Florin Bilbiie 🇪🇺 🇺🇦
@FlorinBilbiie
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Max(Micro in Macro) s.t. Tractable Aggregate Demand w/ Heterogeneity/Inequality Aggregate Supply w/ Entry/Variety Monetary & Fiscal Policy #EconTwitter 1st Gen
Cambridge, UK
Joined November 2012
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1/n "HANK Made Easy" Lecture notes/slides on Macro Policies in THANK (Tractable HANK). Having had to cancel several courses, I am sharing publicly the slides I use to teach TANK and (T)HANK
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This fully-specified model fits all the observations and thus constitutes a plausible explanation of what's going on.
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Oldie-goldie 2007 Berkeley graduation speech by Tom Sargent, the best concise summary of econ I read (12 points)
"Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.
1. Many things that are desirable are not feasible.
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It then follows immediately/can easily be shown that:
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7000 euros per *second*.
One million every ~2 minutes.
One billion every day and a half.
(That’s what EU countries pay Russia for gas and oil.)
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New Paper!
"Downward Wage Rigidity Matters"
by Lionel Messi
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A quarter century ago, a student in Romania, this would have sounded like a good (bad?) April’s Fool joke.
I am happy, excited and (reverse) humbled to join the University of Cambridge (UK :) ).
Enough said. The right words are hard to find, but also hardly needed.
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Gymnastics, floor: sorry to say but Romania was literally robbed of the bronze medal(s).
Yes Andrade, the most complete, deserved gold and Biles with the usual acrobatics silver. But Barbosu & Voinea were just behind with 13.7, to be denied by an appeal giving Chiles the bronze.
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Happy to announce I will be replacing Robert Barro as QJE Editor.
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More bragging.
𝗧𝗵𝗲 𝗡𝗲𝘄 𝗞𝗲𝘆𝗻𝗲𝘀𝗶𝗮𝗻 𝗖𝗿𝗼𝘀𝘀, 𝘑𝘰𝘶𝘳𝘯𝘢𝘭 𝘰𝘧 𝘔𝘰𝘯𝘦𝘵𝘢𝘳𝘺 𝘌𝘤𝘰𝘯𝘰𝘮𝘪𝘤𝘴 2020, was selected by the Editors for the 𝗕𝗲𝘀𝘁 𝗣𝗮𝗽𝗲𝗿 𝗔𝘄𝗮𝗿𝗱.
This is a personal thread on its genesis and journey. 1/N
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So people will finally realize Peter Diamond and Doug Diamond are two different people.
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New short paper, "Social Distancing According to TANK": "Assume there are two types of agents. Stay away from both." End.
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"You are an economist? Maybe you can give me some hints about making money."
"Oh no, I am very bad at everything that has to do with money--and that's okay for the kind of economics I do."
"What kind of economics do you do?"
"Monetary economics".
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Exciting new paper with Diego Känzig
@drkaenzig
:
“Greed? Profits, Inflation, and Aggregate Demand”, studying the interplay of corporate profits & income distribution in shaping inflation and aggregate demand within the New Keynesian framework:
CEPR DP
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I am incredibly happy, grateful, and honored to receive the Nicholas Georgescu-Roegen Prize for Economics by the Romanian Academy--the highest cultural forum for sciences, arts, and letters in Romania (our version of the “Académie Française”).
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The sudden realization that the 1st year undergraduate students to whom you are telling about the 2008 Great Recession were like 5-6 year old at the time ...
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Thrilled that my paper “Neo-Fisherian Policies and Liquidity Traps” has just been accepted at the AEJ: Macro. It has been around for ~3 years, but in the making much longer, >10 years ...
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A simple formula for the optimal tax rate τ (say, on wealth). Set it such that:
S(τ)=0,
where S(.) is "propensity to go to Space".
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Old news but:
"Keynesian" vs "Chicago" is no longer a thing and has not been a thing for some decades
(unless" you clearly weren't there").
There is good macro, and there is bad macro.
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Very rare to see this level of Tayloring nowadays, even on the wealthy.
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You folks go to Italy and (try to) get a taxi, then tell me if Uber is a good or a bad thing.
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PS note the dynamic general-equilibrium nature of it.
