Want to read a great JMP in macroeconomics?
Check out Adrien's JMP (@adriencouturier.bsky.social), coauthored with Marco (@mbellif.bsky.social).
They uncover a new channel through which fiscal policy shapes the economy: firms' sentiment.
More amazing work here: adriencouturier.com
NEW EPISODE:
We speak to the legend Emi Nakamura about her paper at Jackson Hole about why and when central banks can deviate from Taylor Rule orthodoxy and still achieve good inflation outcomes.
podcasts.apple.com/us/podcast/e...
Forthcoming in the AER: "Downward Rigidity in the Wage for New Hires" by Jonathon Hazell and Bledi Taska. www.aeaweb.org/articles?id=...
Want to avoid ripple effects on inflation and GDP from tariffs (and retaliation)? Exempt intermediate inputs.
Check out our Working Paper (joint with C. Montes-Galdon and G. Stamato)! 🧵1/6
"two first-rate economists, David Cutler and Ed Glaeser, have made a stab at estimating the impact of cuts at NIH. Their analysis suggests that these cuts might save $500 billion in federal spending over the next 25 years — while imposing more than $8 trillion in losses."
New at JIE: "Monetary Unions with Heterogeneous Fiscal Space", by Marco Bellifemine (@mbellif.bsky.social), Adrien Couturier (@adriencouturier.bsky.social), Rustam Jamilov (@rustamjamilov.bsky.social)
New Harvard alum group formed to fight back and form alliances with other unis
See link about an online organizing event this week
www.crimsoncourage.com
If at this point you’re still saying that this is remotely related to antisemitism or viewpoint diversity, you are part of the problem.
The much improved draft of "The Regional Keynesian Cross" with @mbellif.bsky.social and @adriencouturier.bsky.social is now available online.
Link: users.ox.ac.uk/~econ0628/Re...
Overjoyed to see my article in press at the Journal of Monetary Economics! 🎉
Here’s the paper: doi.org/10.1016/j.jm...
And here’s a summary thread from the earlier (working paper) version:
bsky.app/profile/nico...
A few additional thoughts and some thanks 1/5
🚨 New paper🚨
Liquidity crises have become common in the non-bank financial sector. One reason is LASH risk.
With awesome coauthors Laura Alfaro, Saleem Bahaj, Robert Czech and Ioana Neamtu
#econsky
(1/11)
Last call for the "Macro at LSE" predoc opportunity - apply THIS WEEK if you would like to work in London on cutting-edge macro with Ben Moll, Joe Hazell, Ethan Ilzetzki, Ricardo Reis, and me!
t.co/cBdznWii1Y
@econ_ra #EconSky @benmoll.bsky.social
New here and happy to share my job market paper!
"Bad Bank, Bad Luck? Evidence from 1 Million Firm-Bank Relationships"
We build a large novel dataset on US firm-bank relationships to ask the question “How do bank failures affect small business survival and employment?”
A🧵summarizing our findings:
New paper: benjaminmoll.com/challenge/
🚨 Excited to share my job market paper!
“Cash transfers and women’s labour supply: evidence from the world’s largest programme” (drive.google.com/file/d/1ksDE...)
It has been awarded the EEA/Unicredit Foundation’s Best JMP Award.
A thread summarising my findings 👇: (1/13)
Our model is portable and can be applied to different contexts. See for example our follow-up paper:
𝐌𝐨𝐧𝐞𝐭𝐚𝐫𝐲 𝐔𝐧𝐢𝐨𝐧𝐬 𝐰𝐢𝐭𝐡 𝐇𝐞𝐭𝐞𝐫𝐨𝐠𝐞𝐧𝐞𝐨𝐮𝐬 𝐅𝐢𝐬𝐜𝐚𝐥 𝐒𝐩𝐚𝐜𝐞
just R&R at the JIE.
11/11
Finally, we study aggregate implications. As the national Keynesian cross shows, the aggregate effects of regional heterogeneity depend on the sorting between MPCs & non-tradable share ➡️ different geographies lead to different amplification. See 👇: US vs Italy
10/11
The model is also able to successfully replicate the empirics. We run our empirical regressions on model-generated data and show that the results are consistent with the patterns observed in the data.
9/11
We compute IRFs for the 3,140 calibrated counties. Our model generates large cross-county dispersion in the employment response to monetary policy shocks.
8/11
We discipline our theory with our data and calibrate the model to the universe of 3,140 US counties.
We select three real-life counties and conduct a model-based narrative analysis of the regional transmission mechanism of MP.
7/11
In the data, we find that:
1. Counties that have a higher share of non-tradable employment or a higher MPC are more responsive to MP shocks.
2. MPCs and non-tradable employment interact positively in shaping this response.
6/11
To validate our model empirically, we construct novel measures of county-level MPCs in the US and Italy.
We make the data publicly available here: regionalkeynesiancross.com
5/11
We move beyond county-level analysis. The regional Keynesian cross is non-linear in MPCs & trade openness ➡️ distributions matter for aggregates.
Result 2⃣: the national Keynesian cross, an analytical characterization of the national consumption response in terms of regional heterogeneity.
4/11
We build a multi-region HANK model with cross-county heterogeneity in (i) MPCs & (ii) trade openness.
Result 1️⃣: the Regional Keynesian Cross. It characterizes a county's response to MP as a function of MPCs & non tradable income share.
At its heart: a regional Keynesian multiplier.
3/11
Motivation: US monetary policy has widely different effects across counties. We ask two questions:
1. What can explain this?
2. Does it matter for the national transmission of monetary policy?
2/11
🚨 Paper update 🚨
𝗧𝗵𝗲 𝗥𝗲𝗴𝗶𝗼𝗻𝗮𝗹 𝗞𝗲𝘆𝗻𝗲𝘀𝗶𝗮𝗻 𝗖𝗿𝗼𝘀𝘀 - with
@adriencouturier.bsky.social & @rustamjamilov.bsky.social
Does regional heterogeneity matter for monetary policy? We provide a theoretical, empirical & quantitative investigation.
Link: dropbox.com/scl/fi/injql...
Thread🧵
1/11
#EconSky