【Seminar 417预告】Donghai Zhang (新加坡国立大学)

摘要题目:Lumpy R&D and the Great Twins: Great Moderation and Great Recession

题目:Lumpy R&D and the Great Twins: Great Moderation and Great Recession

主讲人:Donghai Zhang, 新加坡国立大学




Dr. Donghai Zhang is an Assistant Professor at the National University of Singapore and a research fellow at the University of Bonn. He received his Ph.D. from the Universitat Pompeu Fabra in 2018. His research interests include Macroeconomics, Monetary Economics, and Applied Macroeconomics. Donghai’s publications have appeared in such journals as the Journal of Monetary Economics and the Journal of the European Economic Association. He has received grants from the Social Science Research Council (Singapore) and the German Science Foundation.


We document that firm-level R&D investments are lumpy, characterized by episodes of inaction and large increases in R&D expenses, suggesting the relevance of R&D de- cisions along the extensive margin. Furthermore, the extensive margin, measured as the share of firms making spike adjustments in their R&D expenses, is pro-cyclical and explains 75% of the pro-cyclicality of aggregate R&D. Motivated by these em- pirical findings, we develop a medium-run business cycle model with heterogeneous innovative firms and fixed adjustment costs, featuring lumpy R&D. Within this frame- work, we identify a novel mechanism that gives rise to the ‘Great Twins’ hypothesis: the Great Moderation—characterized by reduced economic fluctuations until 2008— caused the observed severity of the subsequent Great Recession. We provide micro- and macro-level evidence supporting this hypothesis. Finally, we discuss the policy implications of our findings, including the novel tail-risk and variance tradeoff faced by central banks.