About

Boragan Aruoba is a Professor in the Department of Economics at the University of Maryland. He received his PhD from the University of Pennsylvania in 2004 and joined the faculty at Maryland that same year. His research interests encompass macroeconomics with both theoretical and empirical approaches. On the theoretical side, his recent work focuses on the dynamics of an economy when it is at the zero lower bound of nominal interest rates and explores nonlinearities in macroeconomic models. Empirically, he works on understanding the statistical properties of data revisions, the yield curve, and factor models. His contributions include developing indices for tracking business cycles, new measures of GDP, and the term structure of inflation expectations, which are implemented by the Federal Reserve Bank of Philadelphia. His research has been published in several leading economic journals, including the Review of Economic Studies, Journal of Economic Theory, and Journal of Monetary Economics. He teaches macroeconomics at various levels and computational methods, and his work has received support from the National Science Foundation.

Research topics

• Economics
• Macroeconomics
• Monetary economics
• Algorithm
• Mathematics
• Public economics
• History
• Applied mathematics
• Econometrics
• Mathematical optimization
• Keynesian economics
• Statistics
• Microeconomics

Selected publications

• Professional forecasters and markets: the term structure of inflation expectations

  Edward Elgar Publishing eBooks · 2025-06-03

  book-chapter1st authorCorresponding
  PublisherDOI

• The Long and Variable Lags of Monetary Policy: Evidence from Disaggregated Price Indices

  National Bureau of Economic Research · 2024-06-01

  reportOpen access1st authorCorresponding
  PublisherDOI

• Pricing Under Distress

  SSRN Electronic Journal · 2024-01-01 · 3 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

• The long and variable lags of monetary policy: Evidence from disaggregated price indices

  Journal of Monetary Economics · 2024-07-20 · 14 citations

  articleOpen access1st author

  We study how monetary policy affects subcomponents of the Personal Consumption Expenditures Price Index (PCEPI) using local projections. Following a monetary policy contraction, the response of aggregate PCEPI turns significantly negative after over three years. There are stark differences in the timing and magnitude of the responses across price categories, including some prices that show an initially positive response. We discuss theoretical interpretations of our findings and point to useful directions for future theoretical research. We also show how to re-aggregate our cross-sectional estimates and their standard errors, taking into account dependence between different prices using a Seemingly Unrelated Regression approach. Re-aggregation exercises show that changes in expenditure behavior have not accelerated the long-lagged response of inflation to monetary policy.

  PublisherDOI

• The Long and Variable Lags of Monetary Policy: Evidence from Disaggregated Price Indices

  SSRN Electronic Journal · 2024-01-01 · 4 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

• Identifying Monetary Policy Shocks: A Natural Language Approach

  National Bureau of Economic Research · 2024-05-01 · 68 citations

  reportOpen access1st authorCorresponding

  We develop a novel method for the identification of monetary policy shocks. By applying natural language processing techniques to documents that Federal Reserve staff prepare in advance of policy decisions, we capture the Fed's information set. Using machine learning techniques, we then predict changes in the target interest rate conditional on this information set and obtain a measure of monetary policy shocks as the residual. We show that the documents' text contains essential information about the economy which is not captured by numerical forecasts that the staff include in the same documents. The dynamic responses of macro variables to our monetary policy shocks are consistent with the theoretical consensus. Shocks constructed by only controlling for the staff forecasts imply responses of macro variables at odds with theory. We directly link these differences to the information that our procedure extracts from the text over and above information captured by the forecasts.

  PublisherDOI

• Identifying Monetary Policy Shocks: A Natural Language Approach

  SSRN Electronic Journal · 2024 · 14 citations

  1st authorCorresponding
  • Economics
  • Monetary economics
  • Macroeconomics
  PublisherDOI

• Non-Constant Demand Elasticities, Firm Dynamics and Monetary Non-Neutrality: Role of Demand Shocks

  SSRN Electronic Journal · 2024-01-01 · 2 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

• Reviving Micro Real Rigidities: The Importance of Demand Shocks

  National Bureau of Economic Research · 2024-05-01 · 1 citations

  reportOpen access1st authorCorresponding

  We develop a simple menu-cost model with non-constant elasticity of demand that features idiosyncratic productivity and demand shocks.The model is calibrated to match firm-level productivity and demand processes estimated from U.S. data.Despite its simplicity, the calibrated model delivers untargeted pricing dynamics and a markup distribution that are consistent with U.S. micro data.Moreover, it also generates sizable monetary non-neutrality that rivals more complicated alternative menu cost models that explicitly target pricing dynamics.The key in reconciling firm and pricing dynamics comes from the interaction between non-constant elasticity of demand and idiosyncratic demand shocks.Thus, this framework effortlessly unifies pricing, markup, and firm dynamics.

  PublisherDOI

• Pricing Under Distress

  National Bureau of Economic Research · 2024-06-01 · 3 citations

  reportOpen access1st authorCorresponding

  We isolate the anticipation effect of uncertainty on firms’ price-setting behavior using a quasi-natural experiment: the 2019 Social Uprising in Chile. During the 31-day period following the outbreak of nationwide protests and riots, the frequency of supermarket price changes fell by about half, while the average size of adjustments rose by about half. Suppliers’ prices remained stable, and local intensity of riots does not explain the variation, suggesting a forward-looking mechanism. A menu cost model with news about future idiosyncratic demand volatility replicates these dynamics. Anticipated uncertainty amplifies the short-run real effects of monetary policy, highlighting the importance of timing.

  PublisherDOI

Recent grants

• Collaborative Research: Monetary DSGE Models at the Zero Lower Bound: Policy Analysis and Econometric Inference

  NSF · $225k · 2014–2018

Frequent coauthors

• Frank Schorfheide

  National Bureau of Economic Research

  59 shared

• Francis X. Diebold

  40 shared

• Randall Wright

  Wisconsin School of Professional Psychology

  30 shared

• Jesús Fernández‐Villaverde

  27 shared

• Morris A. Davis

  Rutgers, The State University of New Jersey

  13 shared

• Pablo Cuba‐Borda

  Federal Reserve

  11 shared

• Juan Francisco Rubio-Ramı́rez

  11 shared

• Chiara Scotti

  Federal Reserve Bank of Dallas

  9 shared

Labs

• ECON Department of Economics, University of MarylandPI

Awards & honors

• Supported by National Science Foundation