Curriculum Vitae

Placement Director: Neil Wallace
    (814) 863-3805
     neilw@psu.edu

Contact Information:
Pidong Huang
Office: (814)
Phone: (814) 880-1166
Email: pzh110@psu.edu
Website: http://pidonghuang.weebly.com/

CITIZENSHIP:

• China (F-1 Visa)

EDUCATION:

• B.S.,Economics and Mathematics, Wuhan University 2005
• Ph.D., Economics, The Pennsylvania State University, expected June 2012

PH.D. THESIS:

• Essays in Monetary and Banking Theory
• Thesis Advisor:  Neil Wallace

FIELDS:

• Primary:  Macroeconomics
• Secondary: Dynamic contracts, Labor economics

PAPERS:

• “Why Ten $1's Are Not Treated as a $10?: The Instability of Non full-support Steady States in a Random Matching Model of Money” joint with Yoske Igarashi
• “Stability of monetary steady states in a matching model of money” joint with Yoske Igarashi
• “A comment on: "Efficient propagation of shocks and the optimal return on money"” joint with Yoske Igarashi (forthcoming, JET)
• “Suspension in a Global-Games version of the Diamond-Dybvig model”

TEACHING EXPERIENCE:

• Teaching Assistant, Fall 2006 – Spring 2010
• Course: Mathematical Economics, Mathematicle Economics (graduate), Monetary Economics, Introductory Macroeconomics

RESEARCH EXPERIENCE:

• Research Assistant, Prof. Neil Wallace, Spring 2011

PRESENTATIONS & OTHER PROFESSIONAL ACTIVITIES:

• Cornell-PSU macroeconomics conference Fall 2010, “Why Ten $1's Are Not Treated as a $10?: The Instability of Non full-support Steady States in a Random Matching Model of Money” joint with Yoske Igarashi
• Cornell-PSU macroeconomics conference Fall 2011, “Suspension in a Global-Games version of the Diamond-Dybvig model”

REFERENCES:

• Prof. Neil Wallace
• Prof. James Jordan
• Prof Alex Monge-Naranjo

THESIS ABSTRACT

The thesis consists of the following  three essays.

 [1] A comment on: ‘Efficient propagation of shocks and the optimal return on money’ (joint work with Yoske Igarashi)

This paper shows that introducing lotteries into Cavalcanti-Erosa (2008) eliminates two prominent features of their optima: over-production and history-dependence.

Cavalcanti-Erosa (2008) study optima in a version of Trejos-Wright (1995). They introduce into it i.i.d. aggregate shocks to preferences, shocks with a two-point support. They show that for an interval of intermediate magnitudes for the discount factor, the ex ante optimum over all individually rational (IR) and deterministic trades displays two properties: output is higher than the first-best when the shock is such that the first-best output is low and there is history dependence—that is, promised utilities play a role.

We show that if lotteries are allowed, then higher ex ante utility is achieved and neither property holds at an optimum. Moreover, the optimum can be supported by buyer take-it-or-leave-it offers.

[2] “Suspension in a Global-Games version of the Diamond-Dybvig model” (Job Market Paper)

This work builds on the model in Goldstein and Pauzner (GP) (2005), a global-games version of the Diamond-Dybvig (DD) (1983) model in which there is uncertainty about the long-run return and in which agents observe noisy signals about that return.

GP limited their investigation to a banking contract that makes a noncontingent promised payoff to those who withdraw early until the bank’s resources are exhausted. We amend the contract and permit suspension. There are two reasons to do this. First, suspension works perfectly in the no-aggregate-risk version of the DD model. (It uniquely implements the first-best outcome.) Because versions of GP are close to that model, it is plausible that suspension would also work well in such versions. Second, as I show, there is a class of suspension policies that gives rise to uniqueness without requiring the new assumption introduced in a proof in GP; namely, that the short-term return is also random.

    In general, both the GP policy and my generalization of it to allow suspension seem not to be best banking contracts in a model with return uncertainty and signals about it. Viewed as mechanisms, there is no attempt to elicit information about the signals that agents receive and to make payoffs to at least some depositors contingent on that information. However, if the return uncertainty is sufficiently small, then there are policies in the class I study that imply ex ante welfare  close to the first-best outcome in DD, which, itself, is an upper bound on welfare in the model with return uncertainty. Moreover, for one such policy, noisy signals are not necessary for uniqueness. In other words, the properties of the DD suspension policy are robust to the kind of uncertainty introduced by GP, provided it is small. The virtue of that uncertainty is that in a long sequence of .i.i.d. realizations of the model, all of the following four outcomes occur with positive probability: {good long-run return, poor long-run return}X{suspension not invoked, suspension invoked}. Put differently, the model with a small amount of GP uncertainty combined with a banking contract that permits suspension does well in terms of ex ante welfare and is able to account for a rich history of banking-system outcomes, including ones with banking-system difficulties.

[3] “Why ten $1’s are not treated as a $10?” (Joint work with Yoske Igarashi)

    As Zhu (2003) shows, the existence of his full-support steady state implies the existence of non-full-support steady states constructed as follows. Consider the full-support steady state in a given economy. Then consider a different economy where both the bound and the total stock of money are some integer L times as much, relative to the original economy. In this new economy, there is a non-full-support steady state where all the owned/traded units of money are also L times as much, but the quantity of production of goods remains unchanged. In other words, the difference between the original full-support steady state and the induced non-full-support steady state is nominal, although the difference between the two economic environments is not. Since the new economy has its own full-support steady state, there is multiplicity of steady states.

We show that the non-full-support steady states of the above kind are unstable. Specifically, it is shown that there is no equilibrium path with a constant payment rule that converges to these steady states if the initial distribution has a different support.