Graduate research seminars
Erwan Gautier, Bank of France
Firms’ Inflation and Wage Expectations during the Inflation Surge
March 27, 2026, from 2:30 p.m. to 4:00 p.m. in room VNR 3075.
Erwan Gautier is Head of the Micro Analysis Unit at the Bank of France and a leading expert on inflation dynamics, price-setting behavior, and monetary policy. His research combines micro data with macroeconomic modeling to shed light on how firms adjust prices and how monetary policy is transmitted to the real economy. He has published widely in international journals and regularly contributes to policy discussions at the Bank of France and within the Eurosystem.
Abstract:
Using a new survey of French firms’ inflation expectations that predates the inflation spike, we document i) evidence on the anchoring of inflation expectations during the inflation surge, and ii) the relevance of inflation expectations for firms’ decisions. First, we show that inflation expectations under-responded to the initial surge but then persistently overshot actual inflation dynamics. As inflation rose, firms initially perceived inflation to be less persistent than in previous years, an effect that dissipated over time. Second, we find that inflation expectations correlate with firms’ wage and price decisions. One-year expectations matter more than long-term expectations. During the inflation surge, wage and price decisions became increasingly disconnected from inflation expectations. This suggests that the scope for wage-price spirals is likely more limited than one might have expected from the surge in inflation and inflation expectations.
Firms’ Inflation and Wage Expectations during the Inflation Surge
March 27, 2026
Erwan Gautier is Head of the Micro Analysis Unit at the Bank of France and a leading expert on inflation dynamics, price-setting behavior, and monetary policy. His research combines micro data with macroeconomic modeling to shed light on how firms adjust prices and how monetary policy is transmitted to the real economy. He has published widely in international journals and regularly contributes to policy discussions at the Bank of France and within the Eurosystem.
Abstract:
Using a new survey of French firms’ inflation expectations that predates the inflation spike, we document i) evidence on the anchoring of inflation expectations during the inflation surge, and ii) the relevance of inflation expectations for firms’ decisions. First, we show that inflation expectations under-responded to the initial surge but then persistently overshot actual inflation dynamics. As inflation rose, firms initially perceived inflation to be less persistent than in previous years, an effect that dissipated over time. Second, we find that inflation expectations correlate with firms’ wage and price decisions. One-year expectations matter more than long-term expectations. During the inflation surge, wage and price decisions became increasingly disconnected from inflation expectations. This suggests that the scope for wage-price spirals is likely more limited than one might have expected from the surge in inflation and inflation expectations.
The Overdelivery Premium: When Monetary Policy Decisions Exceed Market Expectations
February 6, 2025
Michael Ehrmann is Professor of Economics at the Frankfurt School of Finance and Management. His research focuses on monetary policy, central bank communication, financial markets, and household expectations, with numerous publications in leading academic journals. He previously held senior positions at the Bank of Canada and the European Central Bank, where he contributed to the analysis of monetary transmission and communication strategies. Combining academic expertise with policy experience, he is widely recognized for bridging research and central banking practice.
Abstract:
A large literature studies the effects of monetary policy based on the identification of monetary policy surprises. This paper tests whether monetary policy surprises exert different effects depending on whether the central bank decision exceeds market expectations (i.e., the central bank “overdelivers”) or falls short of them (the central bank “underdelivers”). Based on a panel dataset covering monetary policy decisions and market expectations for 14 advanced economies over nearly thirty years, we find strong and robust evidence for what we call an “overdelivery premium”, whereby overdelivery exerts substantially larger effects on financial markets. This is especially the case for short-maturity interest rates, where the effect can be up to 9 times as large. The paper then analyses potential channels that can generate this overdelivery premium. Overdelivery does not lead to a revision of the perceived central bank reaction function, but it generates a different effect on macroeconomic expectations of private agents: in response to an overdelivery tightening, economic forecasters revise down their GDP forecasts and revise up their inflation and unemployment forecasts, whereas the revisions have the opposite sign for an underdelivery tightening. The paper also shows that the results are unique to monetary policy surprises. They do not carry over to other macroeconomic surprises, suggesting that the results do not stem from psychological biases such as reference-dependent utility.
