Welcome to my site! I am an Assistant Professor of Economics at the University of Oregon. Prior to that, I received my PhD in Economics from Northwestern University and I was a Visiting Fellow at the Federal Reserve Bank of San Francisco.

My research interests focus on Macroeconomics, Monetary Economics, Business Cycles, Firm Dynamics, and Household Consumption.

Click here for my CV.
Emails: jcarreno@uoregon.edu
josecarreno.econ@gmail.com

 

Working Papers

“The Macroeconomics of Generative AI: Firm Entry and Price Dynamics”
[SSRN Working Paper]   [PDF Download]
Revised June 2026

Media Coverage: “AI’s Early Gift to Consumers,” by James Pethokoukis, AEIdeas, American Enterprise Institute, March 23, 2026.

Abstract: Much of the early economic literature on generative artificial intelligence has focused on its labor-market consequences. This paper studies a complementary margin of adjustment: the product-market effects of generative AI on firm entry and price dynamics. It constructs a granular panel combining predetermined measures of generative AI exposure with administrative data on U.S. business applications and sectoral Producer Price Indices. Using dynamic continuous-treatment event-study designs, the paper documents two margins of product-market adjustment. First, more exposed industries experience stronger growth in firm entry after the commercialization of generative AI. Moving across the interquartile range of AI exposure is associated with approximately 6.2 percentage points higher business-application growth by 2024. Second, more exposed sectors experience lower relative price growth after 2023, in specifications that control for differential exposure to pandemic-era supply-chain stress. This price difference becomes more pronounced over time, consistent with gradual diffusion and pass-through of AI-related efficiency gains to producer prices. Moving across the interquartile range of AI exposure is associated with approximately 4.2 percentage points lower cumulative excess inflation by 2025. The paper then develops a static model of monopolistic competition with heterogeneous firms to organize the empirical findings. Within the benchmark economy, these product-market forces generate a consumer welfare dividend: lower prices raise purchasing power, while a larger mass of firms expands the set of available varieties.

“Endogenous Monetary Non-Neutrality“
Abstract: This paper develops a general equilibrium model that combines strategic complementarities with boundedly rational expectations to generate short-run non-neutrality of monetary and demand shocks with respect to real variables in line with the evidence. In sharp contrast to the previous literature and leading DSGE models, I do not impose nominal rigidities: neither in the form of a Calvo assumption, menu costs, rational inattention, etc. Instead, price inertia derives as an equilibrium outcome where firms compete for their customer base in horizontally differentiated markets and form level-k beliefs about the future prices of their competitors.

“The Surprising Force of the Accelerator“, draft coming soon
with Guido Lorenzoni
Abstract: How do demand shocks affect investment? How strong is the accelerator? This paper combines a novel measure of business investment across space with two natural experiments to address these questions. We find that business investment does endogenously respond to demand shocks, with a multiplier of around 16.11 cents per dollar, which does not seem to be explained by liquidity constraints. We find a remarkable contrast between the size of our multiplier and the predictions of a standard model of investment spending given the persistence of the underlying shocks. Our results favor models that feature an important role for the accelerator without the need of liquidity constraints.

“Productivity Hysteresis from the Great Recession”, (R&R, AEJ: Macro)

Abstract: The United States has experienced a slowdown in productivity growth for more than a decade. I exploit geographic variation across U.S. Metropolitan Statistical Areas (MSAs) to investigate the link between the 2006-2012 decline in house prices (the housing bust) and the productivity slowdown. Instrumental variable estimates support a causal relationship between the housing bust and the productivity slowdown. The results imply that one standard deviation decline in house prices translates into an increment of the productivity gap—i.e. how much an MSA would have to grow to catch up with the trend—by 6.3p.p., where the average gap is 11.53%. Using a newly-constructed capital expenditures measure at the MSA level, I find that the long investment slump that came out of the Great Recession explains a large fraction of this effect. Next, I document that the housing bust led to the investment slump and, ultimately, the productivity slowdown, mostly through the collapse in consumption expenditures that followed the bust. I construct a quantitative general equilibrium model that rationalizes these empirical findings, and find that this mechanism is behind roughly 50 percent of the productivity slowdown.

Works in Progress

“Investment, Expectations, and Business Cycles”

“Firms as a Production Factor: a New Approach to the Analysis of Potential Output”

“Firm Selection and the Efficiency of Business Cycles”

Current Teaching, 2025-2026

EC 607 Topics on Empirical Macroeconomics (2nd year PhD)

EC 607 Core Macroeconomics II (1st year PhD)

EC 313 Intermediate Macroeconomics (undergraduate, x2)