AIRMAC

Aggregate and Idiosyncratic Risk in Macroeconomics

01/01/2024 to 31/12/2028

Since the Great Recession of 08/09, two interrelated economic phenomena challenge politics and research alike. First, the return of aggregate volatility marking the end of the Great Moderation. Second, the rise in economic inequality to levels last seen during the Gilded Age. A new literature has responded to this challenge by adding heterogeneity to business cycle models (HANK). Even though this is a major step ahead, these studies restrict themselves to certainty-equivalent solutions in aggregate shocks.
My research agenda aims to make ground-breaking progress by developing a new computational toolbox that allows to study the relative strength of aggregate and idiosyncratic risks and their interaction in inequality, asset returns, and business cycles.