Research on Macroeconomic Fluctuations and Trade

Project Information

MACROTRADE

Grant agreement ID: 681664

DOI

10.3030/681664

Project closed

EC signature date 13 June 2016

Start date 1 October 2016

End date 30 September 2023

Funded under

• EXCELLENT SCIENCE - European Research Council (ERC)

Total cost

€ 1 257 242,51

EU contribution

€ 1 257 242,51

Coordinated by

LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE
United Kingdom

Periodic Reporting for period 5 - MACROTRADE (Research on Macroeconomic Fluctuations and Trade)

Reporting period: 2022-10-01 to 2023-09-30

Summary of the context and overall objectives of the project

The research is divided into three strands whose main goals are to i) study macroeconomic fluctuations, ii) identify the mechanisms that drive and propagate these fluctuations, and iii) use the empirical findings to inform and formulate models that can be used for quantitative policy and positive analysis

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

My research proposal was organised in three strands. I first list below the outcomes so far and then expand on each of them.

Strand 1: The results of this research are summarised in “History Dependence in Housing Markets”, joint with Phillippe Bracke. Our study has been punlished by the American Economic Journal: Macroeconomics.
It can be downloaded from: http://personal.lse.ac.uk/tenreyro/history.pdf

Strand 2: This strands has produced two main papers. The first is “The Transmission of Monetary Policy Through Redistributions and Durables Purchases”, joint with Vincent Sterk. This has been published in the Journal of Monetary Economics. It can be downloaded from
http://personal.lse.ac.uk/tenreyro/NNKM.pdf
The second paper is “Optimal Inflation and the Phillips Curve”, joint with Michael McLeay, published in the NBER Macroeconomics Annual.:
http://personal.lse.ac.uk/tenreyro/inflation1.pdf This has served as input in the conference on the Revaluation of the Fed, held in Chicago, June 2-3.

Strand 3: This strands has produced five papers so far: “Commodity Booms and Busts in Emerging Economies,” joint with Thomas Drechsel. This has been published in the Journal of International Economics. http://personal.lse.ac.uk/tenreyro/commodity.pdf
As a natural follow up on this, I have now produced a new paper on Brexit. The working version can be found here: https://personal.lse.ac.uk/tenreyro/brexit.pdf We have received an invitation to revise and resubmit from the Review of Economic Studies and we have been working on the revision.
A third paper, still in progress is “Piggy Back Exporting and the Gains from Trade in Developing Economies,” joint with Swati Dhingra. We are still working on it, as we have received reports from referees.
A spinoff idea that came off from doing this work was published in a paper that dealt with the question of population in developing countries, as I was concerned about controlling for long term trends in my study of terms of trend fluctuations. The paper dealt with a drastic change in population growth, and discusses a key factor behind it that had been neglected in the literature. “The Fall in Global Fertility: A Quantitative Model,” joint with Tiloka DeSilva. Published in The American Economic Journal: Macroeconomics. It can be downloaded from http://personal.lse.ac.uk/tenreyro/fertility2.pdf

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

“Optimal Inflation and The Phillips Curve” is possibly the most important of all these papers in terms of having an influence on the policy sphere. As mentioned above, it has been used to push back on the attach on the policy framework currently used by central banks. It has generated a lot of interest in the academic and policy sphere.

Awards:
I have been appointed Fellow of the British Academy (2018), External Monetary Policy Committee Member, Bank of England (2017).
I have been elected Vice-President European Economic Association (2019) and will become President in 2020.

I have been given the Carl Menger Prize on Monetary Macroeconomics 2018

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