Le Xu

Le Xu
Job Market Paper

Supply Chain Management, Production Networks, and Aggregate Fluctuations

Over the business cycle, firms adjust not only their sales and input expenditures but also the number of suppliers from which they source from. I incorporate this extensive margin into a real business cycle model featuring input-output networks. Using a dataset of supply chain relationships among US firms, I first document that increases in the number of suppliers are correlated with increases in sales, intermediate input expenditures, total factor productivities, and costs of managing suppliers. Based on these facts, I develop a model in which firms trade off the productivity benefit (return to variety) of accessing more varieties with the (fixed) cost of managing these varieties. The extensive margin adjustment introduces a return to scale into production, which interacts with input-output networks and amplifies industry productivity shocks: In my estimated model, the effect of industry productivity shocks on GDP fluctuations is one-fourth larger than in a (conventional) model where the extensive margin is absent.

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Other Research

Land Price, Export Shocks, and Investment in China: A Tale of Two Sectors

I construct the quarterly commercial land price series using land transaction data in China and document a negative correlation between real land price and aggregate investment, as opposed to the positive correlation in the US. With sectoral productivity processes estimated, a real business cycle model with an industrial and a service sector is used to explain the negative correlation. A positive export (industrial goods) price shock increases the demand for tradable industrial goods and attracts capital and labor from the non-tradable service sector, by which only land is used. Aggregate investment rises because the industrial sector is more capital intensive. Land price, on the other hand, falls as the return to land decreases.

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Industry Heterogeneity, Production Networks, and Monetary Policy (with Zhesheng Qiu and Jianhong Xin)

Machine Learning and Financial Crises Forecasting, (with Antonio Chan-Lau, IMF, Silvia Iorgova, IMF,  and Kevin Wiseman ,IMF)

Teaching Experience

ECON-102 Intermediate Macroeconomics, University of Pennsylvania, Instructor (Summer 2017, Spring 2018)

ECON-001 Introduction to Microeconomics, University of Pennsylvania, Recitation Instructor (Fall 2015, Spring, Fall 2016, Spring 2017)

Other Information


Federal Reserve Bank of Philadelphia (2019), GCER Biennial Alumni Conference at Georgetown University (2019), Peking University (2019*), Asian Meeting of the Econometrics Society at Xiamen University (2019), Biennial Conference of China Development Studies at Shanghai Jiao Tong University (2019), University of Pennsylvania (2016-2019)

(* indicates presentation by coauthors)

Research Experience and Other Employment:

Federal Reserve Bank of Philadelphia, Philadelphia, USA, Graduate Research Analyst (2018 to present)

International Monetary Fund, Washington, DC, USA, Fund Internship Program (2018 Summer)


Returns to Dialect: Identity Exposure through Language in the Chinese Labor Market, China Economic Review, Volume 30, p. 27-43, 2011 (with Zhao Chen and Ming Lu)


Macroeconomics, Business Fluctuations, Network Economics


Department of Economics
University of Pennsylvania
133 South 36th Street, Philadelphia, PA 19104





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Jesus Fernandez-Villaverde


Jesús Fernández-Villaverde (Advisor)

Department of Economics

University of Pennsylvania




Dirk Krueger

Department of Economics

University of Pennsylvania




Harold L. Cole

Department of Economics

University of Pennsylvania




Alessandro Dovis

Department of Economics

University of Pennsylvania




Simon Freyaldenhoven

Economic Research Department

Federal Reserve Bank of Philadelphia




Job Market Candidate Status
I am on the job market and will be available for interviews during the China Job Market meetings in Beijing from 2019/12/13 to 2019/12/15, the European job market meetings in Rotterdam from 2019/12/18 to 2019/12/19, and the ASSA meetings in San Diego from 2020/1/3 to 2020/1/7.