A Methodological Exploration of Financial and Economic Crises
Maeder, Nicolas
0000-0002-2488-8732
:
2020-06-16
Abstract
Following the 2008 Financial Crisis, the field of Macroeconomics entered a remarkable phase of methodological transformation. The reason for this is twofold. First, the standard approach of locally approximating equilibrium near a deterministic steady state is naturally ill-suited to incorporate occasionally binding constraints, multiple equilibria, or multiple steady states at least one of which is typically required to motivate occasional crisis episodes. Second, a consensus has emerged that in addition to the longitudinal evolution of aggregates such as output and inflation, macroeconomics further also ought to be able to address statistics that represent cross-sectional inequality. Therefore, since providing meaningful insights into deep downturns requires a set of tools that have historically been non-standard, my dissertation’s topical focus of financial and economic crises has naturally lent itself to be complemented by an appraisal of contemporary macroeconomic methodology.