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Jinyoung Seo
Assistant Professor of Economics Wake Forest University Email: seoj@wfu I am an Assistant Professor of Economics at Wake Forest University. My research interests are in monetary economics and macro-finance. I am especially interested in the interaction between macroeconomy and financial markets, and the transmission of macroeconomic stabilization policies. Research interest
[Curriculum Vitae] |
Working Papers
The Determinants of Bond-Stock Correlation: the Role of Trend Inflation and Monetary Policy [paper]
Abstract I show that Treasuries' role as hedge assets is determined by the level of trend inflation and the conduct of monetary policy, using a Generalized New Keynesian habit model. A novel prediction from the model is that when trend inflation is high, nominal bonds exhibit a positive correlation with stock returns, making them risky assets. As trend inflation rises, inflation becomes more countercyclical because any transitory inflation generates temporary output loss due to endogenous cost-push effects, which emerge under positive trend inflation. When countercyclical inflation prevails, bond returns drop when stocks underperform, leading to a positive bond-stock correlation. The model explains the shift in US bond-stock correlation from positive to negative in 1997 as a consequence of stabilized trend inflation.
Optimal Unconventional Monetary Policy and Trend Inflation [paper]
Abstract I study optimal unconventional monetary policy in a New Keynesian model with trend inflation. A standard New Keynesian model is extended to feature heterogeneous households, financial intermediaries, and unconventional monetary policy. By optimally designing both conventional and unconventional policy, a central bank can completely stabilize both the output gap and inflation, and restore a divine coincidence despite the endogenous cost-push wedges from trend inflation, which is not possible with only one policy tool. Furthermore, optimal unconventional monetary policy at the ZLB highlights the importance of aligning long-run inflation target with policy makers’ objectives between stabilizing output gap and inflation because of the policy trade-offs.
Monetary Policy through Wholesale Funding Markets: the Bank Lending Channel Revisited [paper]
Abstract This paper shows that the bank lending channel operates primarily through banks’ access to wholesale funding markets. I exploit bank organizational structure to identify how funding constraints shape lending responses to monetary policy. I find that banks affiliated with multibank holding companies maintain lending following monetary tightening through better wholesale funding access, while standalone banks significantly contract lending due to funding outflows. The wholesale funding channel has important aggregate implications: states with higher standalone bank share experience larger responses of GDP and unemployment to monetary policy. Moreover, standalone banks exhibit heightened failure probabilities after monetary tightening, contributing to elevated levels of systemic bank risk as measured by the bank-at-risk (BaR). These findings reveal a novel link between monetary policy and financial stability through banks’ funding composition.
Monetary Policy and Financial Stability
with Nicolas Caramp (UC Davis), Andrés Sarto (NYU) and Dejanir Silva (Purdue)
Work-in-Progress
Optimal Monetary Policy and Financial Stability: The Role of Floating-Rate Loans
with Ali Uppal (Imperial College London)
Publication
- Did Capital Replace Labor? New Evidence from Offshoring
with Paul Moon Sub Choi and Kee Beom Kim.
The B.E. Journal of Macroeconomics. Volume 19(1):1-22, January 2019.
Teaching
Instructor, Wake Forest
- Intermediate Macroeconomics
Teaching Assistant, UC Davis
- Microeconomic Theory (core Ph.D course)
- Computational Methods (Ph.D course)
- Principles of Microeconomics
- Intermediate Microeconomics
- Intermediate Macroeconomics
- Money and Banking
- Financial Economics
- Econometrics
- Development Economics
