Joe Haslag, Kenneth Lay Chair in Economics
Department of Economics
118 Professional Bldg.
University of Missouri-Columbia
Columbia, MO  65211

PHONE: 573-882-3483
FAX: 573-882-2697

email: haslagj@missouri.edu

Areas of specialization:

Monetary economics
Macroeconomics
 
 
Missouri Economic Conference 2004 Photographs

• Econ Dept main page
• Econ 1014 Course Page
• Econ 9431 Syllabus
• Econ 4329/7329 Syllabus
• CV

Current Research: 

• Optimal monetary policy with hidden action NEW!
  (joint with Joydeep Bhattacharya & Antoine Martin)

In this paper, we compare optimal monetary in two versions of a standard randomrelocation overlapping generations economy. In the first version, the Friedman rule is optimal monetary policy. In the second version, we introduce hidden action and show that the planner’s allocation has a wedge in the form of unequal consumption; movers consume less than non-movers. In a decentralized setting, the efficient allocation can be achieved by deviating from the Friedman rule. In the second model economy, agents exert costly, but socially beneficial effort that reduces their relocation probability. By deviating from the Friedman rule, greater effort is induced and thus, the decentralized economy replicates the planner’s allocation. The key lesson is that deviating from the Friedman rule may be desirable if it provides incentives for agents to take socially beneficial actions. This requires however, that money holders, and only they, be the target of the incentive.

• Coordination, Sunspots, and Endogenous Volatility: An Application to Illegal Immigration
  
  In this paper we provide an alternative explanation for why illegal immigration can exhibit substantial
  fluctuations despite a constant wage gap. We develop a model economy in which migrants make decisions
  in the face of uncertain border enforcement and lump-sum transfers from the host country. The uncertainty
  is extrinsic in nature, a sunspot, and arises as a result of ambiguity regarding the commodity price of
  money. Migrants are restricted from participating in state-contingent insurance markets in the host country,
  whereas host country natives are not. We establish the existence of sunspot equilibria that are not mere
  randomizations over certainty equilibria. Volatility in migration flows stems from two distinct sources: the
  tension between transfers inducing migration and enforcement discouraging it and secondly the existence
  of a sunspot. Finally, we examine the impact of a change in tax/transfer policies by the government on
  migration.

• On the Determinants of Optimal Border Enforcement
(joint with Mark Guzman and Pia Orrenius)

We extend the current immigration-enforcement literature by incorporating both the practice of people
smuggling and a role for non-wage income into a two-country, dynamic general equilibrium model. We use
the model economy to examine three questions. First, how does technological progress in the smuggling
industry a?ect the level of migration and capital accumulation for a given level of enforcement? Second, do
changes in border enforcement a?ect the level of migration, capital accumulation, and smuggling activity?
Third, is the optimal level of enforcement sensitive to technological progress in the smuggling industry? We
examine both the global dynamics and the steady state equilibrium with respect to capital accumulation
and migration.

• On Fed watching and central bank transparency in an overlapping generations economy.

                         (revised) 6/26/01)

ABSTRACT: Very little attention has been given to the role of fed watching in the debate central bank transparency and opaqueness.  I use an overlapping generations economy to analyze this problem.  With finite lived agents, there is inherent conflict between generations at a given instant.  This conflict plays a crucial role in determining whether transparency or opaqueness is welfare maximizing.  I can also derive the classic result that more information is better. \ If monetary policy is the only source of uncertainty in economy, it is better for the central bank to be transparent.  However, with any intrinsic uncertainty, it is possible that an opaque central bank would result in higher expected lifetime welfare than a transparent one.