PRR Project

Summary

Modern macroeconomics has expanded its focus from the study of aggregate variables such as income, consumption and wealth, to the dynamics of distributions of these variables (see Krueger et al. (2010)). Advances in computational methods and hardware and the greater availability of microdata has provided researchers not only the means to build, solve and simulate models that account in greater detail for characteristics that differ across agents (be it households, firms or other), but also the data do discipline them. Rather than a revolution, seldom observed in the field of economics, the relevance of heterogeneous agent models has been growing in importance, in a slow but steady pace (see Cherrier (2018)). The most recent methodological contributions in macroeconomics have focused mainly on this, in particular on solution methods to heterogeneous agents new Keynesian (HANK) models.The growth in importance of this class of models can only be partially justified by the greater availability of microdata and more powerful computational methods and hardware. This only tells the supply side of the story. There is also a demand side. First by the society at large as global trends in economic inequality have fueled populist movements and threaten the social stability of developed economies (see Rodrik 2018 and Piketty 2014). Second, by the profession. The representative agent framework, (see Chancellor, 2017, for example) cannot be used to address such issues, be it from a normative or positive perspective. Following the words of Deaton (2016), “While we often must focus on aggregates for macroeconomic policy, it is impossible to think coherently about national well - being while ignoring inequality and poverty, neither of which is visible in aggregate data” , some questions cannot be properly addressed in representative agent frameworks, to which the author adds that “Indeed, and except in exceptional cases, macroeconomic aggregates themselves depend on the distribution”.At the same time, there have been significant advances in the mathematical and computational methods needed to solve, simulate and estimate macroeconomic models with large state spaces and that include an increasing set of features that allow for increasingly empirically consistent distributions of individual characteristics that impact (and are impacted by) macroeconomic dynamics, fundamental features in our quest to understand the mechanisms that connect microeconomic and macroeconomic dynamics.In the last few years, our two full professors in the field of Macroeconomics retired, namely Professors Jorge Braga de Macedo and Luis Campos e Cunha, leading Portuguese macroeconomists of their generation. Our institution is therefore in need of hiring promising scholars who have the potential to become leading macroeconomists and bring the macroeconomics teaching and research at our institution to the frontier.Given this, we are looking for an Associate Professor with a solid record of scholarly contributions in macroeconomics, regarding the interplay between macroeconomic dynamics and microeconomic heterogeneity, who can produce policy recommendations in areas relevant for the UNDGs, such as climate change, economic inequality, and inclusive growth and who has the research potential to become Full Professor in the future. The candidate should also be able to show proficiency in the methods that are needed to solve, simulate, and estimate the state-of-the-art macroeconomic models that are used to produce said research.The selected candidate will be expected to contribute to teaching in the School’s programs, in particular in the areas of their expertise, namely macroeconomics and computational methods. They are also expected to produce scholarly research of significant impact and quality that can be published in the best scientific journals in the respective fields. They will also be expected to take a leading role in the supervision of MSc and PhD students, to apply for competitive internal and external funding to provide further support for their research, and to contribute to the collaborative research environment at our institution.Cherrier, B. (2018). Heterogeneous agents macroeconomics has a long history, and it raises many questions. The undercover historian. Retrieved from https://beatricecherrier.wordpress.com/2018/11/28/heterogeneous-agent-macroeconomics-has-a-long-history-and-it-raises-many-questions/.Deaton, A. (2016) Measuring and understanding behavior, welfare, and poverty. American Economic Review, 106(6),1221 - 1243.Krueger, D., Perri, F., Pistaferri, L., & Violante, G. L. (2010). Cross-sectional facts for macroeconomists. Review of Economic dynamics, 13(1), 1-14.Piketty, T. (2014). O capital no século XXI. Editora Intrínseca.Rodrik, D. (2018). Populism and the economics of globalization. Journal of international business policy, 1, 12-33.