The body of my published
research encompasses two broad areas. In the first one I have examined
different aspects of monetary policy, volatility and the banking
system. A particular focus of my work is the extent to which the
conduct of monetary policy and bank regulation may either enhance or
reduce the scope for multiple equilibria to be observed. This issue is
particularly important because in the former case we could observe
economic fluctuations that arise purely from interactions of markets
participants, rather than from exogenous shocks that might impact the
economy.
The second major broad area of my published research is devoted to studying and applying the theory of dynamical systems to monetary economics. During the last several decades the study of nonlinear dynamical systems has been introduced in many disciplines. The study of macroeconomics cannot be completely understood without the use of a dynamic process. Many macroeconomic concepts rely on intertemporal trade offs, thus inherently embracing the concepts and methodology of dynamical systems. A particular focus of my research is to study the possibility of chaotic dynamics, forecasting difficulties arising from models with multiple equilibria, and the complexities in models with costly information.
Recently I have been also exploring a different set of research areas: different aspects of optimal taxation in search theoretic models of money, optimal taxation in environments with habit formation and the relation between changes in the macroeconomic environment and health outcomes.
The new paradigm in monetary economics is the random-matching model of Kiyotaki and Wright (1991) and its intellectual descendants. This modeling approach puts the following question at center stage: In the presence of trading risk and/or pairwise trade, what are the nature of optimal monetary policy and the costs of deviating from the optimal policy? Allowing the government to use other tax instruments may have important implications for optimal monetary policy. Currently, I am exploring these important issues and in the future I intend to examine how these optimal policies affect the financial system.
Regarding optimal taxation in real economies, so far in the literature it has not fully explored the different interactions of taxing addictive goods alongside non-addictive. In this more general environment since not all components of aggregate demand may be subject to habit formation, it follows that changes in the composition of aggregate demand will in general affect the strength of the price-elasticity and thus optimal taxation for the different types of consumption goods. In the future I plan to continue exploring the role of habits in optimal taxation when other consumption goods are taken into account in terms of volatility as well as multiplicity of equilibria.
Finally, in the health research agenda, I am currently analyzing how changes in taxes and information requirements can affect different health outcomes. This is of paramount importance in that it may provide alternative public policies to ameliorate health problems like obesity. In the future I plan to continue exploring the role of the macroeconomic environment in shaping different health outcomes.