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New issues in the Analysis of Business Cycles

Objective

The last decade had seen an increasing recognition that financial markets play a key role over the business cycle. Still, there have not been many detailed, systematic, empirical investigations on the consumption, employment and investment effects of the interaction between macroeconomic policies and the evolving structure of credit markets. This proposal aims to develop a research agenda over the next five years that combines insights from disaggregated data sets --which are either newly available or I propose to construct-- on (i) mortgage originations, (ii) the supply of household financial products and (iii) firms’ debt originations, with the development of theoretical frameworks that introduce credit supply and demand heterogeneity in the analyses of consumption and investment decisions.
Three features of this proposal make it of potentially high impact. On the empirical side, the analysis of existing and novel detailed households’, firms’ and lenders’ data sets will allow us to identify new stylized facts on the transmission of monetary policy to real activity through financial markets (and leverage and asset prices in particular). On the theoretical side, these stylized facts will be used to develop and discriminate among competing channels of macroeconomic policy transmission. Finally, the regularity highlighted in both the empirical and theoretical analyses will inform the public debate on the design of future monetary and macro-prudential policy interventions.Each project (i)-(iv) describes an overall theme, which is expected to have several ramifications in terms of publishable papers, policy reports and possibly dissertation contents for PhD student(s).

Host institution

LONDON BUSINESS SCHOOL
Net EU contribution
€ 1 135 940,00
Address
Regent S Park
NW1 4SA London
United Kingdom

See on map

Region
London Inner London — West Westminster
Activity type
Higher or Secondary Education Establishments
Other funding
€ 1 135 940,00

Beneficiaries (1)

LONDON BUSINESS SCHOOL
United Kingdom
Net EU contribution
€ 1 135 940,00
Address
Regent S Park
NW1 4SA London

See on map

Region
London Inner London — West Westminster
Activity type
Higher or Secondary Education Establishments
Other funding
€ 1 135 940,00