Becker Friedman Institute
for Research in Economics
The University of Chicago

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Lenel to Pursue Macro Finance Studies as a Chicago Research Fellow

Moritz Lenel, a 2014 Macro Financial Modeling Initiative dissertation fellowship recipient, will deepen and extend his research as a 2017–18 Chicago Research Fellow at the Becker Friedman Institute for Research in Economics.
 
Lenel initially leaned toward studying physics until his last year of high-school.“It wasn’t until I attended some lectures during my last year of high school that I decided that economics, and in particular macroeconomics, felt more interesting to me,” Lenel said.
 
Given a parallel interest in politics, Lenel liked the idea that studying economics would help him answer policy questions. One area that sparked his interest was the differences in international responses to economic issues. For example, Germany was successful in transforming its economy starting in 2003 amidst a western European climate plagued by high unemployment and slow growth.
 
“In the years before, the German government had implemented a set of reforms to labor markets and the welfare system; economics seemed to offer the tools to think about these policies,” he said.
 
Lenel’s research interests have evolved significantly throughout his studies; he currently focuses on financial intermediation and house hold finance. Banks and the financial system were not part of his undergraduate curriculum, but the financial crisis of 2008 showed him that there may be some first order interactions between the financial system and the real economy, even in a developed country such as the United States.
 
He started his master’s degree in Barcelona shortly after the crisis and encountered several economists at the Center for Research in International Economics (CREI) who were already actively studying this intersection of macroeconomics and financial markets. He credits them with furthering his interests in macrofinance and encouraging him to pursue his PhD in the United States; he completed his degree at Stanford University in the spring of 2017.
 
 “During the PhD, I took classes in both macroeconomics and finance, and I found advisers that gave me the guidance and support to approach the questions that I was interested in,” he says.
 
Lenel is presently exploring issues around how quantities of safe bonds affect interest rates and asset prices. Economists are working to betterunderstand the effects of central bank bond purchases during episodes of quantitative easing; his dissertation analyzes one particular channel that works through the use of safe bonds as collateral in financial markets. He plans to continue studying transmission channels of monetary policy through financial markets; he finds this an area with many exciting questions and few definite answers.
 
In 2014, Lenel was awarded a Macro Financial Modeling Initiative dissertation fellowship, which had great influence on his research. "When applying for the MFM fellowship, I was interested in understanding the systemic risks that arise in collateralized lending markets, and in particular in the question of whether policy makers can learn about the build-up of risks in these markets ,” he said. “The MFM support gave me the resources to collect the necessary data to
start that analysis.”
 
Lenel was struck by the fact that leveraged investors, like hedge funds, were mostly using government-backed securities as collateral and decided that he had to first understand this collateral choice.
 
“I developed a quantitative model of repurchase markets, which then became the main chapter of my thesis,” he explained. “With that framework at hand, I will now continue my original research agenda.”
 
The MFM support has therefore had long lasting effects on Lenel’s research, not only by providing necessary resources but also by stimulating his interest in understanding the macroeconomic risks that can arise in the financial sector. The financial support was only one benefit, Lenel stresses. Receiving the dissertation support brought him into the MFM community. At its conferences and meetings, he connected with some of the best and most prominent economists in his area and also with young scholars at similar stage in their academic careers, who shared his interests.
 
Lenel finds macro- finance an exciting field to be in, given the scope of research questions. While he has not yet started to formally collaborate with fellow MFM scholars, he has established many academic friendships within the community. He hopes the connections he has made through MFM will flourish into research projects later in his career.
 
“The MFM program brings this community together, joint not by common methods, but by common interests, and it allows us young researchers to be part of that community early on, which has been a great luxury,” Lenel said.
 
Lenel is pleased to have further opportunities to advance his work as a Chicago Research Fellow at the Becker Friedman Institute are postdoctoral scholars and early career faculty who are recognized for their potential contributions to the field of economics. Selected scholars are offered a one-or two-year position funded position free of teaching responsibilities, to deepen and broaden their research before they begin a faculty position.
 
The opportunity to focus on research at this stage of their scholarship positions them to leverage the rich collaborative environment and resources of the University of Chicago in pursuing foundational projects that will inform their career's body of work. The program further positions the BFI as the premier locus for emerging leadership in Economics.
 
Having seen the value of his work emerge as a MFM dissertation support recipient, the institute is delighted to welcome Lenel as a 2017–18 Research Fellow in July.
 
—Diana Petrova