant Professor of Economics

Phone :
1-773-834-0959
Address :
5807 South Woodlawn Avenue
Chicago, IL 60637

Joseph Vavra, Assistant Professor of Economics, studies macroeconomics and monetary economics, labor, and computational economics. In his recent research he argues that monetary policy is less effective during volatile recessions. He also has work studying how durable consumption responds to stimulus, and how prices respond to exchange rate movements.

Vavra holds multiple degrees (Ph.D., M.Phil., M.A.) all in economics from Yale University. Additionally, he earned a B.A. (magna cum laude) in math, mathematical economic analysis, and statistics from Rice University.

In addition to Vavra’s teaching fellow and research assistant positions, he has experience working as an intern at the White House Council of Economic Advisors. His interests outside of economics include scuba diving, food, and travel.

 

2015 - 2016 Course Schedule

Number Name Quarter
33040 Macroeconomics 2016 (Winter)
33650 Workshop in Macro and International Economics 2016 (Spring)
33949 Applied Macroeconomics: Heterogeneity and Macro 2016 (Spring)

Other Interests

Food, scuba diving, snowboarding

 

Research Activities

My research interests are in empirical macroeconomics, business cycles and monetary policy, with a particular focus on the implications of microdata for aggregate phenomenon and on whether the same policies may have different effects if engaged during different phases of the business cycle.

REVISION: Regional Redistribution Through the U.S. Mortgage Market
Date Posted: Mar  01, 2016
Regional shocks are an important feature of the U.S. economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the U.S., most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSEs). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk, and we postulate that the lack of regional variation in GSE mortgage rates is likely driven by political pressure. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions.

New: House Prices, Local Demand, and Retail Prices
Date Posted: Dec  21, 2015
We use detailed micro data to document a causal response of local retail price to changes in house prices, with elasticities of 15%-20% across housing booms and busts. Notably, these price responses are largest in zip codes with many homeowners, and non-existent in zip codes with mostly renters. We provide evidence that these retail price responses are driven by changes in markups rather than by changes in local costs. We then argue that markups rise with house prices, particularly in high homeownership locations, because greater housing wealth reduces homeowners’ demand elasticity, and firms raise markups in response. Consistent with this explanation, shopping data confirms that house price changes have opposite effects on the price sensitivity of homeowners and renters. Our evidence has implications for monetary, labor, and urban economics, and suggests a new source of markup variation in business cycle models.

REVISION: House Prices, Local Demand, and Retail Prices
Date Posted: Aug  25, 2015
We use detailed micro data to document a causal response of local retail price to changes in house prices, with elasticities of 15%-20% across housing booms and busts. Notably, these price responses are largest in zip codes with many homeowners, and non-existent in zip codes with mostly renters. We provide evidence that these retail price responses are driven by changes in markups rather than by changes in local costs. We then argue that markups rise with house prices, particularly in high homeownership locations, because greater housing wealth reduces homeowners’ demand elasticity, and firms raise markups in response. Consistent with this explanation, shopping data confirms that house price changes have opposite effects on the price sensitivity of homeowners and renters. Our evidence has implications for monetary, labor, and urban economics, and suggests a new source of markup variation in business cycle models.

New: Regional Heterogeneity and Monetary Policy
Date Posted: Jun  19, 2015
We study the implications of regional heterogeneity within a currency union for monetary policy. We ask, first, does monetary policy mitigate or exacerbate ex-post regional dispersion over the business cycle? And second, does ex-ante regional heterogeneity increase or dampen the aggregate effects of a given monetary policy? To help answer these questions, we use detailed U.S. micro data to explore the extent to which mortgage activity differed across local areas in response to the first round of Quantitative Easing (QE1), announced in November 2008. We document that QE1 increased both mortgage activity and real spending but that its effects were smaller in parts of the country with the largest employment declines. This heterogeneous regional effect is driven by the fact that collateral values were most depressed in the regions with the largest employment declines, reducing the extent to which borrowers were able to benefit from rate decreases. We explore the implications of our ...