Objective
Macroeconomic data are largely non-experimental. Thus, causal inference in macroeconomics is largely based on assumptions about what aspects of the variation in the data are exogenous. This presents two major challenges, which this research addresses directly. First, few such assumptions are generally accepted. Second, conditional on any set of assumptions, identification of causal effects is often weak because there is little relevant variation in the data. To tackle these challenges, I propose three lines of enquiry to explore new sources of identification and develop the requisite econometric methods.
The first line will study the implications of the so-called ‘zero lower bound’ (ZLB) on nominal interest rates for identification. The key novel insight is that the ZLB causes monetary policy to be set at least in part exogenously. This can be thought of as a natural experiment that generates a new instrument to identify the underlying policy model. This insight applies more generally to policy functions subject to exogenous constraints. The informativeness of these constraints depends on the probability that they bind, so recent experience makes the ZLB a promising application of the idea.
The second line will analyse new ways of using time-variation in some of the parameters of macroeconomic models, such as trend inflation or the volatility of shocks, to study important open questions in macro, such as the degree of forward versus backward-looking behaviour and the ‘good luck versus good policy’ debate.
The third line will contribute to the on-going research on developing methods of inference that are robust to weak identification. This is a pervasive problem in macro that threatens the validity of structural inference under any identification scheme.
The synergies among these three lines' methodological analyses will accelerate progress on each line well beyond what would be possible in a piecemeal approach.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
- social sciences economics and business economics macroeconomics
- natural sciences mathematics applied mathematics statistics and probability bayesian statistics
- social sciences economics and business economics production economics productivity
- social sciences economics and business business and management employment
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Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
ERC-COG - Consolidator Grant
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2014-CoG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
OX1 2JD Oxford
United Kingdom
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