PhD Candidate, Department of Economics

Contact Information

Department of Economics
Northwestern University
2211 Campus Drive
Evanston, IL 60208
Phone: 312-339-3417
HughMontag2013@u.northwestern.edu

Education

Ph.D., Economics, Northwestern University, 2020 (expected)
MA, Economics, Northwestern University, 2015
BA, Economics and Mathematics (Highest Honors), Swarthmore College, 2011

 

Primary Fields of Specialization

Macroeconomics

Secondary Fields of Specialization

Monetary Economics, Behavioral Economics

Curriculum Vitae

Download Vita (PDF)

Job Market Paper

“On the Welfare Costs of Perceptions Biases”

Download Job Market Paper (PDF)

Abstract: Are households significantly harmed by inaccurate beliefs about inflation? This paper analyzes two established inflation perceptions biases and evaluates their welfare effects. The first bias is the frequency bias, where households overweight goods that they purchase frequently but are a small share of their consumption basket. In my French sample, I find that households fixate on bread prices. The second bias is that households consistently overestimate the current inflation rate, which I call the level bias. I estimate the magnitude of these biases using a confidential French household survey. In order to evaluate the welfare losses of the two biases, I incorporate biased inflation perceptions into a partial-equilibrium model where households save in a single nominal bond subject to inflation risk. The level bias significantly reduces welfare and asset accumulation, while the frequency bias has negligible effects, despite the fact that both biases are prominent in my survey data. I also show that if households have biases in both perceptions and expectations, removing only the perception bias can reduce welfare further.

Other Research Papers

“Entrepôts and Urbanization: Evidence from U.S. Railroads” with Heyu Xiong

Abstract: How significant are spatial frictions in determining the density and distribution of economic activities? We develop and study an economic geography model related to the existence of entrepôts, locations which intermediate trade between pairs of other locations. Entrepôt locations receive a second sector of income due to interchange, attracting more labor and economic activity. We use discontinuities in transportation induced by railroad gauge breaks in 19th century U.S. as an example of this phenomenon. Reduced form evidence indicates that counties containing rail-gauges received a substantial exogenous stimulus. We build a quantitative spatial general equilibrium model to disentangle the effects of entrepôt activity on its local economy as well as to evaluate its general equilibrium consequences.

Teaching

Introduction to Macroeconomics, Macroeconomics, Microeconomics, International Finance, Environmental Economics

References

Prof. Martin Eichenbaum (Committee Chair)
Prof. Giorgio Primiceri
Prof. Matthew Rognlie