Long-run inflation expectations
November 21, 2025
Jonas D. M. Fisher is senior vice president and director of macroeconomic research at the Federal Reserve Bank of Chicago. Fisher conducts research and analysis on business cycles, housing, growth and monetary and fiscal policy. Prior to his current position, Fisher served as a senior economist and economic advisor in the economic research area. He began his career at the Chicago Fed as a staff economist in 1996. Before joining the bank, Fisher was an assistant professor of economics at the University of Western Ontario. Fisher also served as a visiting associate professor at the Wharton School of the University of Pennsylvania and a visiting scholar at the Institute of Empirical Macroeconomics at the Federal Reserve Bank of Minneapolis. Fisher’s research has been published in the Journal of Political Economy, Econometrica, American Economic Review, the Review of Economic Studies, International Economic Review, NBER Macroeconomics Annual, Brookings Papers on Economic Activity, Review of Economic Dynamics, Journal of Monetary Economics, Journal of Economic Theory, Journal of Money, Credit and Banking, Macroeconomic Dynamics and the Journal of Economic Dynamics and Control. Fisher received a B.Sc. in economics and quantitative methods from University of Toronto, an M.A. in economics from Queens University (Kingston, ON) and a Ph.D. in economics from Northwestern University.
Government spending and fiscal foresight
March 28, 2025
Guido Ascari talk focused on the effects of government spending and whether they depend on expectations of future taxes, a central tenet of the fiscal theory of the price level.
Questioning Monetary Policy
February 07, 2025
Paul Beaudry is a Professor at the Vancouver School of Economics interested in everything that relates to the macro-economy, both domestically and internationally. In particular I do research related to business cycles, inflation, financial markets, the macro-economic effects of technological change and globalization, and the determinants of aggregate employment and wages.
The Anatomy of Chinese Innovation: Insights on Patent Quality and Ownership
November 22, 2024
Speaker: Professor Loren Brandt
Professor Loren Brand is the Noranda Chair Professor of Economics at the University of Toronto, and a world-renowned expert on the Chinese economy. He has published extensively in top economic journals and co-authored Policy, Regulation, and Innovation in China’s Electricity and Telecom Industries (2019), a major interdisciplinary effort analyzing the effect of government policy on the power and telecom sectors in China. He was also co-editor and major contributor to China’s Great Economic Transformation (2008) and an area editor for the Oxford Encyclopedia of Economic History. His current research focuses on entrepreneurship, industrial policy, innovation, and economic growth in China.
Abstract:
We study the evolution of patenting activity in China from 1985 to 2020 and its rapid growth over the last two decades. We leverage the capabilities of a Large Language Model (LLM) to measure patent importance and similarity based on patent text data and utilize information from a comprehensive business registry in China to measure patent ownership. This leads to four novel insights. First, the importance of the average invention patent in China declined from 2000 to 2010 but has been increasing in recent years. Second, private Chinese firms and universities account for most of the growth in Chinese patenting, whereas the role of overseas patentees has declined dramatically in terms of both levels and importance. Third, patentees in China have greatly reduced their dependence on foreign knowledge, a trend that began in the early 2000s. Finally, Chinese and foreign patenting have become more similar in terms of specialization across technology classes, but differences persist within technology classes as revealed by text similarities.
Negative Emission Technologies and Climate Cooperation
April 16th, 2024
Valentina Bosettiis a professor of environmental and climate change economics at Bocconi University. She is also a senior scientist at the RFF-CMCC European Institute on Economics and the Environment and she has been collaborating with the Euro-Mediterranean Center on Climate Change since 2010. Professor Bosetti wrote numerous papers on integrated assessment modeling of climate change, on green innovation and on climate change perception. She was one of the lead authors of the 5th and 6th Assessment Report of the IPCC (2014, 2022). Professor Bosetti was the Principal Investigator of two ERC Starting Grants, one on Innovation and clean technologies (ICARUS) and a second on Uncertainty and Climate Change (RISICO). She served as the president of the Italian Association of Environmental and Resource Economics (IAERE) and as council member of the European one (EAERE). Between 2020 and 2023, she served as Chairwoman of the Italian TSO, Terna S.p.A.
