Project description DEENESFRITPL Analysing distributional macroeconomics in the short and long run Distributional macroeconomics deals with macroeconomic questions in terms of distributions of microeconomic variables such as income or wealth rather than just aggregates. This approach makes it possible to examine the distributional implications of macroeconomic trends, shocks or policies, and to examine the two-way interaction between these distributions and the macroeconomy. With this in mind, the EU-funded DisMaLS project aims to advance the distributional macroeconomics agenda both theoretically and empirically. Theoretically, it will do so by developing new theories of the income and wealth distributions and their interactions with the macroeconomy in both the short and long term. Empirically, it will analyse high-quality Norwegian administrative data to enrich these theories. Show the project objective Hide the project objective Objective A key development in the “dismal science” has been the incorporation of explicit heterogeneity into models of the macroeconomy. As a result of taking micro data seriously, these theories study macroeconomic questions in terms of distributions of microeconomic variables like income or wealth rather than just aggregates. This approach opens up the door to examining the distributional implications of macroeconomic trends, shocks or policies, and to examine the two-way interaction between these distributions and the macroeconomy.DisMaLS will advance this “distributional macroeconomics” agenda both theoretically and empirically. Theoretically, it will do so by developing new theories of the income and wealth distributions and their interactions with the macroeconomy in both the long and short run. Empirically, DisMaLS will bring to the table high-quality Norwegian administrative data to discipline and enrich these theories.In terms of long-run trends, a striking feature regarding economic growth in many developed countries is that it has been unequally distributed. For example, in the U.S. real household incomes have grown by roughly two percent per year on average but income percentiles corresponding to the bottom 50% of the distribution have stagnated since the 1970s. DisMaLS will use its theory of income and wealth distribution to examine the potential drivers of these distributional trends, for example automation and tax policy.Turning to the short-run, DisMaLS aims to understand the causes of infrequent but large economic crises, like the Great Recession. I aim to develop a quantitative macroeconomic theory that incorporates asset price booms driven by individuals switching out of liquid assets to buy real or illiquid financial assets, and crashes driven by the reverse movement. As part of the project, I aim to develop a new methodology for solving heterogeneous agent models with aggregate risk and both micro and macro non-linearities. Fields of science social scienceseconomics and businesseconomicsmacroeconomicssocial sciencessociologyindustrial relationsautomationsocial sciencessociologygovernancetaxation Programme(s) H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC) Main Programme Topic(s) ERC-2019-COG - ERC Consolidator Grant Call for proposal ERC-2019-COG See other projects for this call Funding Scheme ERC-COG - Consolidator Grant Host institution LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE Net EU contribution € 1 598 433,00 Address Houghton Street 1 WC2A 2AE London United Kingdom See on map Region London Inner London — West Westminster Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 1 598 433,00 Beneficiaries (1) Sort alphabetically Sort by Net EU contribution Expand all Collapse all LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE United Kingdom Net EU contribution € 1 598 433,00 Address Houghton Street 1 WC2A 2AE London See on map Region London Inner London — West Westminster Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 1 598 433,00