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Very impressed by
@TimTkehoe
's distant first place in this ranking of giants.
More than 100 advisees!
Impressive and inspiring, especially if you know who some of those are...
(poke
@MortenORavn
@KrusellPer
@fabrizio_perri
also featured in this top)
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Perhaps the Swiss government is trying to increase GDP/capita by decreasing the denominator.
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on closer inspection, the model does seem to have some fishy elements
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-Dad, why is my sister's name Nadia?
-Because your Mom loves gymnastics and there was this gymnast, first 10 in history, etc.
-Thank you Dad!
-You are welcome, Mas-Colell Whinston Green!
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Laughing dictionary:
hahahaha (most languages)
ahahahah (Italian)
jajajaja (Spanish)
xaxaxaxa (Greek)
kkkk (Brazilian Portuguese)
5555 (Thai)
Do complete
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Micro with Macrofoundations: the next frontier.
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So yeah, helping vaccinate Africa is in your interest too.
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You know all these (so many) brilliant Italian economists in the top US and European departments? You can trace most of them back in some way to Alesina, Giavazzi, and Tabellini. Such an enduring intellectual heritage.
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translation: "I am NO Putin fan, but let's be honest: I actually am".
I’m NO Putin fan, but let’s be honest: What would the United States do if Mexico, on it’s border, joined some sort of Russian and/or Chinese security alliance?
@JeffDSachs
provides wise advice: US should compromise on Nato to save Ukraine.
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There is no well-accepted justification for having such strong opinions on things one knows so manifestly little about. A little modesty would go a long way here.
200bps rate hike.
There is no well-accepted theoretical justification for smoothing interest rate increases. Go directly to the optimal level.
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1/n Need holiday reading?
New paper w/ 𝐌𝐚𝐫𝐜 𝐌𝐞𝐥𝐢𝐭𝐳:
"𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒-𝐷𝑒𝑚𝑎𝑛𝑑 𝐴𝑚𝑝𝑙𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑆𝑢𝑝𝑝𝑙𝑦 𝐷𝑖𝑠𝑟𝑢𝑝𝑡𝑖𝑜𝑛𝑠: 𝑇𝘩𝑒 𝐸𝑛𝑡𝑟𝑦-𝐸𝑥𝑖𝑡 𝑀𝑢𝑙𝑡𝑖𝑝𝑙𝑖𝑒𝑟"
Slides
A Thread
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Ben Bernanke was also a pioneer in the literature on investment under uncertainty (option values, etc.).
E.g. this 1983 (!! before Dixit, Pindyck, Bertola etc.)
@QJEHarvard
article.
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Lucas' top five most cited papers.
Notice:
1. all single-authored (like much of his work)
2. outlets
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Your password needs to contain 10-20 characters, 1 majuscule, 1 minuscule, 1 number, symbol #*, 1 Cyrillic, 1 Greek letter, 1 Sanskrit, 1 Chinese symbol, 1 hieroglyph, a limerick, a haiku, one of the fundamental equations in math or physics, a theorem, and the Holy Grail.
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New Paper! (version …)
HALT: Heterogeneous-Agent Liquidity Traps
Looks at liquidity traps analytically, using the tractable (T)HANK model I developed in separate work; nests other analytical HANKs too.
What does HA do to LT?
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note 2: the model is pretty linear. It does have (sort of) heterogeneous agents though.
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I hope to live to see the day when this stops happening.
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I'm not objective, but Diego is objectively a star.
Solo AER macro time series, cool (if I may say) JME RR macro theory, widely cited EER w/ micro data during COVID.
Outstanding JMP blending all 3 lodes to address 2 hot issues, climate & inequality.
Talk to him, you'll see.
