Research

Work in progress

The Welfare Costs of Distortions with Imperfectly Contestable Markets

with Anthony Savagar

Studies how distortions such as markups and returns to scale affect welfare when firm entry is slow to erode quasi rents. Presents evidence that entry speed differs across US industries: hospitality adjusts quickly, construction slowly. A dynamic entry model suggests sluggish entry increases the welfare costs of these distortions.

PDF hosted on lb.lt. Link to be added.

E-LITMAS: A Climate Model for the Baltics

with Patrick Grüning

E-LITMAS extends LITMAS with a full energy sector, modelling fossil fuels alongside green and brown energy production. The model is calibrated separately for Latvia and Lithuania, and assesses the transition effects of climate specific fiscal and macroprudential policies.

Work in progress

Capital Portfolio, Collateral Constraints and the Measured Efficiency Wedge

with Alfred Duncan

A general equilibrium model with differentiated, substitutable capital assets, where financing depends on balance sheet composition. After a negative financial shock, firms shift from expensive long term assets to easily financed short term assets. This reallocation appears to raise measured TFP, with supporting evidence in US data.

View on SSRN

Ongoing

LITMAS

LIThuanian Model for Analysis of Scenarios

LITMAS is a large scale estimated DSGE model that Stefan Girstmair and I build, estimate, modify, and update at Lietuvos Bankas. Alongside NMCM, our semistructural model, it feeds into the Bank's regular forecasting rounds, and I use it to construct policy scenarios on whatever is most relevant at the time, from oil price paths to government budget analysis.

Ongoing

E-LITMAS

Energy LITMAS

An extended version of LITMAS with a full energy sector, modelling fossil fuels alongside green and brown energy production. I calibrate and maintain E-LITMAS as a simulation and scenario analysis tool for climate and energy policy questions, and recently used it to model energy price shock scenarios stemming from the crisis in the Middle East.

An Ex-Ante Assessment of the Proposal to Reform the Second Pillar of the Lithuanian Pension System

with Karolis Bielskis, Federica Brenna, Jose Garcia-Louzao, and Stefan Girstmair · Lietuvos Bankas Occasional Paper No. 57/2025

An assessment of the proposal to allow withdrawals from the second pillar of the Lithuanian pension system, made ahead of the policy taking effect. We quantify the medium term macroeconomic impact of alternative withdrawal scenarios using LITMAS, and assess the long run consequences for pension replacement rates.

Read the paper

In progress

The Demography of Currency Unions

with Swapnil Singh

Countries inside a currency union age at different rates, and this project asks how that affects the way a common monetary policy transmits across members. We combine an exact demographic transition with a structural general equilibrium block to capture this cross country demographic heterogeneity, and are extending the model toward structural reinforcement learning policy experiments. Eventually, it will grow into a two country HANK OLG currency union model for policy analysis.