Transforming Africa: Technology, Agricultural Markets and Climate Change
December 1st, 2023
Yaw Nyarko is Professor of Economics at New York University (NYU) and the Director of NYU Africa House and the Center for Technology and Economic Development (CTED), as well as Co-Director of the Development Research Institute (DRI). As Co-Director of DRI, he was awarded the 2009 BBVA Frontiers in Knowledge Award on Economic Development Cooperation. He is a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research (NBER), and a Non-Resident Fellow at the Center for Global Development (CGD).
His research interests focus on the areas of economic development, theoretical economics, models of human capital as engines of economic growth, brain drain and skills acquisition, labor economics, and migration. His current research focuses on technology and economic development, commodities exchanges and markets in Africa, and determinants and returns of labor migration from South Asia in the UAE, as well as the impacts of various policy measures on the mobility of labor within the UAE.
He is the Chair of the Econometric Society Africa Regional Standing Committee. He has served as a consultant to organizations including the African Development Bank, the World Bank, the United Nations, and the Social Science Research Council. As the former Vice Provost of NYU, he managed a portfolio that included the oversight and establishment of campuses in Abu Dhabi, Accra, and Shanghai. Yaw Nyarko received his B.A. from the University of Ghana and a M.A. and Ph.D. in Economics from Cornell University.
Micro MPCs and Macro Counterfactuals: The Case of the 2008 Rebates
October 13th, 2023
Abstract:
We present evidence that the high estimated MPCs from the leading household studies result in implausible macroeconomic counterfactuals. Using the 2008 tax rebate as a case study, we calibrate a standard medium-scale New Keynesian model with the estimated micro MPCs to construct counterfactual macroeconomic consumption paths in the absence of a rebate. The counterfactual paths imply that consumption expenditures would have plummeted in spring and summer 2008 and then recovered when Lehman Brothers failed in September 2008. We use narratives and forecasts to argue that these paths are implausible. We then show that standard two-way fixed effect estimates of the micro MPCs are upward biased. When we correct for the biases, we estimate smaller micro MPCs than the previous literature. We also show that reasonable modifications of the model result in general equilibrium forces that dampen rather than amplify micro MPCs. The combination of smaller micro MPCs and dampening general equilibrium forces implies general equilibrium consumption multipliers that are below 0.2.
Rethinking Capitalism: The Power of Creative Destruction
March 3rd, 2023
This lecture explores creative destruction, the process whereby innovations displace old technologies. Professor Aghion will use the lens of creative destruction to revisit some main enigmas in economic history, question some common wisdom, and rethink the future of capitalism. The content of the lecture draws on the ideas expressed in an award-winning book, “The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations,” co-authored with Séline Antonin and Simon Bunel.
Long-run Trends in Long-Maturity Real Rates
Tuesday, October 18, 2022
Abstract:
Taking advantage of key recent advances in long-run financial and economic data, this paper analyzes the statistical properties of global long-maturity real interest rates over the past seven centuries. In contrast to existing consensus, which has overwhelmingly concentrated on short samples for short-maturity rates, we find that long-maturity real interest rates across advanced economies are in fact trend stationary, and exhibit a persistent downward trend since the Renaissance. We investigate structural breaks in real interest rates over time using multiple statistical approaches, and find that only the Black Death and the “Trinity default” of 1557 appear as consistent inflection points in capital markets on both global and country levels. While a 1914 break is also suggested in multiple series (though less robust than existing literature would lead one to expect), the evidence for an inflection point in 1981 appears much weaker. We further examine trends in persistence, as well as commonly-invoked drivers of global real rates: exploiting significant data advances, we argue that historically, demographic and productivity factors appear to show no promising causal role, and in fact diverge from real interest rates over the long run.