As the COP26 summit heads into overtime, let me take this opportunity to tell you a bit more about my job market paper:
"𝗧𝗵𝗲 𝘂𝗻𝗲𝗾𝘂𝗮𝗹 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗰𝗼𝗻𝘀𝗲𝗾𝘂𝗲𝗻𝗰𝗲𝘀 𝗼𝗳 𝗰𝗮𝗿𝗯𝗼𝗻 𝗽𝗿𝗶𝗰𝗶𝗻𝗴"
JMP link:
#EconTwitter
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Warning: bragging
Very proud of my 2008 JET paper that introduced the analytical TANK model and happy when it gets recognized. It's the most cited JET published that year
Most flattering 22nd all-time most “relevant” (def below). The company is humbling and somewhat dizzying. 1/2
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Varoufaksplaining: when a Varoufakis fan you just met in Greek taverna explains to you, a professor in macroeconomics, how the economy works, economics is Evil, and all that.
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When they said "standing on the shoulders of giants" ...
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In light of the Federal Reserve’s recent move towards Price Level Targeting PLT(-ish), a reminder of this paper where I show (among other things) this policy’s virtues in T(ractable)-HANK
Two such virtues: 1/n
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Positive TFP shock happening as we speak (Facebook, Whatsapp, Instagram down).
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12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates."
That's it. So beautiful.
(was reminded of it by a fcbk post reposted by Francesco Lippi)
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Can't help thinking that the tragedy in Ukraine today is a result of a lack of post-communist “never again” . A lack of acknowledgement of the depth and gravity of the mass tragedy we suffered for decades in that part of the world, and of the correction necessary thereafter. 1/2
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Overly excited to spend the rest of the academic year at Cambridge as a visiting professor and “director of research”, starting in January.
Looking forward to two productive terms!
@Cambridge_Uni
@CamEcon
@janewayinst
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Plot twist: the roads meet again beyond the hill, in a place called Macroeconomics.
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What's a book that changed your life?
Not subtly, I'm talking about the lightning strikes
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Stokey and Lucas, with Prescott
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Today is Keynes' death anniversary.
And I confess that I did not know, or never noticed, one piece of information that appears here in the Wikipedia page: his height!
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4. Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.
5. There are tradeoffs between equality and efficiency.
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10. When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.
11. Most people want other people to pay for public goods and government transfers (especially transfers to themselves).
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Argentina, rotated. Knew it was big, did not realize it was *this* big. Inspired by
@JoseILopez
's map for Colombia. (they could have called it "size matters")
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2. Individuals and communities face trade-offs.
3. Other people have more information about their abilities, their efforts, and their preferences than you do.
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Professional announcement: stepping down as (co-)editor of the European Economic Review, EER.
Due to personal reasons i.e. other changes that risked impacting my work as editor, it seemed fair that I step down in anticipation.
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6. In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well meaning outsiders to change things for better or worse.
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Perhaps we should have
Nobel: Macro,
Nobel: Micro,
Nobel: Applied, &
Nobel: Econ. Policy
(wait, this reminds me of something )
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Why have "economists" not worked on useful stuff like bank runs, liquidity, deposit insurance, etc. Totally your fault, economists.
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Humbled to report that I will join MIT as the Germinal Ershtfish endowed chair, starting on Sept 31st 2024.
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"Inequality and Business Cycles"
Tune in tomorrow Fri 4.30 Boston time, see Giorgio
@gprimice
present our joint paper with Tamba
@tamba_NYC
at the NBER SI.
Entire program is great (see youtube link)
Draft
Thread: next week (maybe).
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I think what Draghi needs to do in Italy now is basically apply the conclusions of Ch. 3 of his 1976 MIT PhD thesis (HT
@Undercoverhist
).
La thèse de Draghi, 1976, dirigée par Franco Modigliani. Mesure de la productivité, théorie de la dévaluation, arbitrage entre court et long terme. cc
@Undercoverhist
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@mckSt3ve
Those important extensions are beyond the scope of the current study and left for future research.
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DYNARE is Nobel-worthy imho.
Hard to beat if you think of impact on the profession.
(OK I may be a little biased, dearly remember sitting in some of those team meetings at Chevaleret, wondering what language these people were speaking :))
cc
@MichelJuillard
@DynareTeam
Who create new paradigms in economics? Not just famed theorists & modelers
But also lesser-known econs who write computational algorithms & design software
@cescoeco
, A.Saidi & I wrote a history of how DSGEs became dominant. It's the history of Dynare
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Diego is a fantastic macroeconomist (and still a PhD student!) and this is his first paper.
