Oleg Itskhoki (born inMoscow on January 7, 1983)[1] is a Russian-Americaneconomist specialized onmacroeconomics andinternational economics and (as of 2024) a professor of economics at theHarvard University. He won theJohn Bates Clark Medal for his "fundamental contributions to bothinternational finance andinternational trade" in 2022.[2]
Born in Moscow in 1983, Oleg Itskhoki earned hisB.A. in economics from theMoscow State University in 2003, followed by aM.A. in economics from theNew Economic School in 2004. He then pursuedPhD studies in economics atHarvard University, graduating in 2009 with a dissertation on the relationship between international trade and unemployment, inequality and redistribution under the advisorship ofElhanan Helpman,Gita Gopinath,Aleh Tsyvinski andPol Antras.[3] After his studies, Itskhoki worked as a professor of economics and international affairs atPrinceton University, including as an Alfred P. Sloan Research Fellow in 2015–2017. In 2019, he moved to theUniversity of California, Los Angeles, where he was honoured with the Venu and Ana Kotamraju Endowed Chair in Economics in 2020.[4] Additionally, Itskhoki works an associate editor for theAmerican Economic Review, as a research associate at theNational Bureau of Economic Research (NBER), and as a research affiliate at theCentre for Economic Policy Research (CEPR).
Oleg Itskhoki's research interests include the impacts of international trade on labour markets, exchange rate disconnect, and exchange rate pass-through, among else.[5] According toIDEAS/RePEc, Itskhoki ranks among the top 3% of economists in terms of research output.[6]
In a key part of his research, Itskhoki, Elhanan Helpman andStephen Redding develop a framework wherein more productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity, resulting in a setting where trade liberalization can either raise or reduce unemployment but always increaseswage inequality relative toautarky.[7] Building on this model, Itskhoki, Helpman, Redding and Marc-Andreas Muendler find that firm employment size and trade participation are related to wage dispersion between firms, which drives the component of wage inequality within sectors and occupations, with the resulting distribution of wages and employment inBrazilian linked employer-employee data closely approximated by Helpman, Itskhoki and Redding's 2010 model.[8] Moreover, in earlier work Itskhoki and Helpman have explored how labour market rigidities in a two-country, two-sector model of international trade affects unemployment.[9]
Another part of Itskhoki's research deals international finance and especially with analyses ofexchange-rate pass-through, a measure of how much import prices in local currency change in reaction to changes in the price of foreign currency in the local currency (the exchange rate). For instance, Itskhoki andGita Gopinath find that import prices tend to be more sensitive to exchange rate fluctuations the more often prices adjust, which they attribute to firms being reluctant to frequently adjust prices since variable price mark-ups - which tend to reduce long-run pass-through - would also reduce profits.[10] In another paper co-authored by Itskhoki and Gopinath withRoberto Rigobon, they find that, even conditional on a price change, exchange-rate pass-through depends the choice of the currency in which goods are priced both across countries and within disaggregated sectors, thereby contradicting the assumption that the currency of pricing is exogenous, suggesting that currency choice in a dynamic price setting environment needs to be modelled endogenously.[11] Together withMary Amiti andJozef Konings, Itskhoki has also shown that small non-importing firms have nearly complete exchange rate pass-through, whereas large import-intensive exporters have pass-through of ca. 50%, which explains why one may observe both low aggregate exchange rate pass-through among firms and strong variation in pass-through across exporting firms.[12] Finally, in a paper withDmitry Mukhin, building on the insight that financial market noise - instead of economic fundamentals - may be a key driver of exchange rate dynamics, Itskhoki develops a real business cycle model of exchange rate determination, which - when enriched with features such as home bias in consumption and combined with productivity and monetary shocks - can account for all major exchange rate puzzles (Meese-Rogoff exchange rate forecasting puzzle,Backus-Smith puzzle, purchasing power parity puzzle, uncovered interest rate puzzle) while fitting empirical business cycle behaviour.[13] A similar insight is also used by Itskhoki and Mukhin to explain theMussa puzzle.[14]
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