Olga Gorbachev

31 Buccleuch Place, 3.06 Edinburgh School of Economics The University of Edinburgh Edinburgh EH8 9JY, U.K. Phone: +44-(0)131-650-3853 Fax: +44-(0)131-650-4514 E-mail: Olga dot Gorbachev at ed dot ac dot uk

Education

• Ph.D. (2007), Economics, Columbia University, New York, NY USA
• M. Phil (2004), Economics, Columbia University, New York, NY USA
• M.A. (2003), Economics, Columbia University, New York, NY USA
• B.A. (1999), Economics, magna cum laude, Brown University, Providence, RI USA

Research Interests

• Applied Economics
• Applied Consumer Theory
• Macroeconomics

Publications

• “Volatility and Job Creation in the Knowledge Economy” (joint with Graciela Chichilnisky), Essays in Dynamic General Equilibrium Theory Festschrift for David Cass. Series: Studies in Economic Theory, Vol. 20, (Eds. Citanna, A.; Donaldson, J.; Polemarchakis, H.; Siconolfi, P.; Spear, S.), p.45-74, 2005.
• “Volatility in the Knowledge Economy” (joint with Graciela Chichilnisky), Economic Theory, v.24 (3), p.531-547, 2004.
• “To What Extent Does Productivity Drive the Dollar?” (joint with Cédric Tille, Nicolas Stoffels), Current Issues in Economics and Finance, v.7(8), August 2001.

Working Papers/Work in Progress

• “Did Household Consumption Become More Volatile?” (December 2008, Revise and Resubmit requested by AER)

Abstract: I show that after accounting for predictable variation arising from movements in real interest rates, preferences, income shocks, liquidity constraints and measurement errors, volatility of household consumption in the US increased between 1970 and 2004. For households headed by nonwhite and/or poorly educated individuals, this rise was significantly larger. This stands in sharp contrast with the dramatic fall in instability of the aggregate U.S. economy over the same period. Thus, while aggregate shocks affecting households fell over time, idiosyncratic shocks increased. This finding may lead to significant welfare implications.

• The Effect of Changing Liquidity Constraints on Variability of Household Consumption. (with Keshav Dogra)

Abstract:  We study whether the increased income uncertainty in the US over the last quarter-century had a negative impact on household welfare by looking at variability of household consumption growth. We are particularly interested in understanding the effect of greater uncertainty on the liquidity constrained households. We study the evolution of liquidity constraints in the US in the Panel Study of Income Dynamics, greatly extending Jappelli et.al (1998) methodology on how to construct such measures using information from the Survey of Consumer Finances. We find that although household indebtedness increased substantially, reflecting greater availability of credit, there was no decline in the proportion of liquidity constrained households between 1983 and 2007. Applying methodology developed in Gorbachev (2009), we find that the evolution of consumption volatility for the liquidity constrained households increased by economically and statistically more than for the unconstrained households. This increase was lower than that of family income volatility for these groups. Nevertheless, the welfare cost to society is substantial: we estimate that an average household would be willing to sacrifice 2.35 percent of nondurable consumption per year to lower consumption risk to its 1984 levels.

• Volatility of Housing Consumption. (with Brendan O'Flaherty)

Abstract:  The aim of the project is to design a theoretical model in which homelessness is an endogenous state that arises in a dynamic stochastic environment. The ultimate goal is to understand whether homelessness spells, entrances and exits could be predicted and if so what information is necessary; and to design and evaluate a homelessness prevention program in a dynamic and stochastic environment. Examples of the questions we want to answer are: Should borrowing constraints be relaxed so that people can borrow their way out of homelessness today, or will relaxing borrowing constraints allow people to over-consume today and so borrow their way into homelessness tomorrow? Should precautionary savings be encouraged so that people have cushions to withstand future shocks, or will savings just delay entry into homelessness?  What interventions will affect the probability of becoming homeless and how will they affect behaviour? How will interventions affect incentives to save and to consume before homelessness prevention programs kick in?

• Why Did Household Consumption Volatility Increase?
• Evolution of Consumption Volatility: a Methodological Note.
• Intra Household Insurance and Assortative Mating from 1970 to 2006.
• Did the Financial Crisis of 1998 have a significant impact on the health of the Russian population? (last version Fall 2002)

View Olga's full CV

Updated December 2, 2009