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Highlights

The Rise of Mesoeconomics

In an article published by Project Syndicate, and citing ongoing work at Cambridge by Vasco M. Carvalho and Matt Elliott, William H. Janeway (Cambridge) urges governments to draw on the emerging field of mesoeconomics to respond effectively to supply chain disruptions and implement effective strategic industrial policies.

event

Event Date

Monday, 17 June 2024 -- Tuesday, 2 July 2024

Alfred P. Sloan Foundation Summer School at the University of Cambridge

This programme will bring together young researchers to access frontier leading work from world experts, with the intention that they use new tools, and collaborations, to propel the emerging field of mesoeconomics.

2024 Keynes Fund Lecture – Interview with Prof. Markus Brunnermeier

Professor Markus Brunnermeier is interviewed about his forthcoming Keynes Lecture at Cambridge on May 10th 2024 by Radu Gabriel Cristea, a Faculty of Economics PhD candidate. The talk is entitled: ‘The International Monetary System and Safe Assets’(with Sebastian Merkel).

Inequality and the Organisation of Work in a Knowledge Economy

Firms are increasingly viewed as playing a central role in the evolution of wage inequality. Across many advanced economies, a prominent feature of wage dispersion and its rise since the 1980s is the large and increased share attributable to between-firm differences in pay. In this project, Lukas develops, tests, and quantifies a novel theory to explain this trend. Find out more about Lukas Freund’s Keynes Fund project on the Keynes Fund website:

Working Paper

Monetary Policy and Heterogeneity: An Analytical Framework

Bilbiie, F. O.

'THANK, a tractable HANK model captures analytically core micro-heterogeneity channels of quantitative HANK; the paper uses the former to elucidate key transmission mechanisms and dynamic properties of the latter' (summary from The Review of Economic Studies, which has accepted the paper for publication).

Working Paper

Social Structure, State, and Economic Activity

Bramoulle, Y., Goyal, S., Morelli, M.

Most societies in the world contain strong group identities and the culture supporting these groups is highly persistent. This persistence in turn gives rise to a practical problem: how do and should societies with strong group identities organize themselves for exchange and public good provision? In this paper, we develop a theoretical framework – with social structure characterized by number and size of groups as well as quality of ties between them – that allows us to study, normatively and positively, the relationship between social structure, state capacity, and economic activity.

Working Paper

Estimating a Density Ratio Model for Stock Market Risk and Option Demand

Dalderop, J., Linton, O. B.

Option-implied risk-neutral densities are widely used for constructing forward-looking risk measures. Meanwhile, investor risk aversion introduces a multiplicative pricing kernel between the risk-neutral and true conditional densities of the underlying asset’s return. This paper proposes a simple local estimator of the pricing kernel based on inverse density weighting, and characterizes its asymptotic bias and variance.

News in Brief

The Rise of Mesoeconomics

17 May 2024

Chris Rauh on How to Use AI To Predict Conflicts

16 January 2024

Professor Carvalho to join EEA

27 November 2023

Building an alliance to map global supply networks

24 October 2023

Conflict forecast in National News

27 July 2023

COVID-19: How the Faculty Researched the Pandemic in Real Time

07 July 2023

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Research Themes

We focus on four key areas of economic research

Networks, Crowds & Markets

Transmission Mechanisms & Economic Policy

Institutions & Markets:

Empirical Analysis of Financial Markets

Special Initiatives

Covid-19 Research

The Cambridge-INET led, COVID-19 Economic Research website has an extensive collection of special features, research papers, blogs and videos, by Cambridge Academics that look into the pandemic and it’s economics effects,

See all our Special Initiatives

Events & Activites

Alan M. Taylor (Columbia) delivers keynote speech

We were delighted to welcome Alan M. Taylor (Columbia) to Cambridge for our first Cambridge Alumni in Macro (CAM) Conference to deliver the keynote speech.

Alan 'read mathematics at King’s College, Cambridge, and received his Ph.D. in economics from Harvard. His research spans several areas including international economics, macroeconomics, finance, growth, development, economic history.

He is a Research Associate of the National Bureau of Economic Research in Cambridge, Massachusetts, and a Research Fellow of the Center for Economic Policy Research in London. In 2004 he was awarded a John Simon Guggenheim Memorial Fellowship and in 2009 he became a Houblon-Norman/George Fellow at Bank of England.

His publications include numerous articles in economics journals, essays on policy and commentary, edited volumes and the books Global Capital Markets: Integration, Crisis and Growth published by Cambridge University Press (with Maurice Obstfeld), and Straining at the Anchor: The Argentine Currency Board and the Search for Macroeconomic Stability, 1880–1935 published by The University of Chicago Press (with Gerardo della Paolera).

He has been a visitor/consultant/speaker at many public sector organizations including various Federal Reserve Banks, the IMF, World Bank, IDB, BIS, ECB, and the central banks of the UK, India, China, France, Netherlands, Italy, Switzerland, Austria, Korea, Croatia, Peru, Israel, and Argentina. In the private sector he has served as a Senior Advisor at Morgan Stanley and at PIMCO and has been a visitor/consultant/speaker at various asset managers.'

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Event Links

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Research Paper

What happens when firms make repeated innovations and excessive spin-offs?

Professor Hamid Sabourian and Pierre Mella-Barral (TBS Business School) have published new research in the Janeway Institute Working Paper Series and the Cambridge Working Papers in Economics.

The research looks at how firms can voluntarily create independent firms to implement their technologically distant innovations and capture their value through capital markets and argues that when firms repeatedly compete to make innovations, there is inefficient external implementation of innovations and “excessive” creation of such firms.

This inefficiency is most exacerbated in the early stages of an industry, when the number of firms is still limited.

Download the paper