Laura Nicolae
Ph.D. Candidate in Business Economics, Harvard University
I am a fourth-year Ph.D. student studying Business Economics in the Harvard Economics Department and the Finance Unit at Harvard Business School. Previously, I worked as a research analyst in U.S. Economics at Goldman Sachs.
My research interests are in monetary policy, banking, and macroeconomics.
Research
Working Papers
Abstract: In Belgium, nearly all employees' wages are indexed to inflation. Firms are grouped into longstanding labor agreements that determine the exact timing and frequency at which wages are indexed, e.g. every year versus every month. Using firm-level administrative data, we leverage the resulting variation in real wages across firms to estimate the employment response. We find that employment contracts by 0.4% over four quarters for each 1% increase in wages. This result is robust to including NACE sector-date fixed effects and to using only variation in firms' indexation timing, controlling for their chosen indexation frequency. About one-third of the response comes via anticipation of future wage increases. The elasticity is more than twice as large in magnitude in the post-pandemic period than before it, suggesting strong nonlinearities. Overall, these results show that, by preventing inflation from reducing real wages, inflation indexation reduces employment.
Publications
"The Evolution of Banking in the 21st Century: Evidence and Regulatory Implications" with Samuel G. Hanson, Victoria Ivashina, Jeremy C. Stein, Adi Sunderam, and Daniel K. Tarullo. Forthcoming in Brookings Papers on Economic Activity, Spring 2024. (Conference Draft)
Abstract: As revealed by the failures of three regional banks in the spring of 2023, bank runs are not a thing of the past. To inform the ongoing discussion of the appropriate regulatory response, we examine trends in the banking industry over the last twenty-five years. On the liability side of bank balance sheets, deposits—and especially uninsured deposits—have grown rapidly. On the asset side, there has been a notable shift away from the information-intensive lending traditionally associated with banks and towards longer-term securities such as MBS and long-term Treasuries. These trends appear to be related, in the sense that banks with the most rapid growth in deposits have seen the biggest declines in loans as a share of assets. Thus, while the banks that failed in early 2023 were arguably extreme cases, they reflect broader trends, especially among larger banks. We construct a simple model to help assess the main regulatory options to reduce the risk of destabilizing bank runs—expanding deposit insurance and strengthening liquidity regulation— and argue that the industry trends we document favor the latter option. Using the model, we offer some design considerations for modifying the Liquidity Coverage Ratio so as to require banks to pre-position sufficient collateral—largely in the form of short-term government securities—at the Federal Reserve’s Discount Window to ensure they have enough liquidity to withstand a run on their uninsured deposits. We also comment briefly on some other regulatory implications of our findings, including for interest rate risk regulation and merger policy.
Selected Non-Academic Publications
"Central Bank Digital Currencies: Implications for the U.S. Financial System and Fiscal and Monetary Policy" with David Mericle. Goldman Sachs Economics Research, December 2020.
Coverage: Financial Times, Business Insider
"A Blue Wave Through the Fed's Eyes" with Jan Hatzius, David Mericle, and Alec Phillips. Goldman Sachs Economics Research, September 2020.
Coverage: Wall Street Journal, New York Times, Washington Post, CNN, NBC News, Newsweek, Saturday Night Live
"The Economic Effects of a $15 Minimum Wage" with David Mericle and Alec Phillips. Goldman Sachs Economics Research, February 2021.
Coverage: CNBC, Bloomberg
"Pent-Up Savings and Inflation After World War II." Goldman Sachs Economics Research, February 2021.
Teaching
The Financial System and the Central Bank (undergraduate): Head Teaching Fellow for Prof. Jeremy Stein, Spring 2024.
Managing and Innovating in Financial Services (MBA): Teaching Assistant for Prof. David Scharfstein, Spring 2024.
Econ 1499: Macroeconomic Stabilization Policies (undergraduate): Head Teaching Assistant for Prof. Larry Summers, Fall 2020.
Fellowships and Awards
National Science Foundation Graduate Research Fellowship, 2023.
Paul and Daisy Soros Fellowship for New Americans (one of 30 graduate students in the U.S.). 2022-2023.
John T. Dunlop Prize for top Harvard College thesis in business and government. 2020.
Thomas Temple Hoopes prize for outstanding Harvard College thesis. 2020.
National Top Speaker, High School Policy Debate, National Speech and Debate Association. 2016.