Date Available


Year of Publication


Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation


Business and Economics



First Advisor

Dr Ana María Herrera


This dissertation looks at the role that various macroeconomic shocks have on the economy through the lens of both macro- and micro-economic perspectives. In the macro realm, I examine the importance of how researchers measure shocks; functional shocks reveal information latent in scalar shocks. From the micro point of view, I examine the impact of a change in national tax policy.

In Chapter 2, I analyze the effect of monetary policy shocks on household consumption. Measuring shocks as shifts in the entire term structure of interest rates reveals a heterogeneous response of households to conventional and unconventional policies. I find that consumption by outright owners is more sensitive to unconventional shocks than that of mortgagors and renters. Additionally, I show that younger households’ consumption is more responsive to shocks that affect medium and longterm interest rates than that of middle-aged and older households. Two transmission mechanisms appear to play a key role in explaining heterogeneity in the transmission of unconventional monetary policy: differences in wealth and the planning horizon of households.

In Chapter 3, I estimate to what extent state and local taxes (SALT) are capitalized into home value using Zillow’s ZTRAX dataset. To identify capitalization rates, I use the implementation of SALT caps through the passage of the TCJA to see how a national change in the price of local residence impacted housing markets. Using IRS Statistics of Information data on the ZIP code level tax filings, I estimate that approximately 76 percent is capitalized into sales price. To control for local amenities and housing characteristics, I leverage a repeat sales model identified through event study and difference-in-difference estimates. Overall, I find evidence that sales prices decline in areas with the greatest exposure to the SALT deduction and strong evidence of partial capitalization.

In Chapter 4, I revisit the effect of tax policy expectations shocks on the economy. Measuring shocks as shifts in the entire term structure of implicit tax rates reveals that anticipated tax changes strongly depend on the relationship of short- and long-run expectations. Anticipated tax cuts lead to an increase in output if long-run implicit tax rates are higher than short-run rates. Conversely, tax increases can cause positive responses in output when future tax rates are anticipated to be lower. I show that changes in output are primarily driven by re-timing consumption and investment to periods of lower taxes.

Digital Object Identifier (DOI)