Rick van der Ploeg, Research Director of OXCARRE, University of Oxford.
On Current and Future Carbon Prices in a Risky World
Date: April 1st, 2022
Abstract:
We analyse the optimal paths of abatement and carbon prices under a variety of economic, temperature and damage risks. Carbon prices grow in line with economic growth, but with convex damages and temperature-dependent risks of climatic tipping points grow more quickly and with gradual resolution of uncertainty grow more slowly. With temperature-dependent economic damage tipping points carbon prices are higher, but when the tipping point occurs, the price jumps downward. With a temperature cap the e_cient carbon price rises at the risk-adjusted interest rate. Allowing for damages as well as a cap leads to a higher carbon price which grows more slowly. But as temperature and cumulative emissions approach their caps, the carbon price is ramped up ever more. Policy makers should expect a rising path of carbon prices.
Glenn D. Rudebusch is a Nonresident Senior Fellow at the Brookings Institution with the Hutchins Center on Fiscal & Monetary Policy. He is also a Senior Fellow at New York University in the Volatility and Risk Institute of the Stern School of Business.
The Rising Cost of Climate Change: Evidence from the Bond Market
Date: February 18th, 2022
Abstract:
Social discount rates (SDRs) are crucial for evaluating the costs of climate change. We show that the fundamental anchor for market-based SDRs is the equilibrium or steady-state real interest rate. Empirical interest rate models that allow for shifts in this equilibrium real rate find that it has declined notably since the 1990s, and this decline implies that the entire term structure of SDRs has shifted lower as well. Accounting for this new normal of persistently lower interest rates substantially boosts estimates of the social cost of carbon and supports a climate policy with stronger carbon mitigation strategies.
China’s Unconventional Nationwide CO2 Emissions Trading System: Cost-Effectiveness and Distributional Impact
November 12, 2021
Abstract:
China is implementing what is expected to become the world’s largest CO2 emissions trading system. To reduce emissions, the nation will employ a tradable performance standard (TPS), a rate-based instrument differing significantly from cap&trade (C&T) and a carbon tax, emissions pricing instruments used elsewhere. With matching analytically and numerically solved models, we assess the cost-effectiveness and distributional impacts of China’s TPS for reducing CO2 emissions from the power sector.
The TPS implicitly subsidizes electricity output, which limits its use of output-reduction as a channel for reducing emissions. It also gives power plants with especially low emissions-output ratios intentives to expand output relative to the business-as-usual baseline. These features compromise the TPS’s cost-effectiveness relative to C&T. The use of differing benchmarks (emissions-intensity standards) also compromises cost-effectiveness by distorting relative production levels and by lowering the cost-reducing potential of allowance trading. In our central case simulations, the TPS’s overall costs are about 34 percent higher than those of C&T.
Although the use of non-uniform benchmarks compromises cost-effectiveness, it can help serve regional distributional objectives. We assess the aggregate costs of customizing benchmarks in order to reduce the adverse profit impacts in provinces that otherwise would suffer a disproportionate cost from the TPS.
The Slope of the Phillips curve: Evidence from U.S. States?
April 30, 2021
Abstract:
We estimate the slope of the Phillips curve in the cross section of U.S. states using newly constructed state-level price indexes for non-tradeable goods back to 1978. Our estimates indicate that the Phillips curve is very flat and was very flat even during the early 1980s. We estimate only a modest decline in the slope of the Phillips curve since the 1980s. We use a multi-region model to infer the slope of the aggregate Phillips curve from our regional estimates. Applying our estimates to recent unemployment dynamics yields essentially no missing disinflation or missing reinflation over the past few business cycles. Our results imply that the sharp drop in core inflation in the early 1980s was mostly due to shifting expectations about long-run monetary policy as opposed to a steep Phillips curve, and the greater stability of inflation since the 1990s is mostly due to long-run inflationary expectations becoming more firmly anchored.
