New Professor’s Research Applies Public Finance to Economic Policy
25 August 2014 1:08PM
Death and taxes have long been established as inevitabilities in life. Juan Carlos Suárez Serrato, a new member of the Duke Economics faculty, is concerned with determining the actual effects of the latter.
“Whenever you have a tax, that tax is going to change the economic equilibrium in a way that is going to affect underlying prices such as wage rates or house values,” Suárez Serrato said. “If there is a tax cut in a given area, firms are going to move in, and that’s going to raise wages (for workers) and housing prices. Therefore, the actual economic consequence of tax cuts and who benefits from them depends on this economic equilibrium.”
Suárez Serrato is joining the department as an assistant professor of economics, and he will be teaching undergraduate- and graduate-level public finance courses (ECON 438 and 881-22) this fall.
“I’m excited about teaching,” he said. “Public economics lends itself really well to integrating theory and empirical work and answering very (socially) relevant questions.” His particular style of teaching encourages students to get hands-on with real data, implementing econometric techniques and ideas from recently published research. According to Suárez Serrato, “In many situations, we can boil down a question that might seem very ideological to an empirical quantity that we can measure.”
Originally from Mexico City, Mexico, Suárez Serrato received his Ph.D. in economics from UC Berkeley, where he specialized in public finance, which looks at the role of government in the economy and the economics of public policy. He then worked at the Stanford Institute for Economic Policy Research as a postdoctoral fellow. In particular, Suárez Serrato has focused on the regional and local effects of tax and government spending policy.
“I feel what I do is very applicable to policy,” he said. His work seeks to understand fundamental questions about the economy: how much spending there should be, how to structure taxation, and, as in the aforementioned example, who really ends up benefitting from tax cuts. Some of his more recent research has delved into location decisions, analyzing the effects of state corporate taxes on firm location and the resulting equilibrium incidence on wages and profits.
Suárez Serrato first lived in Durham during the summer of 2005, when he attended the nine-week-long AEA Summer Program at Duke University. The experience made a lasting impression. “I really liked the prospect of being at Duke since then,” he said. “It was a nice experience.”
The opportunity for collaboration across campus and within the department was a big draw for Suárez Serrato’s return. “There are economists across Duke who would be really interesting to work with,” he said. “I think the department is very vibrant. There are a lot of young people in applied microeconomics and young tenured people as well. It seems like a very energetic place to be at for the kind of work that I’m doing.”
Learn more about Professor Juan Carlos Suárez Serrato at his profile page.