Yang Gao

Education

University of California, Santa Barbara
Ph.D. in Economics, Expected 2025
Committee: Peter Rupert (Chair), Yueyuan Ma, Gregory Casey

Renmin University of China
B.A. in Economics, 2019

University of California, Davis
Exchange Student, 2017-2018

Working Papers

Energy Efficiency Dynamics and Climate Policy
(Joint with Gregory Casey)
Funded by NSF Grant SES-2315408. Under review.

Abstract: We study the effectiveness of climate change mitigation policies in reducing carbon emissions, focusing on the channel of economy-wide energy efficiency. Using U.S. data, we estimate impulse response functions (IRFs) that characterize how energy efficiency responds to energy price shocks. Standard climate-economy models cannot replicate the slow transition dynamics observed in the data. We build a tractable model that nests the existing literature and can closely replicate the empirical IRFs. The slow dynamics in our model imply that carbon taxes reduce emissions less than predicted by standard models and that clean energy subsidies reduce emissions more than predicted by standard models.

Work In Progress

Capital Misallocation and Climate Policy
(Solo Author, Job Market Paper, Draft Available Upon Request)

Abstract: I study optimal climate policy in the context of firm capital misallocation. Empirical evidence indicates that capital distortions are negatively correlated with emissions intensity among U.S. public firms. I develop a climate-economy model featuring heterogeneous firms, where cleaner firms face disproportionately greater capital disincentives compared to dirtier firms. The model shows that a carbon tax can enhance aggregate total factor productivity (TFP) by reallocating resources more efficiently. As a result, when both climate externalities and capital misallocation are present, the second-best optimal carbon tax exceeds the traditional Pigouvian benchmark. Furthermore, the model demonstrates that addressing capital market distortions can lower the emissions intensity of the aggregate economy. Calibrated to U.S. data, the second-best carbon tax is estimated to be 2.7 times higher than the Pigouvian rate. Quantitatively, eliminating financing barriers in the capital market reduces aggregate emissions and emissions intensity by 7% and 8% respectively.

Macroeconomic Evidence on Substitution Between Clean and Dirty Energy
(Joint with Gregory Casey)
Funded by NSF Grant SES-2315408.

Research Experience

Research Assistant for Prof. Tamma Carleton, UC Santa Barbara (Feb 2021 - Sep 2022)
Research Assistant for Prof. Christopher M. Meissner, UC Davis (Apr 2018 - Jul 2018)

Selected Awards and Honors

• Summer Dissertation Fellowship, UCSB 2024
• Economics Graduate Research Quarter Fellowship, UCSB 2024
• Best Second-Year Research Paper Award, UCSB 2022
• Gretler Foundation Fellowship, UCSB 2022
• Distinction in Ph.D. Preliminary Qualifying Examination - Macroeconomics, UCSB 2020
• National Scholarship (Top 0.2% Nationwide - Highest Honor for Chinese Undergraduates), RUC 2018
• Academic Perfection Recognition (All A+'s in 9 Courses), UCD 2018
• Chancellor's Exchange Student Scholarship, RUC 2017
• Academic Scholarship, RUC 2016, 2017

Teaching Assistant

• ECON 204C. Macroeconomic Theory III (Ph.D. Level), S2021
• ECON 181. International Finance, W2024
• ECON 101. Intermediate Macroeconomic Theory (Head TA), W2021, W2022, S2022, W2023, S2023
• ECON 180. International Trade, F2021, F2022, F2023
• PSTAT 109. Statistics for Econ, F2020
• ECON 2. Principles of Economics - Macro, W2020, S2020
• ECON 10A. Intermediate Microeconomic Theory, F2019