N.D. Andy Lehrer
Welcome! I am a Ph.D. candidate in economics at the University of Wisconsin-Madison.
My main research interests are international macro/finance, international trade, and firm dynamics.
Academic CV | Professional Resume
I study how firms set their prices in international markets in reaction to policy uncertainty, tariff changes, and exchange rate fluctuations. My interests include sovereign debt, monetary policy in open economies, and political economics.
As a policy-oriented, data-driven macroeconomist, I combine structural modeling, quantitative methods, and design-based econometrics.
Before moving to Madison, I was a research economist in the Banking and Finance team at the Israel Competition Authority and a research & data analyst in the Financial Division at the Bank of Israel.
I hold an M.A. in economics and a B.A. in philosophy, politics, and economics (PPE) from the Hebrew University of Jerusalem.
Working Papers
This paper studies how trade policy uncertainty (TPU) affects the pass-through of import tariff and exchange rate changes into import prices. Little is known about the effects of tariff changes accompanied by TPU on import prices, especially when price rigidities are present. Using a dynamic model of exporting with costly price adjustments and variable markups, I show that TPU significantly increases tariff pass-through into the tariff-inclusive import price. TPU raises tariff pass-through via two channels relative to a one-time permanent tariff increase. First, TPU decreases the likelihood of costly price adjustment on impact (“wait-and-see” effect), which immediately induces high tariff pass-through. Second, TPU leads exporters to set higher markups due to a precautionary pricing motive, resulting in higher tariff pass-through even after prices are adjusted. Conversely, exchange rate pass-through is unaffected by TPU and remains low and incomplete. Quantitatively, high TPU accounts for half of the gap between the puzzling complete pass-through estimated for U.S. tariffs on China in 2018-2019 into U.S. import prices and the prediction of a standard model without TPU, increases tariff deadweight loss by 51% and increases the share of tariff incidence borne by U.S. importers by 36%.
Work in Progress
Uniform pricing in international trade
I study why some exporters choose to set a uniform price for multiple destinations while others price-to-market. Evidence from the U.S. and the U.K. suggest many exporters set a uniform price. The choice of uniform pricing and its macroeconomic implications are still poorly understood, even at the sub-national level. I build a dynamic model of exporting with costly information acquisition. Learning about domestic conditions in each destination incurs a fixed cost. Small, less productive firms choose not to pay this cost by setting a uniform price rather than maintaining a price list. Uniform pricing reduces the impact of country-specific shocks on the price for prolonged periods, leading to incomplete exogenous shocks pass-through into import prices. This finding presents a novel explanation for incomplete exchange rate pass-through vis-a-vis high tariff pass-through into tariff-inclusive import prices.
Permanent vs. transitory exchange rate shocks and their pass-through into import prices
Monetary policy in a small open economy with multiple invoicing currencies
Monetary policy regime, domestic debt, and external debt in emerging economies (with Julio Mereb)
Published Papers
The value of political connections in a multiparty parliamentary democracy: evidence from the 2015 elections in Israel, European Journal of Political Economy 53 (2018): 13-58.
This study uses the 2015 legislature elections in Israel in order to estimate how the market evaluates political connections. Using the political connectedness of boards of directors and senior executives in all the public firms in Israel to identify political connections, the study estimates the impact of the electoral outcomes on the cumulative abnormal returns of firms listed in the Tel Aviv Stock Exchange (TASE) in the days following the elections. Results indicate that political connections had little impact on cumulative abnormal returns in the estimation period. However, some sectors reacted in a robust and statistically significant manner. In particular, gas and oil firms' stock prices showed a notably higher and positive abnormal return. While the effect of the electoral outcomes on specific sectors indicates that the Israeli stock market does evaluate political outcomes through asset prices, the market's lack of responsiveness to political connections after the 2015 elections could indicate that political connections do not carry financial value in the Israeli stock market. This unique result is attributed to the institutional and political system in the country.
Policy Reports & Research
"Competition in the Retail Brokerage Market", Israel Competition Authority and Israel Securities Authority: August 2019 (Hebrew)
Executive summary in English in OECD 2019 Annual Report on Competition Policy Developments in Israel (pp. 19-20)
"Bond Offerings by Foreign Companies in Israel". In Financial Stability Report (pp. 36-41), Bank of Israel: December 2014