My main research fields are the Economics of Technical Change and Economic Growth; Firm-Level Data Analysis; Bayesian Econometrics; and Information Theory. The following is the list of published journal articles, book chapters, and working papers. I also include some ongoing projects in Work in Progress section.
I review key elements of information theory, focusing on notions and applications of entropy and statistical equilibrium in economics, paying particular attention to how entropy concepts open up a new front line for economic research.
2. Yang, J. and Torres, D. “The Persistent Statistical Structure of the US Input-Output Coefficient Matrices: 1963-2007,” Economic Systems Research, 2019
We report on the persistent statistical patterns of the US Input-Output tables and show that the inter-industry relations are stable in the US economy over the past 5 decades.
I report on a persistent pattern of technical change at the firm level and analyze firms’ the rate of cost reduction (the growth rate of TFP) by using a maximum entropy model with the constraints on agent’s quantal response and the dynamics of the factor market.
2. Yang, J. and Carro, A. “Two Tales of Complex System Analysis: ABM and MaxEnt”, EPJST, forthcoming.
We argue in this paper that maximum entropy modeling and agent-based modeling can complement each other, providing a powerful conceptual/empirical tool for the analysis of complex economic problems.
1. Yang, J. “Information-Theoretic Model of Induced Technological Change: Theory and Empirics”, Under Review.
I develop an information-theoretic model of Induced Technical Change where payoff-maximizing agents are exposed to a positive degree of uncertainty in adopting new technology due to unobserved cost factors. The derived equilibrium of the model comes in the form of a non-degenerate probability distribution that defines the distance of productivity growth from the potential maximum growth on the innovation possibility frontier, often called Technical Inefficiency Function (TIF) in the frontier estimation literature. I test the model using KLEMS data and show that the gamma TIF well explains the productivity deviation of EU industries from the theoretical frontier.
2. dos Santos, P. and Yang, J. “Arbitrage, Information, and the Competitive Organization of Profitability Distributions”, R&R.
We report on the easily reproducible finding that the profitability of enterprises has a persistent cross-sectional distribution across a number of advanced economies. We show that the asymmetric Laplace distribution with the Pareto tails can be a good model for this pattern and discuss its economic implications based on the arbitrage seeking behavior of firms.
3. Yang, J., Torsten Heinrich, Julian Winkler, François Lafond, Pantelis Koutroumpis, and Doyne Farmer. “Measuring Productivity Dispersion: a Parametric Approach Using the Levy Alpha-Stable Distribution.”
We propose to model the distributions of labor productivity using the four-parameter Levy stable distribution, a natural candidate deriving from the generalized Central Limit Theorem. We show that it is a better fit than several standard alternatives, and is remarkably consistent over time, countries and sectors. The distributional approach allows us to test different measures of dispersion and find that productivity dispersion has slightly decreased over the past decade.
Work in Progress
- “Information-Constrained Behavior, Technological Frontier, and Equilibrium: Theory and Simulations”
- “Draining the Cash ow Swamp: Understanding the Global Investment Slowdown,” with Ilan Strauss
- “The Structure of Input-Output Linkages and Economic Growth” with Luis Daniel Torres Gonzalez, Advait Rajagopal, François Lafond, and Doyne Farmer
- “On the Rational of Maximum Entropy Methods in Economics,” with Ellis Scharfenaker
- “Growth, development, and structural change at the rm level: The example of the PR China,” with Torsten Heinrich and Shuanping Dai
- “Heterogeneity and Persistence of Product Price Changes,” with
Valentina Semenova, François Lafond, and Doyne Farmer
- “Firm-Level Wage Dispersion,” with Julian Winkler