Tiago C. Berriel

                              Job Market Candidate
                                                   Economics Department,  Princeton University.  
                                                   Email: tberriel@princeton.edu

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Research

 Nominal Portfolio Choice and Redistribution Effects of Inflation Surprises (First Version: October 2009; This Version: November 2009)

Abstract: Different ratios of nominal assets to total wealth imply that unexpected changes in price level impact relative financial wealth. Nominal asset transfers are, however, an incomplete account of the impact on total wealth, if shocks that change inflation also affect household's current and future disposable income or the return of the real assets. In this paper, I measure the impact of unanticipated inflation on consumption, a proxy for total wealth, rather than on portfolio revaluation. I find that inflation surprise correlated positively with total wealth in the US since 1980. Moreover, the consumption adjustment is similar in magnitude for different ages and income, without relative winners and losers predicted by portfolio revaluation effects. This fact can be explained in a general equilibrium model with endogenous portfolio choice and different aggregate risks in agents' disposable income. Analytically, I show that transfers in the asset markets can be a misleading measure of total wealth transfers, given the insurance nature of portfolio decisions. If working-age agents are more exposed to aggregate risks than agents above 65 years old, a calibrated OLG model matches the US data on both consumption impact and nominal asset positions over the life cycle. Moreover, the difference in nominal asset positions across income groups can be explained: on average the poor bear more business cycle risk on their uninsurable income than middle-class agents, while rich bear less.

   2. Hedging against the Government: a Solution to the Home Asset Bias Puzzle (with Saroj Bhattarai) (First Version: June 2008; This Version: October 2009)

   1. Optimal Fiscal and Monetary Policy with Sectorial Heterogeneity (with Daniel Sinigaglia) (First Version: April 2008; This Version: May 2008) Technical Appendix - Revise and Resubmit, Journal of Money, Credit and Banking

   1. Monetary Policy and Central Bank Balance Sheet Concerns The B.E. Journal of Macroeconomics: Vol. 9 : Iss. 1 (Contributions), Article 1, 2009 (with Saroj Bhattarai) Technical Appendix


Teaching

        Eco 329: Environmental Economics, Fall 2008

        Eco 101: Introduction to Macroeconomics, Fall 2008

        Eco 429: Environmental Economics, Spring 2008

        Eco 362: Financial Investments, Fall 2007

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