Speaker: Dr Federica Romei (University of Oxford)
Hosted by: University of Liverpool Management School's Economics Group
Open to: Management School PhD students and academic staff, with no sign up needed
Date: Wednesday 28 February 2024
Time: 2-3.15pm
Place: Sherrington Building, Ashton Street - Seminar Room 1
Abstract
We argue that demand composition between tradable and non-tradable goods and services significantly impacts the transmission and efficacy of monetary policy. We proceed in three steps.
First, using identified shocks to monetary policy in the Eurozone, we show that the output responses to shocks are larger for countries with lower shares of non-tradable consumption.
Second, using micro-level data on income and consumption, we document that richer households allocate a greater share of their expenditures to non-tradables and that non-tradables account for a larger share of total consumption in countries with higher income inequality.
Third, we show our macro and micro findings can be rationalized by simply adding non-homothetic preferences into an otherwise standard model of a small open economy with incomplete markets and heterogeneous agents.
Finally, we study the implications of our findings for optimal stabilization policy.
Speaker
Federica Romei is an Associate Professor of Economics at the University of Oxford.
She gained her Ph.D. in Economics from LUISS Guido Carli in 2014. Subsequently, she was a Max Weber/Jean Monnet fellow at the European University Institute.
In September 2015 she joined the Department of Economics of the Stockholm School of Economics as Assistant Professor.
In 2016, she became Research Affiliate at the Center for Economic Policy Research. Between 2017 and 2018 she was a Visiting Scholar at the Banco de Espana.
In September 2020 she joined Hertford College as Tutorial Fellow and the Department of Economics of the University of Oxford as Associate Professor of Economics.
Federica's primary fields of research are in monetary economics and international economics.
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