How the Price System Works: Evidence from Supply Chains and Price Controls

Abstract

I study the unintended or spillover effects of shocks, policies, and institutions. My empirical work is situated within a market economy setting, where price movements (or the lack thereof) can provide the incentives that enable these unintended or spillover effects to occur. In Chapter 1, I focus on how commodity price movements affect a multitude of industries as they propagate through supply chains – an example of how a shock originally localized to one industry can spill over to other industries. In Chapter 2, I focus on how the wage rigidity induced by unions and minimum wage policy contribute to the efficacy of monetary policy – an example of how policies and institutions can generate unintended effects on the economy, even leading other policies (monetary policy, in this case) to have different effects. In Chapter 3, I assess how state-level minimum wage changes affect the migration patterns of low wage workers across states – an example of how state-level policies spill over to other states. Because individuals (or households) “vote with their feet” when they move, determining the migration effects of minimum wage changes allows us to measure whether these workers view the wage increases as beneficial.