Alex Oktay
Fields: Macroeconomics, Econometrics
Research statement: I am committed to developing and applying new econometric methods to causally understand macroeconomic policies and their transmission. I am particularly interested in monetary policy, production networks, and exchange rates. I have also worked on applying new econometric tools to topics linked to crime and gun policies during my predoc.
Working papers
NBER Working Paper
With John J. Donohue, Amy L. Zhang, Matthew Benavides
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Abstract: We study the opposing deterrent and enabling effects of guns carried by law-abiding citizens on violent crime, using the location of shooting ranges as an instrument. Our incident-level data based on admittedly imperfect data from the Gun Violence Archive suggests that defensive gun use (DGU) by crime victims may decrease the probability of their injury or death, while increasing the risk of death or injury by the criminal suspects. However, in the aggregate, higher numbers of defensive gun uses—which proxies for more gun carrying and use—are associated with higher numbers of violent crimes, injuries, and fatalities among victims and suspects alike. We hypothesize that this equilibrium effect arises because more guns being carried and used by citizens produce more incentive and opportunities for criminals to acquire guns, leading to a commensurate increase in the incidence and lethality of crime. In summary, our analysis supports the conclusion that the widespread carrying and use of guns is overall more likely to enable violent crimes than to deter them.
Policy impact: RAND Guns in America research review
Media coverage: The New York Times
Abstract: We find that the response of stock prices to the exchange rate reflects a currency denomination effect—that is, a change in the relative international value of firms’ cash flows and equity—rather than a change in domestic economic conditions. To do so, we compute exogenous movements for the Swiss franc on SNB announcement days and trace their effects on Swiss stocks. Exploiting firm heterogeneity reveals that the prices of stocks with foreign-denominated cash flows are considerably more sensitive to the exchange rate. Using the staggered introduction of American Depositary Receipts in Switzerland, we provide causal evidence that cross-listing markedly amplifies the sensitivity of domestic stock prices to exchange rate fluctuations, consistent with the law of one price. Stock market movements that follow central bank announcements should therefore be interpreted with caution because they partially reflect parity movements and not only economic information.
NBER Working Paper
With John J. Donohue, Amy L. Zhang, Matthew Benavides
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Abstract: The 2022 Supreme Court case NYSRPA v. Bruen struck down states’ discretion in issuing individuals firearm right-to-carry permits. As the country transitions towards more and more permissive concealed carry regulation, it has remained unclear how permitting processes and requirements affect personal and public safety. Leveraging a novel dataset of state laws spanning 2000- 2022, we find that more stringent concealed carry requirements, such as higher fees or more training hours, do not deter gun owners from obtaining carrying licenses, nor do they alter their behavior substantially enough to impact public safety outcomes including violent crimes, gun theft, or accidental shootings. As such, stricter training requirements are unable to counteract the effects of more permissive concealed carry issuance.
Publications
Swiss Journal of Economics and Statistics (2022)
Paper > Replication package >
Abstract: This paper analyzes the exchange rate pass-through to consumer prices for 85 categories of goods and services in Switzerland. The pass-through estimates are computed using a synthetic difference-in-differences approach that exploits the large Swiss franc appreciation that followed the unexpected removal of the Swiss franc-Euro floor in January 2015. The overall 1-year all-items pass-through is 0.12, which shows that the pass-through is highly incomplete. There is an important heterogeneity across product categories, where pass-through can be as high as 0.80. These variations are linked to the international trade characteristics of the products, as the prices of goods with a high degree of international tradability, with a high import share, or that depend on tourism are shown to be more sensitive to the exchange rate.
Policy impact: These results were used in a discussion between the Swiss parliament and the Swiss federal council (interpellation 23.3123), and the methodology will be used by the Swiss department of economic affairs (SECO) to evaluate a future tariff change (experts report).
Unpublished papers
Master thesis
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Abstract: This paper proposes a theoretical framework to study the interest rate channel and asset price channel of monetary transmission in a multisector RBC setting. The model highlights how money supply shocks propagate through trade in the production and investment networks, both upstream due to household wealth effects and the cash-in-advance assumption, and downstream due to the interest rate channel and Tobin’s Q channel. In both cases, input-output linkages in the intersectoral trade of materials and capital are critical for the propagation of monetary shocks. An application to the 2005-2018 US input-output tables estimates that 52%-59% of the total effect of money supply shocks on production can be attributed to network effects. Most of this result is due to material linkages, with capital linkages representing approximately one-fifth of the effects. Downstream propagation is estimated to be almost 2.6 times bigger than upstream propagation.
Bachelor thesis
With Mann Tchi Dang and Quentin Misenta
Paper > Replication package >
Abstract: This paper forecasts the evolution of consumption, stock market, unemployment, electricity, mobility, bankruptcies, air pollution, and GDP growth for the end of the COVID-19 crisis in Switzerland. Predictions are created using two high-frequency models: a Vector Autoregression with Exogenous variables (VAR-X) and Long-term Short-term Memory neural network (LSTM). The results suggest that a strong and swift economic recovery is possible but relies heavily on the evolution of political restrictions and number of COVID-19 cases. Consumer behavior could go back to pre-pandemic levels in a 3-months time period given a significant decrease of COVID-19. The number of bankruptcies is expected to increase in this scenario, together with an economic growth of 2.8% with respect to 2019. We find no systematic evidence of an impact of COVID-19 on electricity consumption and NO2 levels
Award: Best bachelor thesis of the faculty of Business and Economics (Research Data Challenge 1st prize)
Undergraduate term paper in Macroeconomics
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Abstract: This paper presents an introductory long-term analysis and modelling of the implementation of Universal Basic Income using a modified Solow-Swan growth model with an extension on the labour and capital markets. It concludes that, given the right policy implementation, basic income could induce a long-term rise of the steady state equilibrium for production per capita and wages through an increase in demand and consumption, while also improving the long-term growth rate by supporting entrepreneurship and thus enhancing technological development. However, these positive aspects largely depend on the tax collection method and stickiness of high-incomes and large corporations to the domestic country, making the policy promising but unreliable without further analysis.