A Reconsideration of Money Growth Rules
Friday, November 20, 2020
A New Keynesian model, estimated using Bayesian methods over a sample period that includes the recent episode of zero nominal interest rates, illustrates the effects of replacing the Federal Reserve's historical policy of interest rate management with one targeting money growth instead. Counterfactual simulations show that a rule for adjusting the money growth rate, modestly and gradually, in response to changes in the output gap delivers performance comparable to the estimated interest rate rule in stabilizing output and inflation. The simulations also reveal that, under the same money growth rule, the US economy would have recovered more quickly from the 2007- 09 recession, with a much shorter period of exceptionally low interest rates. These results suggest that money growth rules can serve as simple but useful guides for monetary policy and eliminate concerns about monetary policy effectiveness when the zero lower bound constraint is binding.
Time-Varying Expectation Effects of Switching Financial Uncertainty
Friday, September 18, 2020
This paper investigates how regime switches in capital market conditions affect macroeconomic variables by employing a dynamic stochastic general equilibrium (DSGE) model with financial frictions derived from costly-state-verification and a risk process of switching steady-state means. Defining switches to the financial regimes as uncertainty shocks, transition probabilities between financial regimes influence entrepreneurial choices: upon an adverse shock, a bleak outlook of the capital market causes slow recovery of investment. By utilizing a latent factor method, our approach explicitly estimates time-varying transitions resulting from statistical feedbacks from past fundamental shocks to switching of financial regimes. We uncover evidence of time-varying expectations significantly affected by the feedback in the U.S. data and quantify the contribution of each fundamental shock. We also find that our uncertainty factor significantly explains the existing credit market uncertainty measures.
Digital Currency and Monetary Policy
Discuss the design and consequences of a central bank digital currency. The keynote speaker will be Professor Fernández-Villaverde (University of Pennsylvania, NBER and CEPR). In his presentation, Professor Fernández-Villaverde will build on his recent research, which is featured in Cryptocurrencies: A Crash Course in Digital Monetary Economics and Central Bank Digital Currency: Central Banking for All?
Friday, October 30, 2020
A Sufficient Statistic Approach for Optimal Monetary Policy (with G. Mesters)
Wednesday, May 15, 2019
If a monetary policy path is chosen optimally, any perturbation to that path should have no first-order effect on welfare. Drawing on this insight, we show that the impulse responses to monetary shocks are sufficient statistics to evaluate the optimality of a given policy, and we propose a “sufficient statistic targeting rule” that preserves all the benefits of targeting rules ---simplicity, transparency and immunity to time-consistency problems---, while remedying their one major limitation: non-robustness to model variations. The sufficient statistic targeting rule encompasses earlier targeting rules from the literature and generalizes the Brainard conservatism principle to a model-free setting. We test the optimality of the Fed monetary policy over the recent period, and we reject that the Fed policy was/is optimal.
An empirical defence of inflation targeting and the open-economy Phillips Curve from a data-rich perspective
On Friday, September 20, 2019, Professor Morley presented the results of his two ongoing research projects related to empirical analysis of inflation. The first project evaluates inflation targeting in Australia using a factor modelling approach. The second project conducts a cross-country analysis of the open-economy Phillips Curve for a number of advanced and emerging economies (including Canada).
James Morley was appointed as Professor of Macroeconomics at the University of Sydney in 2017 and is Co-Director of the "Global Perspectives on Economic Policy" initiative for the Faculty of Arts & Social Sciences. He received his PhD from the University of Washington in 1999 and previously held positions at Washington University in St. Louis and the University of New South Wales, most recently as Associate Dean (Research) of the UNSW Business School from 2014-2017. His research focuses on the empirical analysis of business cycles, stabilization policy, and sources of persistent changes in macroeconomic and financial conditions.
He is an Academic Fellow of the Reserve Bank of New Zealand and has been a visiting scholar at various policy institutions worldwide, including the Bank of Canada, Bank Negara Malaysia, and the Bank for International Settlements. He is a former President of the Society for Nonlinear Dynamics and Econometrics and is currently Co-Editor of The Economic Record.