Trace Oblivious Program Execution

The big data era has dramatically transformed our lives; however, security incidents such as data breaches can put sensitive data (e.g. photos, identities, genomes) at risk. To protect users' data privacy, there is a growing interest in building secure cloud computing systems, which keep sensitive data inputs hidden, even from computation providers. Conceptually, secure cloud computing systems leverage cryptographic techniques (e.g., secure multiparty computation) and trusted hardware (e.g. secure processors) to instantiate a “secure” abstract machine consisting of a CPU and encrypted memory, so that an adversary cannot learn information through either the computation within the CPU or the data in the memory. Unfortunately, evidence has shown that side channels (e.g. memory accesses, timing, and termination) in such a “secure” abstract machine may potentially leak highly sensitive information, including cryptographic keys that form the root of trust for the secure systems. This thesis broadly expands the investigation of a research direction called trace oblivious computation, where programming language techniques are employed to prevent side channel information leakage. We demonstrate the feasibility of trace oblivious computation, by formalizing and building several systems, including GhostRider, which is a hardware-software co-design to provide a hardware-based trace oblivious computing solution, SCVM, which is an automatic RAM-model secure computation system, and ObliVM, which is a programming framework to facilitate programmers to develop applications. All of these systems enjoy formal security guarantees while demonstrating a better performance than prior systems, by one to several orders of magnitude.

Essays on Information Frictions, Prices and Unemployment

I investigate the effects of information frictions in price setting decisions. I show that firms' output prices and wages are less sensitive to aggregate economic conditions when firms and workers cannot perfectly understand (or know) the aggregate state of the economy. Prices and wages respond with a lag to aggregate innovations because agents learn slowly about those changes, and this delayed adjustment in prices makes output and unemployment more sensitive to aggregate shocks. In the first chapter of this dissertation, I show that workers' noisy information about the state of the economy help us to explain why real wages are sluggish. In the context of a search and matching model, wages do not immediately respond to a positive aggregate shock because workers do not (yet) have enough information to demand higher wages. This increases firms' incentives to post more vacancies, and it makes unemployment volatile and sensitive to aggregate shocks. This mechanism is robust to two major criticisms of existing theories of sluggish wages and volatile unemployment: the flexibility of wages for new hires and the cyclicality of the opportunity cost of employment. Calibrated to U.S. data, the model explains 60% of the overall unemployment volatility. Consistent with empirical evidence, the response of unemployment to TFP shocks predicted by my model is large, hump-shaped, and peaks one year after the TFP shock, while the response of the aggregate wage is weak and delayed, peaking after two years. In the second chapter of this dissertation, I study the role of information frictions and inventories in firms' price setting decisions in the context of a monetary model. In this model, intermediate goods firms accumulate output inventories, observe aggregate variables with one period lag, and observe their nominal input prices and demand at all times. Firms face idiosyncratic shocks and cannot perfectly infer the state of nature. After a contractionary nominal shock, nominal input prices go down, and firms accumulate inventories because they perceive some positive probability that the nominal price decline is due to a good productivity shock. This prevents firms' prices from decreasing and makes current profits, households' income, and aggregate demand go down. According to my model simulations, a 1% decrease in the money growth rate causes output to decline 0.17% in the first quarter and 0.38% in the second followed by a slow recovery to the steady state. Contractionary nominal shocks also have significant effects on total investment, which remains 1% below the steady state for the first 6 quarters.