The macroeconomics group conducts research across some of the most significant and vibrant areas in the field. The group’s general strengths are in macroeconomic theory, quantitative and computational methods, and empirical applications.
The broad research areas of interest of the group include business cycles fluctuations, international trade and economic growth, political economy, frictional labour markets, wealth and earnings heterogeneity, fiscal and monetary policies, household and firm finance, sovereign debt, real estate finance and macro-finance.
Within these themes, a variety of topics are the subject of recent and current research within the group. There is work studying the role of the labour market in the propagation of business cycle shocks on the real economy and on stock market prices. Another strand of research analyses the macroeconomic effects of skill formation policies, the welfare and employment consequences of employment protection, and the role of skills for the behaviour of unemployment and productivity during expansions and recessions.
Research within the growth and trade strand addresses the determinants of income inequality across and within countries, and the effects of institutions on economic incentives and countries’ economic performance; the effects of economic integration on economic growth, technological change, wage inequality, firm heterogeneity and the size of governments; the role of firms characteristics in shaping a country’s imports; and the impact of offshoring and technological progress on manufacturing in advanced and developing countries.
Other lines of research develop models of heterogeneous households to study, for example, the implications of earnings risk for consumption and wealth inequality, and the estimated impact shocks on the distribution of income and consumption; unsecured credit, bankruptcy risk, financial constraints, and credit market regulation; and consumption risk sharing with limited commitment. A related strand of work based on models of heterogeneous firms studies the role of uncertainty shocks on the distribution of firms and aggregate fluctuations, the role of firm insolvency risk for the dynamics of bankruptcies and investment, and the role played by risky trade credit between firms during recent recessions.
Further research studies the consequences of mortgage contracts on the aggregate economy and monetary policy within dynamic stochastic general equilibrium models, as well as the cyclical movements in the yield curve. Estimating the impact of credit supply shocks and uncertainty shocks is another focus of the group’s activities. The groups’ current agenda includes also research on the interaction between sovereign debt risk and economic fluctuations, and the role of credit-rating agencies.
In the area of macroeconomic policy, members of the group work on optimal fiscal policies, with an emphasis on the role of consumption taxation, the general structure of taxation under lack of commitment, the macroeconomic and the distributional implications of tax evasion. One focus of empirical work is on estimating the fiscal multiplier, the impact of fiscal policy on asset prices, the effect of fiscal uncertainty, and the impact of quantitative easing and of changes in the inflation target.
The group have published in leading economic journals and the top field journals including, among others, American Economic Review, Review of Economic Studies, Quarterly Journal of Economics, Journal of the European Economic Association, American Economic Journal, Economic Journal, Journal of Economic Theory, International Economic Review, European Economic Review, Review of Economics and Statistics, Review of Economic Dynamics, Journal of Monetary Economics, Journal of Economic Dynamics and Control, Review of Financial Studies, Journal of International Economics, and Journal of Development Economics. Members of the group hold or have held editorial responsibilities at the Review of Economic Dynamics, JEEA, Economic Journal and the REStud, among others.
The group’s research has obtained funding from various prestigious bodies including the Nuffield Foundation, the European Research Council, the European Commission, Netspar, NORFACE, the Bank of England, and the Economic Statistics Centre of Excellence. We also run joint projects with various government and policy-oriented institutions such as the Office for National Statistics, the Bank of England, and the Cabinet Office, Government of Japan.
The macroeconomics group have been organising the annual E1Macro workshop since 2017. We welcome applications from well-qualified candidates interested in pursuing PhD study in any of areas of macroeconomics.
