Yeji Sung

I'm an economist at the Federal Reserve Bank of San Francisco. I received my Ph.D. in Economics from Columbia University in 2023.

My research interests are in macroeconomics, monetary economics, and behavioral economics. In recent works, I have studied expectations formations and their macroeconomic and financial implications.

Here is my CV.

You can contact me at yeji.sung@sf.frb.org.

Working Papers

Macroeconomic Expectations and Cognitive Noise

This paper examines forecast biases through cognitive noise, moving beyond the conventional view that frictions emerge solely from using external data. By extending Sims’ (2003) imperfect attention model to include imperfect memory, it proposes a framework where cognitive constraints impact both external and internal information use. This innovation reveals horizon-dependent forecast sensitivity: short-term forecasts adjust sluggishly while long-term forecasts may over-react. The paper explores the macroeconomic impact of this behavior, showing how long-term expectations, heavily influenced by current economic conditions, heighten inflation volatility. Moreover, structural estimation indicates that neglecting im- perfect memory critically underestimates the informational challenges forecasters encounter.

Published Papers

Optimally Imprecise Memory and Biased Forecasts (with Rava Azeredo da Silveira and Michael Woodford)

American Economic Review, 114 (10): 3075–3118, October 2024

We propose a model of optimal decision-making subject to a memory constraint in the spirit of models of rational inattention. Our theory differs from that of Sims (2003) in not assuming costless memory of past cognitive states. The model implies that both forecasts and actions will exhibit idiosyncratic random variation; that average beliefs will exhibit a bias that fluctuates forever; and that more recent news will be given disproportionate weight in forecasts. The model provides a simple explanation for the overreaction to news observed in the laboratory by Afrouzi et al. (2023).

Teaching

At Columbia University, I was a teaching assistant for

Money and Banking (2019)
The Psychology and Economics of Consumer Finance (MBA; 2018,2019)
International Trade (2017)

At Seoul National University, I was a teaching assistant for

Advanced Macroeconomics (PhD)
Applied Macroeconomics (PhD)
Macroeconomics
Microeconomics
Principles of Economics
Introductory Statistics for Economists

Policy Pieces

The impact of TLTOR2 on the Italian credit market: some econometric evidence, Feb. 2020

with Lucia Esposito and Davide Fantino

Bank of Italy Temi di discussione No. 1264

This work evaluates the impact of the second series of Targeted Longer-Term Refinancing Operations (TLTRO2) on credit market conditions for Italian firms. The estimates use a difference-in-differences approach on quarterly data, including term loans, interest rates, and bank and firm characteristics, between the start of 2015 and the end of 2017. The TLTRO2 had a positive impact on credit, encouraging lending to firms and reducing interest rates. The impact on the amount of credit was stronger for less risky firms, while that on interest rates was stronger for riskier ones. Smaller firms benefited more in terms of both loan amounts and interest rates.