Faculty Spotlight

Junghoon LeeJunghoon Lee

Assistant Professor of Economics

Junghoon Lee is an assistant professor in economics at Emory University. He received his BS degree in physics and MA in economics from Seoul National University, Korea, and a PhD in economics from the University of Chicago. His areas of specialization are macroeconomics and asset pricing. His research focuses on the fundamental sources of risk or shocks in the economy and how these shocks affect the macroeconomy through their effects on asset prices and investment decisions. Examples of his research are as follows.

The depressing effect of uncertainty has recently drawn much attention. In uncertain times, firms want to preserve flexibility by delaying new investment, thereby leading to economic contractions. This reasoning, however, assumes firms already have options to invest and focus only on whether or not they should keep those options open for the future. In "The Impact of Idiosyncratic Uncertainty When Investment Opportunities Are Endogenous," Professor Lee argues that options to invest are also the outcome of firms" different types of investment, such as research and innovation. Therefore, when times are uncertain, firms want to also create more investment options or flexibility. Professor Lee develops a model economy to show that the latter positive effect of uncertainty can dominate, leading to economic expansions.

The article "On the Dispersion Measure of Idiosyncratic Uncertainty" reexamines some empirical evidence in the uncertainty literature. Idiosyncratic uncertainty is often measured by the cross-sectional dispersion of firm-level activity. Professor Lee finds that a substantial part of time variation in the cross-sectional dispersion is driven by the heterogeneous response of firms to common shocks rather than the time-varying size of idiosyncratic shocks, where only the latter represents idiosyncratic uncertainty. Professor Lee also finds that although reduced in size, the countercyclical pattern of dispersion still remains significant.

Technological change is a major driver of economic growth, but there are different views in economics about its nature. One view emphasizes that knowledge is easily shared and spread, whereas the other underscores the competitive aspect of innovations; only those firms that are able to adapt to the new knowledge survive. In "Technological Change and Reallocation," Professor Lee finds that innovation induces a large transfer of labor and capital between firms, supporting a Schumpeterian view of disruptive technological progress.

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