The workshop discussed important open questions in different areas of macro finance. The ultimate aim was to stimulate novel research ideas on how to address the big open questions in the field. With this goal in mind, the workshop was informal and interactive. Unlike at a typical conference, speakers did not present individual papers. Instead, a senior academic, the session chair, began each session with a brief introduction to an area of research. Thereafter, younger researchers presented discussions of key questions and recent approaches to important research questions. At the end of each session, participants engaged in an open discussion moderated by the chair. The first session discussed financial intermediaries, including the constraints they face and their influence on macroeconomic outcomes; the second focused on households, including their balance sheets, financial constraints, and beliefs; the third analyzed firms, including their production activities on the asset side and borrowing constraints on the liability side; and the final session discussed the relationship between empirical work based on micro data and general equilibrium, aggregate outcomes.

A recurring theme was that rich new data have allowed researchers to uncover new facts. First, empirical studies point to elements that were not fully considered by classic economic models developed in the 20th century, such as the importance of mortgages for household decision-making, the relevance of earnings-based borrowing constraints for firms, and potential deviations from rational expectations. Second, there exists significant heterogeneity within each of the financial, household, and firm sectors (e.g., differences in the types of assets and debt held by financial institutions, households, and firms; the strength of their overall balance sheets; the expectations they hold about uncertain future outcomes). Third, the US economy is evolving over time, with increasing prominence of fintechs in the financial sector and intangible assets in the firm sector, to name a few examples. An important challenge is distilling the complex evidence into key aspects that can be incorporated in tractable models to perform general equilibrium analyses. Looking forward, both theorists and empiricists advocated greater cooperation among each other, with the hope that micro data analyzed in clever ways can produce key inputs into theoretical models.

Summary of Open Discussions