Emi Nakamura
http://www.people.fas.harvard.edu/~nakamura/
nakamura@fas.harvard.edu
HARVARD UNIVERSITY
Placement Director: Claudia Goldin
Graduate Student Coordinator: Nicole Tateosian
CGOLDIN@HARVARD.EDU
NATATEOS@FAS.HARVARD.EDU
617-495-3934
617-495-8927
Home Contact Information
1 Langdon St. #32
Cambridge, MA 02138
Office Contact Information
Department of Economics
Harvard University
Littauer Center
Cambridge, MA 02138
Home: 617 492 4530
Cell: 857 919 3677
Personal Information: US and Canadian citizen
Undergraduate Studies:
AB, Economics, Princeton University, Summa Cum Laude, 2001.
Best Thesis Award in Applied and Computational Mathematics Program.
Graduate Studies:
Harvard University, 2001 to present
Thesis Title: “Price Adjustment, Pass-Through and Monetary Policy”
Expected Completion Date: June 2007
Thesis Committee and References:
Professor Robert Barro
Department of Economics
617-495-3203
rbarro@harvard.edu
Professor Ariel Pakes
Department of Economics
617-496-3960
ariel@ariel.fas.harvard.edu
Professor Kenneth Rogoff
Department of Economics
617-496-0062
krogoff@harvard.edu
Professor Alberto Alesina
Department of Economics
617-495-5077
aalesina@harvard.edu
Teaching and Research Fields:
Macroeconomics, International Economics, Empirical Industrial Organization
Teaching Experience:
Spring, 2005
Ec 1035, Teaching Fellow for Professor Sendhil Mullainathan
Research Experience and Other Employment:
Spring 2006Bureau of Labor Statistics, Outside Researcher in the Division of Price and Index
Present
Number Research.
Spring 2006Bureau of Economic Analysis, Outside Researcher.
Present
Spring 2006
Board of Governors of the Federal Reserve System, Dissertation Intern.
Professional Activities:
Presentations: “Five Facts about Prices”: Federal Reserve Board (07/06), NY Fed (08/06),
Cleveland Fed/Bank of Canada/Swiss National Bank Annual Conference (09/06),
Boston University (10/06), Boston College (10/06), NBER Monetary Economics
Meeting (11/06).
“Price Setting in Forward-Looking Customer Markets”: Columbia (09/05), MIT
(02/06), NYU (03/06), CEPR ESSIM Conference (05/06).
Referee:
American Economic Review, Quarterly Journal of Economics, Review of Economics
and Statistics, Journal of Business and Economic Statistics.
Honors, Scholarships, Fellowships and Grants:
2005-2006
Chiles Fellowship, Harvard University
2006
Warburg Fund Grant
2005-2007
Bradley Fellow
2004-2005
USDA Cooperative Research Grant
2001-2004
Graduate Fellowship, Harvard University
2001-2003
National Science Foundation Fellowship
Publications:
Inflation Forecasting using a Neural Network, Economics Letters, 86: 373-378, March 2005.
Technical Change in a Bubble Economy: Japanese Manufacturing Firms in the 1990s, (with T.Nakajima,
A.Nakamura and M.Nakamura), Empirica: Journal of Applied Economics and Economic Policy,
forthcoming.
Research Papers:
“Five Facts About Prices: A Reevaluation of Menu Cost Models” (Primary Job Market Paper)
(with Jón Steinsson)
We establish five facts about prices in the U.S. economy: 1) The median implied duration of consumer
prices when sales are excluded at the product level is between 8 and 11 months. The median implied
duration of finished goods producer prices is 8.7 months. 2) One-third of regular price changes are price
decreases. 3) The frequency of price increases responds strongly to inflation while the frequency of price
decreases and the size of price increases and price decreases do not. 4) The frequency of price change is
highly seasonal: It is highest in the 1st quarter and lowest in the 4th quarter. 5) The hazard function of
price changes for individual consumer and producer goods is downward sloping for the first few months
and then flat (except for a large spike at 12 months in consumer services and all producer prices). These
facts are based on CPI microdata and a new comprehensive data set of microdata on producer prices that
we construct from raw production files underlying the PPI. We show that the 1st, 2nd and 3rd facts are
consistent with a benchmark menu-cost model, while the 4th and 5th facts are not.
“Accounting for Incomplete Pass-Through”
Recent theoretical work has suggested a number of potentially important factors in causing incomplete
pass-through of exchange rates to prices, including markup adjustment, local costs and barriers to price
adjustment. I empirically analyze the determinants of incomplete pass-through in the coffee industry.
The observed pass-through in this industry replicates key features of pass-through documented in
aggregate data: prices respond sluggishly and incompletely to changes in costs. I use microdata on sales
and prices to uncover the role of markup adjustment, local costs, and barriers to price adjustment in
determining incomplete pass-through. I carry out this decomposition in a structural oligopoly model with
menu costs that nests all three potential factors. The implied pricing model explains the main dynamic
features of pricing. I find that local costs and markup adjustment explain 78% and 20%, respectively, of
incomplete pass-through, while menu costs explain only 2%. Menu costs nevertheless play an important
role since they explain the delayed response of prices to costs. I find that delayed pass-through in the
coffee industry occurs almost entirely at the wholesale rather than the retail level.
“Monetary Non-Neutrality in a Multi-Sector Menu Cost Model”
(with Jón Steinsson)
We calibrate a multi-sector menu cost model using new evidence on the cross-sectional distribution of
the frequency and size of price changes in the U.S. economy. The degree of monetary non-neutrality
implied by this multi-sector model is triple that implied by a one-sector model calibrated to the mean
frequency of price change of all firms. Our model incorporates intermediate inputs. This feature
generates a substantial amount of real rigidity, which also roughly triples the degree of monetary nonneutrality in the model without affecting the size of price changes. The model with intermediate inputs
also generates positive comovement of output of different sectors, unlike a model with no real rigidities.
We compare our menu cost model to an extension of the Calvo model that is able to match the large size
of price changes observed in the data.
“Price Setting in Forward-Looking Customer Markets”
(with Jón Steinsson)
We propose a new explanation for price rigidity. If consumers form habits in individual goods, then
firms face a time-inconsistency problem. The consumers' habits imply that low prices in the future help
attract customers in the present. Firms would therefore like to promise low prices in the future. But when
the future arrives they have an incentive to exploit consumers' habits and price gouge. In this model,
unlike the standard no-habit model, price rigidity is an equilibrium outcome. Equilibrium price rigidity
can be sustained because rigid prices help firms overcome the time-inconsistency problem. If consumers
have incomplete information about firms' desired prices, the firm-preferred equilibrium has the firm
price at or below a ``price cap''. Our model therefore provides an explanation for the simultaneous
existence of a rigid regular price and frequent sales, a pattern that is difficult to reconcile with existing
models of price rigidity. Our model also explains why firms fear adverse reactions to price changes, why
sales prices are more flexible than regular prices and why firms make explicit promises not to change
prices.
“Layoffs and Lemons over the Business Cycle” (revised and resubmitted to Economics Letters)
Work in Progress:
“Learning and the Long Rate” (joint with Gopika Goswami and Jón Steinsson)