- Fella G., Frache S., Koeniger W. Buffer-stock Saving and Households' Response to Income Shocks, International Economic Review (forthcoming)
- Bonfiglioli A., Gancia G. Heterogeneity, Selection and Labor Market Disparities, Review of Economic Dynamics (2019)
- D'Alessandro A., Fella G., Melosi L. Fiscal Stimulus with Learning-by-Doing, International Economic Review (2019)
- De Nardi M., Fella G., Paz-Pardo G. Nonlinear Household Earnings Dynamics, Self-Insurance, and Welfare , Journal of European Economic Association (2019)
- Fella G., Gallipoli G., Pan J. Markov-Chain Approximations for Life-Cycle Models, Review of Economic Dynamics (2019)
- Laczo S., Rossi R. Time-Consistent Consumption Taxation, Journal of Monetary Economics (forthcoming)
- Rupert P., Sustek R. On the Mechanics of New-Keynesian Models, Journal of Monetary Economics (2019)
- Seshadri A., SYT Lee. On the Integenerational Transmission of Economic Status, Journal of Political Economy (2019)
- Abraham A., Laczo S. Efficient Risk Sharing with Limited Commitment and Storage, Review of Economic Studies (2018)
- Aum S., Shin Y., SYT Lee. Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity , Journal of Monetary Economics (2018)
- Bonfiglioli A., Crinò R., Gancia G. Betting on Exports: Trade and Endogenous Heterogeneity, Economic Journal (2018)
- Bonfiglioli A., Crinò R., Gancia G. Trade, Finance and Endogenous Firm Heterogeneity, Journal of European Economic Association (2018)
- Faccini R., Konstantinidi E., Skiadopoulos G., Sarantopoulou S. A New Predictor of U.S. Real Economic Activity: The S&P 500 Option Implied Risk Aversion, Management Science (2018)
- Gierlinger J., Laczó S. Matching to Share Risk without Commitment, Economic Journal (2018)
- Santaeulàlia-Llopis R., Zheng Y. The Price of Growth: Consumption Insurance in China 1989 - 2009, American Economic Journal: Macroeconomics (2018)
- Seshadri A., SYT Lee. Economic Policy and Equality of Opportunity, Economic Journal (2018)
- De Nardi M., Fella G. Savings and Wealth Inequality, Review of Economics Dynamics (2017)
- Epifani P., Gancia G. Global Imbalances Revisited: The Transfer Problem and Transport Costs in Monopolistic Competition, Journal of International Economics (2017)
- Garriga C., Kydland FE., Sustek R. Mortgages and Monetary Policy, Review of Financial Studies (2017)
- Cozzi M., Fella G. Job Displacement Risk and Severance Pay, Journal of Monetary Economics (2016)
- Faccini R., Mumtaz H., Surico P. International fiscal spillovers, Journal of International Economics (2016)
- Kydland F., Rupert P., Sustek R. Housing Dynamics over the Business Cycle, International Economic Review (2016)
- Acemoglu D., Gancia G., Zilibotti F. Offshoring and Directed Technical Change, American Economic Journal: Macroeconomics (2015)
- Laczo S. Risk Sharing with Limited Commitment and Preference Heterogeneity: Structural Estimation and Testing, Journal of European Economic Association (2015)
- Bonfiglioli A., Gancia G. Growth, Selection and Appropriate Contracts, Review of Economic Dynamics (2014)
- Faccini R. Reassessing Labor Market Reforms: Temporary Contracts As A Screening Device, Economic Journal (2014)
- Fella G. A Generalized Endogenous Grid Method For Non-Smooth And Non-Concave Problems, Review of Economic Dynamics (2014)
- Fella G., Gallipoli G. Education and Crime over the Life Cycle, Review of Economic Studies (2014)
- Laczo S. Does Risk Sharing Increase with Risk Aversion and Risk when Commitment is Limited?, Journal of Economic Dynamics and Control (2014)
- Mateos-Planas X., Seccia G. Consumer bankruptcy with complete markets, Journal of Economic Theory (2014)
- Bonfiglioli A., Gancia G. Uncertainty, Electoral Incentives and Political Myopia, Economic Journal (2013)
- Henriksen E., Kydland FE., Šustek R. Globally Correlated Nominal Fluctuations, Journal of Monetary Economics (2013)
- Acemoglu D., Gancia G., Zilibotti F. Competing Engines of Growth: Innovation and Standarization, Journal of Economic Theory (2012)
- Bonfiglioli A. Investor Protection and Inequality: Risk Sharing vs Risk Taking, Journal of Development Economics (2012)
- Di Pace F., Faccini R. Deep habits and the cyclical behaviour of equilibrium unemployment and vacancies, Journal of Economic Dynamics and Control (2012)
- Šustek R. Monetary Business Cycle Accounting, Review of Economic Dynamics (2011)
- Šustek R. Plant-Level Nonconvex Output Adjustment And Aggregate Fluctuations, Journal of Monetary Economics (2011)
- Epifani P., Gancia G. Trade, Markup Heterogeneity and Misallocations, Journal of International Economics (2011)
- Faccini R., Ortigueira S. Labor market volatility in the search and matching model: the role of investment-specific technology shocks, Journal of Economic Dynamics and Control (2010)
- Mateos-Planas X. Demographics And The Politics Of Capital Taxation In A Life-Cycle Economy, American Economic Review (2010)
- Sustek R. Monetary Aggregates And The Business Cycle, Journal of Monetary Economics (2010)