ERC Starting Grant · 2023
Aggregate and Idiosyncratic Risk in Macroeconomics
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 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). This is a major step, but the focus on certainty-equivalent solutions in aggregates restricts the interaction of both phenomena. 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…
From the public funding record at EU CORDIS. Describes the funded project, not the reviews below.