Christian Julliard

🚨 New paper: "Factor Identity" w/ Jiantao Huang & @rlx_shi The factor zoo has hundreds of animals. We show they belong to just a handful of species. We introduce factor identities — groups of factors that tell the same pricing story — and a Bayesian method to find them 🧵

@Francesco_Bia, @gprimce, Frank Schorfheide, and I wrote a #VoxEU piece on our PhD advisor, Chris Sims. It discusses what he meant for economics, and for us cepr.org/voxeu/columns/…

Spurred by @GautiEggertsson, here is Chris Sims showing up in footnote #1 for 2 additional Nobel prize papers: Kydland and Prescott (1977) and Hansen (1982).

Famously (there is a beautiful Works in Progress piece on this) in 2016, Geoffrey Hinton told an audience in Toronto that medical schools should stop training radiologists, since AI would soon outperform them at reading scans. Ten years later, there are more radiologists than ever, and they earn more than they did then. Hinton was right about the task, but he was wrong (so far!) on the future of the radiology profession. Times have never been better for them. The gap between those two claims, the difference between tasks and jobs, is the subject of a paper I have written with Jin Li and Yanhui Wu, and that we release today: "Weak Bundle, Strong Bundle: How AI Redraws Job Boundaries." (Very relatedly we are also finishing the first draft of our book "Messy Jobs" on AI and Jobs!! You will be the first to hear). We start from the observation that the growing literature on AI and labor markets measures the AI shock by task exposure: people count how many tasks AI can perform in a given occupation AI can perform, and infer that more exposure means more displacement. Eloundou et al. published a paper in Science in 2024 that started this literature, and many follow the same logic. The inference they make is that the more exposed tasks, the worse the outcomes. This is incomplete, because labor markets price jobs, not tasks. A radiologist does not just sell image classification, but does many other jobs: triages cases, communicates with other physicians, trains residents, makes the difficult decisions, and signs a diagnosis. The market buys a bundled service. The question AI poses is not whether it can do one task inside the bundle. The question is whether that task can be pulled out. Thread (1/3) dropbox.com/scl/fo/689u1g7…

1/Chris Sims is easily one of the most influential macroeconomists (& perhaps most influential empirical macroeconomist) of the last 50 years; he fundamentally changed thinking about monetary policy, metrics,& causality (VARs, time series models). Thread on his greatest hits🧵👇

Mi cita favorita de Sims. Una hoja de ruta para cualquier economista

Chris was a giant indeed—one of the sharpest minds, an incredibly kind human being driven by unbending intellectual integrity. He truly changed how many of us think about economics and inference. “Master Yoda”, for many of us that have been his students, will be dearly missed

And here is the link: papers.ssrn.com/sol3/papers.cf…

🚨 New paper: "Factor Identity" w/ Jiantao Huang & @rlx_shi The factor zoo has hundreds of animals. We show they belong to just a handful of species. We introduce factor identities — groups of factors that tell the same pricing story — and a Bayesian method to find them 🧵

Baseline: the SDF is dense in factors but sparse in identities. A new theory adds content iff it introduces an identity not already spanned. Factor IDs restore economic legibility to the zoo. "Things are the same of which one can be substituted…without loss of truth" — Leibniz

More findings: HML, CMA & IA form ONE identity — direct evidence for investment-based asset pricing (Berk, Green & Naik 1999). Value and investment tell the same pricing story HKM and AEM intermediary factors are NOT substitutes — distinct identities

More teasers: Title page plus an interesting result Most models of production networks are static, while I analyze dynamic flows on networks. But for worst-case/H∞ performance & robustness, only frequency zero/steady state matters. (maximum singular value of Leontief inverse)

Calling all Macro PhD students based in and around London! Join us for a workshop at LSE on 14 Nov to get to know each other and discuss your research. Send us your paper or extended abstract by 15 Aug! sites.google.com/view/london-ma…

@KapoglisSteve @Acyn No it doesn’t 🤦🏻‍♂️

@Acyn The EU's standard minimum VAT rate is 15% for its 27 member countries. The actual VAT rates of the EU countries range between 17% and 27%, The vat has the same effect as a tariff, its an even playing field now. its a fair deal.

Lutnick: The European union is going to pay 15%  Baier: So this 15% is on the difference the $200 billion trade deficit; is that right? Not the $2 trillion we trade with each other, right? Lutnick: No, it's all exports to America. So basically everything they send us is going to pay 15% except for a few little things

We are hosting the 14th Advances in Macro-Finance Conference in Santa Barbara on Oct 17 and 18. Please submit your paper at forms.gle/DaP86ZptjX4J1K…

@MichaelAArouet Life expectancy is 86.2 years for women and 81.1 for men in France. In Mississippi, that averages as 70.9 years. Just saying…

The poorest US state, Mississippi has higher GDP per capita than France. Big state, regulations and unions don’t make people wealthier, they make everyone poorer. Why is it so difficult to understand?

@ricardovlago So you’d rather live in Jackson than in Paris? If so your discount rate should be quite high: life expectancy is 86.2 years for women and 81.1 for men in France. In Mississippi, that averages as 70.9 years...

Go to Paris take a look and then go to Jackson. Compare. I don’t think you need to poke around statistics!

🧵 "How economics teaching became the Aeroflot of ideas" -- great title by @hajoonchang. But the content? We supposedly teach "variations of the failed theme of efficient markets", that the system is "fundamentally fair, rational, and efficient" and folks should 1/6 ➡️