Becker Friedman Institute
for Research in Economics
The University of Chicago

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Thirteen Scholars Awarded Fellowships to Study Macrofinance

The Becker Friedman Institute’s Macro Financial Modeling Initiative has announced the recipients of this year's dissertation fellowships. Thirteen promising new scholars from universities across the United States and Europe were chosen from a highly competitive pool of applicants to receive funding for their MFM research. The project, supported by the Alfred P. Sloan Foundation , CME Group Foundation and Fidelity Management & Research Company, provides dissertation support for doctoral students who are working to advance macroeconomic models with financial sector linkages.

The 2017 awardees are studying an impressive range of research questions, with dissertation subjects including bank consolidation and credit expansion, household finance, institutional risk management, and corporate debt and transmission of unemployment risk.

"Supporting early career scholars is one of the key goals of the Macro Financial Modeling Program," says Lars Peter Hansen, the David Rockefeller Distinguished Service Professor in Economics, Statistics, and the College and Research Director of the Becker Friedman Institute for Research in Economics. "These awards recognize the contributions that graduate students are making in the field of macroeconomics and finance, and the fellowship process serves as a vehicle to preview some of the cutting-edge work in the field. We look forward to learning more about their progress and potential breakthroughs in their dissertations."

Sasha Indarte, a PhD candidate at Northwestern University and one of this year’s grantees, says the funding will ease her teaching burdens and allow her to focus on her research studying the effect of bank consolidation on lending standards.

As high school student in Minnesota during the 2008 financial crisis, Indarte saw people she knew losing their jobs and heard disturbing discussions of another Great Depression. That experience inspired her to pursue a career investigating elements of financial crises.

Her current research, which she hopes will be the cornerstone of her dissertation, evaluates large declines in the number of U.S. banks – down more than 50 percent since the 1980s – despite a growing population. Alongside this banking trend, researchers have observed interesting changes in household credit; lower income borrowers are seeking more credit for different types of activities. “My aim is to understand if consolidation is one of the reasons credit has expanded to riskier populations by looking at how borrower and loan characteristics change after bank mergers,” she explains.

Daniel Green, a PhD student in finance at the Sloan School of Management at MIT, was similarly troubled by the 2008 financial crisis and fascinated by the slew of policies that injected billions of dollars into the financial sector, affecting not only financial markets, but the broader economy as well.

Green’s MFM project examines how the type of information available to credit institutions affects lending decisions. For instance, does information about the broader economy versus individual contracts affect the types of industry or the riskiness of projects that a lender will finance, and do those decisions have aggregate implications for the overall economy?

Quentin Vandeweyer is taking a slightly different, more computational approach to his research, illustrating the breadth and diversity of activities supported by the MFM fellowship initiative. As part of his PhD work at Sciences Po in Paris, he is working on an innovative methodology to account for heterogeneous incentives and behaviors that the financial sector may have as both a creator of liquidity and a manager of risk.

Vandeweyer’s research interests position him at the intersection of macro, finance, and monetary economics. As an MFM Summer Camp alumnus (2016), he is setting his roots firmly within the MFM community. “I am, of course, delighted to win the fellowship. A big part of growth in research is the interaction you have with different people along the way. The MFM initiative provides a forum for discussion and exchange of ideas between very smart people with similar concerns and interests.”

In addition to Indarte, Green, and Vandeweyer, 2017-18 awardees include:

Carlos Avenancio-Leon, University of California, Berkeley

Sarita Bunsupha, Harvard University

Cristian Fuenzalida, New York University

Paul Ho, Princeton University

Adam Jorring, University of Chicago

Yann Koby, Princeton University

Anton Petukhov, Massachusetts Institute of Technology Sloan School of Business

Julian Richers, Boston University

Samuel Rosen, University of North Carolina at Chapel Hill

Ishita Sen, London Business School

— Tina A. Cormier

Macro Financial Modeling dissertation support is provided annually to doctoral students who are working toward improved and more comprehensive models of systemic risk in the financial sector that can impact the broader economy. The application deadline for the next round of funding is February 10, 2018.