Many dynamic models do not have balanced growth paths. This makes it difficult to interpret model outputs. We define the Stable Transformation Path (STraP) for a wide class of models and prove existence and uniqueness. The STraP allows for a theory consistent way of separating out Neoclassical transition dynamics from long-run structural change. We then explore its properties.
Works in Progress
Unemployed or Out of Town: Optimal Spatial Adjustment to Regional Shocks June 2022
In this paper, I study the optimal place-based transfers in a country with nominal rigidities and free migration. After a region suffers a negative demand shock, monetary transfers can stimulate demand since people disproportionately buy local. However, the money encourages people to stay in a recessionary region when they could find gainful employment somewhere else. If people are mobile enough, the government actually wants to tax people in a region that suffers a demand shock.