Curriculum Vitae

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

Contact Information:
Mouhua Liao
Office: (814) 867-3299
Home: (814) 441-5453
E-mail: mxl964@psu.edu     
Website: http://www.econ.psu.edu/~mxl964/index.htm

CITIZENSHIP:

• China, F1 Visa

EDUCATION:

• Ph.D., Economics, the Pennsylvania State University, June 2012 (expected)
• M.A., Economics, CCER, Peking University, June 2007
• B.S., Mathematics, Jinan University, June 2000
• B.A., Economics, Jinan University, June 1999

PH.D. THESIS:

•  Models of Strategic and Pairwise Trade
• Thesis Advisor:  Neil Wallace

FIELDS:

• Primary:  Macroeconomics, Monetary Economics
• Secondary:  Labor Economics, Economic Growth

PAPERS:

• A Market Game With Symmetric Limit Orders, (Job Market Paper)
• Alternative Trading Schemes in the  Lagos-Rocheteau Model
• Middlemen in Investment

• China Economic Research Award, CCER, Peking University, 2005.
• Excellent Student Award, Peking University
• Outstanding Graduate Student Award, Jinan University, 1999.
• First Class Award, Jinan University, 1995-1998.

TEACHING EXPERIENCE:

• Instructor, Import Export Business, undergraduate level, Fall 2000.
• Instructor, Principles of Economics, undergraduate level, Spring 2001.
• TA, Mathematic Economics, graduate level, Fall 2008.
• TA, Introductory Microeconomics, undergraduate level, Spring 2009.
• TA, Mathematical Economics, undergraduate level, Fall 2010.
• TA, Intermediate Macroeconomics, undergraduate level, Spring 2011.
• TA, Introductory Macroeconomics, undergraduate level, Fall 2011.

RESEARCH EXPERIENCE:

• Research Assistant, Professor Neil Wallace, Summer of 2009-2011.
• Research Assistant, Professor Manolis Galenianos, Fall 2009-Spring 2010.

PRESENTATIONS & OTHER PROFESSIONAL ACTIVITIES:

• CCER Second Development Economics Seminar, Peking University, July, 2005.
• China Center for Economic Research (CCER), Peking University, China, June, 2010.

REFERENCES:

• Neil Wallace, Economics Department, Pennsylvania State University, 814-863-3805
• Edward Green, Economics Department, Pennsylvania State University, Phone:  On Leave
• James Jordan, Economics Department, Pennsylvania State University, 814-865-2201

THESIS ABSTRACT

Thesis Title: Models of Strategic and Pairwise Trade

1. A Market Game with Symmetric Limit Orders (Job Market Paper)

A new type of market game is formulated: the strategy space generalizes the usual Cournot quantities with limit prices. In an economy with one good and a numeraire, an agent who wants to sell the good specifies the maximum amount of the good to be sold if the price is not less than that named. An agent who wants to buy specifies the maximum expenditure on the good if the price is not higher than that named. These are called symmetric limit orders because if the roles of the good and the numeraire are reversed, the model has the same outcome. Earlier models of limit orders do not nest the Cournot model, are not symmetric in the above sense, and do not determine a unique price for arbitrary strategies.

We find that, under mild market-thickness conditions, symmetric Nash equilibria coincide with price-taking equilibria. In the case of two goods, a price-taking equilibrium is a Walrasian equilibrium. In the case of multiple goods, a price-taking equilibrium is competitive, but subject to a cash-in-advance constraint. There are two market-thickness conditions: one is the Dubey-Shubik refinement which eliminates no-trade as an equilibrium; the other is that there are at least two agents of each type.

2. An Alternative Trading Scheme in the Lagos-Rocheteau Model

Lagos-Rocheteau (Econometrica, 2009) studies how search friction affects the distribution of asset holdings of investors. Given their other assumptions---no asymmetric information, uniform assets, quid pro quo trade, and quasi-linear preferences so that there is never a need to finance trade---the Lagos-Rocheteau search friction can only be interpreted as an assumption about communication costs: dealers communicate continuously with each other (in a competitive market), while investors never communicate with each other and meet dealers pairwise and at random.  In a meeting between an investor and a dealer, a Nash bargain determines the dealer’s payoff.

Our trading scheme is based on alternative assumptions about communication costs: there are no dealers and investors communicate freely with each other (no search friction), but only in a market which operates periodically. The market is modeled as a set of Cournot or Shapley-Shubik trading posts. The main tension in their paper--- the misallocation between preference type and asset holding caused by the delay of trade--- remains in our scheme.

We calibrate the model and ask how frequently our investor market must operate in order that investors are as well off as in the Lagos-Rocheteau model. If there is one dealer per 100 investors in their model, which implies that an investor meets a dealer once every 10 days on average, then our investors would be as well off if their market meets once every 26.5 days. The much lower trade frequency is offset by the absence of trading costs.

3. Middlemen in Investment

This paper presents a simple model of the role of middlemen in an investment process with search frictions. There are three types of agents in the model: consumers, investors, and middlemen (bankers) and there is free entry for investors and bankers. Each type of agent matches pairwise with the other two types through two independent matching processes. Each process depends on the ratio of the agent’s own type to the opposite type in the match (or market tightness). Each consumer has one unit of asset, which can be invested directly with an investor or indirectly through a banker, who then has to meet an investor to finish the process.

It is shown that there is a unique steady state equilibrium in which bankers are active. The presence of bankers enhances the welfare of consumers. More generally, the welfare of consumers decreases as the outside option of bankers or investors increases. When investment projects are heterogeneous in return, investments undertaken through bankers have a higher average return than ones done directly.