Lingxuan "Sean" Wu
I am a PhD Candidate in Economics at Harvard University. My research interests are in macroeconomics, finance, and behavioral economics. I am on the 2024-25 academic job market.
Contact: lingxuanwu@g.harvard.edu
CV: here
Job Market Paper
Thinking about the Economy, Deep or Shallow? (with Pierfrancesco Mei).
Abstract: We propose a theory of shallow thinking to capture people’s limited understanding of the long causal chains involved in the propagation of shocks. We cast general equilibrium as a system of causal relations in a directed cyclic graph. Estimation from our qualitative survey suggests that, on average, people think about only 2.6 steps of propagation, overlooking much of the graph and deviating significantly from rational expectations. Our theory implies that longer causal chains have diminishing influence on beliefs. Applying shallow thinking to a New Keynesian model with active monetary policy reconciles several bond market puzzles and yields macroeconomic consequences: (i) long-term interest rates underreact to cost-push shocks but overreact to monetary policy shocks; (ii) inflation expectations negatively predict bond excess returns; and (iii) the inflation response to cost-push shocks is stronger than under rational expectations and, contrary to that paradigm, increases with shock persistence. In a real business cycle model, relative to rational expectations, shallow thinking amplifies and prolongs output fluctuations from productivity shocks and predicts negative future stock excess returns.
Other Working Papers
A Theory of Land Finance and Investment-Led Growth. February 2024.
Monetary Transmission and Portfolio Rebalancing: A Cross-Sectional Approach (with Xu Lu). November 2023.
- Revise and Resubmit at Journal of Financial EconomicsMental Macro-Finance Models: Evidence and Theory. January 2023.
Network Lerner Index: Demand and Distortions across Industries. December 2022.
- Revise and Resubmit at Review of Economic StudiesPlatform Competition and Interoperability: The Net Fee Model (with Mehmet Ekmekci and Alexander White). October 2024.
- Revise and Resubmit at Management Science
Work in Progress
HANK Meets Tobin: Aggregate Demand with Inelastic Asset Markets (with Adrien Auclert, Matthew Rognlie, and Ludwig Straub).
- Presented at SED 2022
Teaching
Economic Theory (1st-year PhD macro, Econ 2010d), Harvard University, Spring 2022.
- TF for Profs. Adrien Bilal and Xavier Gabaix; evaluation: 4.88/5 [PDF]Macro-Finance: Rational and Behavioral (PhD field), Harvard University, Fall 2021.
- TF for Prof. Xavier Gabaix; evaluation: 5/5 [PDF]Economics of Online Platforms and the Sharing Economy (undergraduate), Tsinghua University, Spring 2019.
- TA for Prof. Alexander White