Lingxuan "Sean" Wu
I am a PhD Candidate in Economics at Harvard University. My research interests are in macroeconomics, finance, and behavioral economics. I am on the 2024-25 academic job market.
Contact: lingxuanwu@g.harvard.edu
CV: here
Job Market Paper
Thinking about the Economy, Deep or Shallow? (with Pierfrancesco Mei).
Abstract: We propose a theory of shallow thinking to capture people’s limited understanding of the long causal chains involved in the propagation of macroeconomic shocks. We conceptualize general equilibrium as a system of causal relations in a directed graph, and our theory predicts that deeper relations—those further from shocks—have less influence on beliefs. Our estimation suggests that, on average, people understand about 2.6 steps of propagation. In a New Keynesian model with shallow thinking, (i) long-term nominal interest rates overreact to monetary policy shocks as agents underperceive a long offset loop, but underreact to cost-push shocks due to underappreciation of propagation; (ii) inflation expectations negatively predict bond excess returns, controlling for yields; (iii) cost-push shocks are more inflationary than under rational expectations, because agents better understand shallow amplifying relations than a deep offsetting one; and (iv) more persistent cost-push shocks lead to higher inflation, contrary to rational expectations. In a real business cycle model, in response to productivity shocks, (i) output displays a hump-shaped, more persistent response; (ii) investment, labor hours, and the stock price show amplified reactions; and (iii) the stock market first booms and then crashes.
Other Working Papers
A Theory of Land Finance and Investment-Led Growth. February 2024.
Monetary Transmission and Portfolio Rebalancing: A Cross-Sectional Approach (with Xu Lu). November 2023.
- Revise and Resubmit at Journal of Financial EconomicsMental Macro-Finance Models: Evidence and Theory. January 2023.
Network Lerner Index: Demand and Distortions across Industries. December 2022.
- Revise and Resubmit at Review of Economic StudiesPlatform Competition and Interoperability: The Net Fee Model (with Mehmet Ekmekci and Alexander White). September 2023.
- Revise and Resubmit at Management Science
Work in Progress
HANK Meets Tobin: Aggregate Demand with Inelastic Asset Markets (with Adrien Auclert, Matthew Rognlie, and Ludwig Straub).
- Presented at SED 2022
Teaching
Economic Theory (1st-year PhD macro, Econ 2010d), Harvard University, Spring 2022.
- TF for Profs. Adrien Bilal and Xavier Gabaix; evaluation: 4.88/5 [PDF]Macro-Finance: Rational and Behavioral (PhD field), Harvard University, Fall 2021.
- TF for Prof. Xavier Gabaix; evaluation: 5/5 [PDF]Economics of Online Platforms and the Sharing Economy (undergraduate), Tsinghua University, Spring 2019.
- TA for Prof. Alexander White