RESEARCH

Working papers

Switching-track after the Great Recession

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(Joint with Omar Licandro)

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Centre for Finance, Credit and Macroeconomics (CFCM)

20/02 Working Paper

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Barcelona GSE Working Paper: 1260 | May 2021

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CESifo Working Paper No. 9107 | May 2021

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Latest Version 

We propose a theoretical framework to reconcile episodes of V-shaped and L-shaped recovery, encompassing the behaviour of the U.S. economy before and after the Great Recession. In a DSGE model with endogenous growth, negative demand shocks destroy productive capacity, moving GDP to a lower trajectory. A Taylor rule policy designed to reduce the output gap may counterbalance the shocks, preventing the destruction of economic capacity and inducing a V-shaped recovery. However, when shocks are deep and persistent enough, like during the Great Recession, they call for a downward revision of potential output measures, the so-called switching-track, weakening the recovering role of monetary policy and inducing an L-shaped recovery. When calibrated to the U.S. economy, the model replicates well the L-shaped recovery and switching-track that followed the Great Recession, as well as the V-shaped recoveries that followed the oil shock recessions.

The Economy after the Fall: Less Innovative, Less Intangible

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(Joint with Maren Froemel)

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The rise of intangible investment across advanced countries is a well-documented fact. This paper contributes empirical evidence to the recent theoretical literature evaluating the role of intangible investment on firm behaviour, over the long run and after negative shocks.

We pose two research questions:

1. Does intangible intensity matter for firm growth?

2. Was the rise of intangible intensity accelerated or slowed down by the Great Recession?

We document a positive link between investment in R&D as well as firm specific intangibles and firm growth, for both innovative and non-innovative firms in the United States. Furthermore, we find that the Great Recession led to a deceleration of the rise of intangible intensity, driven by a slowdown in innovation intensity. This paper thus contributes to the literature by providing

evidence reinforcing the theoretical notion that intangibles matter for long run growth, and by offering new insights on the medium to long run scarring effects of recessions.

TEACHING

Graduate Teaching Assistant/Fellow

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I received certified training from the Economics Network  in 2017 and 2018

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Teaching Excellence Award 2017/2018 and 2018/2019

(University of Nottingham)