Welcome! I am an Assistant Professor of Economics at Stony Brook University. My research interests are primarily in macroeconomics, with a focus on inequality and firm dynamics. I also work on topics in international trade, financial economics, information theory, and spatial economics. I hold a PhD in Economics from New York University and an MSc in Financial Economics from the University of Oxford.

Here is my CV.

Contact me via jonathan.becker@stonybrook.edu.

Working Papers

Importers, Market Power and Optimal Tariffs
(with Corina Boar and Virgiliu Midrigan)
[ Draft | Slides coming soon]
Importers are few and large, have higher labor productivity and pass through cost changes to prices incompletely. We study optimal tariffs in a model consistent with these facts. Firms pay a fixed cost to import and charge markups that increase with size. Market power implies that importers are too few and too small relative to the efficient allocations. Tariffs amplify this distortion. We derive a formula that relates the optimal tariff not only to the foreign export supply elasticity but also to how much distortions amplify the effect of trade costs on welfare. In our calibrated economy the optimal tariff is negative and decreases with country size.

Do Poor Households Pay Higher Markups in Recessions?
(JMP, presented at 2024 Chicago Fed Rookie Conference)
[ Draft | Slides | AI-generated Short Podcast ]
Poor and rich households greatly differ in their product choices, with the poor allocating a larger share of their spending toward cheaper goods. In recessions, all households move toward cheaper goods. Using NielsenIQ micro data, I build and calibrate a model with nonhomothetic demand and oligopolistic competition that replicates these patterns. I feed observed expenditure shifts from the Great Recession and COVID-19 into this model to isolate a demand-composition channel: demand shifts toward cheaper goods weaken cross-tier competitive pressure from premium goods, increase budget-tier markups, and tilt relative prices against baskets purchased by the poor. In the Great Recession, budget-tier markups rise 5.7 pp vs 2.3 pp for premium (relative price +2.6%); in COVID-19 they move +4.3 pp vs -2.7 pp (relative price +5.3%). Bottom money-metric welfare losses exceed symmetrically deflated spending losses by 4.9 pp (Great Recession) and 4.0 pp (COVID-19); prices account for roughly 43% of the bottom’s Great Recession loss and mitigate about 10% at the top in COVID-19.

The Spatial Distribution of Markups
(with Chris Edmond, Virgiliu Midrigan, and Daniel Yi Xu)
[ Draft | Slides ]
How much does the geographic segmentation of the US economy matter for competition and market power? We answer this question using a quantitative spatial model with multi-establishment firms, oligopolistic competition, and endogenously variable markups, calibrated to match US manufacturing data across 170 Economic Areas. We find that spatial frictions have large effects on competition. The reduction in effective competition they create is equivalent to removing a randomly chosen 90% of firms from each sector of an otherwise identical economy without geography. The welfare costs of markups are correspondingly large, 5.7% on average, considerably higher than the 3.7% implied by that economy without geography. The welfare costs are also very unevenly distributed, ranging from about 1% or less in large central locations like New York to more than 20% in Honolulu.

Entry under Information-Frictions
(Best Third-Year Paper Award)
[ Draft | Slides soon ]
I study the welfare-impact of entry-stage information frictions in the US macroeconomy. The framework for this exercise is a simple Chamberlinian model with heterogenous firms, entry-stage selection, and rigidities in capital adjustments. The severity of information frictions is governed by the precision of a private signal on firm-level fundamentals. Leveraging data on exit rates and capital adjustments among comparatively young establishments, the model is calibrated to US Census of Manufactures and BDS data. I find that a reduction of information frictions over time is consistent with a number of well-documented secular trends: a rise in concentration, an increase in profitability, as well as a decoupling of wage- and productivity-growth. The welfare-gains from a counterfactual elimination of entry-stage information frictions are roughly 10% in consumption-equivalent terms.

Work In Progress

Does a Shrinking Middle Class Lead to Higher Markups?
This paper links the well-documented rise in expenditure inequality over the past decades with the concurrent rise in markups and decline of the labor share. I make this argument using a structural model of firm dynamics with nonhomothetic consumer preferences and oligopolistic product market competition. I calibrate this model to micro data from the Nielsen Consumer Panel and I find that market power is most consequentially disciplined by comparatively price-elastic middle class consumers. A secular rise in inequality leads to a shift of consumers into both tails of the expenditure distribution and therefore a shrinking middle class. As a result, firms become less concerned about losing business from comparatively price-sensitive middle-class consumers and focus on extracting rents from their more price-insensitive customer segments. Markups rise. This secular reduction of product market competition is quantitatively consequential even when accounting for changes in the barriers to entry over time.