What do you currently work on? Please state the research question and what you expect to learn from your research.
My research focuses broadly on macroeconimc policy, including monetary and fiscal policy with a particular focus on the importance of household heterogeneity. For example, in one ongoing project I ask how we should optimally design consumer bankruptcy policy taking into account both standard trade-offs between credit supply and insurance and the role that consumer bankruptcy plays in macroeconomic stabilization.
ECONtribute’s goal is to advance a new paradigm for the analysis of markets & public policy. In your mind, what are the key societal challenges? And how can economists answer to these?
One of the key challenges facing society today is to ensure that the gains from global growth are shared equitable across the population – namely, prosperity should come with inclusive growth. A large body of research has documented empirically that various segments of the population have been left behind with, e.g., technological progress, trade liberalization and changes in other fiscal policy. The field of macro has been dominated for the past several decades by representative-agent dynamic stochastic general equilibrium (DSGE) models–models whose main elements are derived from microeconomic theory, but that are inconsistent with vast empirical micro evidence on consumer behaviour. We can do better. We can develop rich macroeconomic models that are not only micro-founded, but also micro-consistent–that is consistent with empirical microeconomic evidence on household behaviour and outcomes. This new paradigm can be used to ensure we have sustainable, inclusive growth.
What are the implications of your own research for policymaking and/or for our understanding of society and the economy?
My research has had direct policy implications for a wide variety of government fiscal policies. For example, my research mentioned in the first question has direct implications for how governments should set consumer default policy. I have also studied the optimal provision of unemployment insurance over the business cycle. In ongoing research I’m also studying the role of government bailout guarantees in mortgage markets. Finally, more recently, I have been studying the effects of non-pharmaceutical interventions in helping fight the spread of COVID-19.