He even managed to put "American Economic Review" in bold italics in a Tweet, that's how good he is :)
Lucky to be his coauthor!
Very happy to announce that my paper “The macroeconomic effects of oil supply news: Evidence from OPEC announcements” has been accepted at the 𝘼𝙢𝙚𝙧𝙞𝙘𝙖𝙣 𝙀𝙘𝙤𝙣𝙤𝙢𝙞𝙘 𝙍𝙚𝙫𝙞𝙚𝙬. To celebrate, let me briefly summarize the main insights and conclusions (Thread).
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This Halloween, I will dress as that second-order condition you forgot to check.
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1/n Best issue to date ( :) ) of the AEJ Macro is out. Honored to have two papers (by coincidence) in it. One, with
@FabioGhironi
and Marc Melitz, started in 2004 (!), circulated since 2006, a normative companion to our 2012 JPE; the other, solo, started in 2015. Details follow
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Here's to more of this in sports, science, arts etc. -- in life in general.
(HT
@jmgmoron
)
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You cannot be a macroeconomist without being a microeconomist (too),
But you can be a microeconomist without being a macroeconomist.
@wb_thorne
@Joshua_Z_Miller
@coreeconteam
If you aren't a macroeconomist before 20, you have no heart.
If you aren't a microeconomist after 20, you have no brains.
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I mean after Putin was so severely condemned and sanctioned internationally after the Navalny case, how did Lukashenko think he would get away with this. (Oh wait ...)
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Exciting news and times for Economics in Europe!
CEPR headquarters moving to Paris.
Annual symposium (NBER SI-style) also in Paris -- like many of us have been "asking for" since long.
@cepr_org
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A little reminder of this Swiss Economists' Open Letter to the federal Government asking for (much) stricter measures in *early November*, 6 weeks ago.
Deaths increased 2.5 times since then ...
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Maybe this is one thing we can teach our students
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My contribution to an important topic
#EconTwitter
In my defense, Mike does use the word "Taylor" a lot in that book, and even has a paper with that word in the title.
Coincidences? I don't think so!
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A short interview on national TV in your home country, followed by the realization that *to your mother* that trumps any number of top publications, prizes, professorships, and honors.
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7. cont'd ... The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.
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In summer 2022, Marc & I did a major revision of this.
New important findings, summary:
a “reasonable” business-cycle model (=able to replicate some key comovements, see below) NEEDS ALL of:
1. Endogenous entry-exit
2. Sticky prices
3. Sticky wages
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Seriously, we should now *encourage* rather than penalize the Russian scientists & artists (& their young followers) who have been dissenting voices for all these years.
Give them shelter, because real profound change in Russia can only come from them, and that's what we want.
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Football, an inexhaustible source of counterexamples to transitivity.
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Excellent development, and I think there is still space for (not really joking):
--RMS (Review of Macroeconomic Studies)
--QJM (Quarterly Journal of Macroeconomics)
--Macroeconometrica
Very excited to announce the launch of
#JPEMicro
and
#JPEMacro
- new journals in the
#JPolEcon
family!
I will be initial Lead Editor of JPE Macro, with a fantastic set of editors:
@cristinarellano
, Anmol Bhandari,
@arielburst
Chris Tonetti
@JoeVavra
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Make no mistake, Putin was behind Brexit & the rise of all nationalistic governments in (esp. eastern) Europe (possibly behind Trump too).
This is yet another step to dismantle Europe.
It is about the integrity of Europe and NATO and I am baffled by the lack of swifter action.
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Possibly the best definition of success I have read.
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Did you know? If properly used, ChatGPT can be used to quickly solve and estimate HANK models.
Here are the necessary steps. (A thread)
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22 and a half years ago I took my very first flight, to London, to start an MSc.
Now in 2022, sitting in seat 22A of a flight to London.
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Tomorrow Tue 06.04 at 6pm Moscow time (5pm CET, 11am ET), presenting
"Monetary Policy and Heterogeneity: An Analytical Framework": feedback welcome, in the middle of revising it!
Joint CBR/HSE/NES seminar, join here:
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I have a joke about macroeconomics but it is not compulsory.
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MMT, I finally got it, stands for "Money Made by Trees"
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