Name: Conference in Honor of Robert E. Lucas Jr.
Start: 2016-10-07T00:00:00+00:00
End: 2016-10-08T23:59:59+00:00
Location: Saieh Hall for Economics

Event Recap

Nobel laureate Robert E. Lucas will be awarded the University of Chicago’s rare and prestigious Division of Social Science Phoenix Prize in recognition of his influential contributions to changing the field of economics.

To commemorate this award, the Becker Friedman Institute, the Department of Economics, and the Division of the Social Sciences are hosting a conference in his honor at the University of Chicago. Distinguished colleagues and coauthors will participate in this research conference exploring the impact of Lucas’s work.

Agenda

Friday, October 7, 2016

On the Optimality of Financial Repression

There has been a long history of governments forcing banks to hold their debt in times of extreme need. This constraint, which Chari labels financial repression, is most often seen in wartime, when government spending is suddenly very high.

V.V. Chari presented a paper that asks if this is an efficient way to raise money, and if so, under what circumstances. He shows that if a government can commit to repaying its bonds, this is not an efficient way to raise government revenue. A government would be better off taxing capital directly. Forcing banks to hold government debt at below-market rates has the same distorting effects as a tax on capital, but also leaves the banks more collateral-constrained than before, thus reducing investment even further.

However, if the government cannot commit to repaying its bonds, forcing banks to hold government bonds may be a useful policy tool. Why? A government bond default has different effects depending on whether the bonds are held by individuals or by banks. Defaults on individual holdings are costless socially, but defaults on banks reduce capital investment. If the government forces the banks to hold its bonds, it places itself in a position where default is more costly. Thus, constraining banks to hold government bonds is a way governments can raise barriers and disincentives for future defaults.

The resulting pattern emerges: when there is a very high need for government spending—due to a major war, for example—the government will force banks to hold its bonds. This constraint is only needed when the outstanding supply of bonds is very high, and will typically be removed when government spending returns to normal levels.

Governments facing wide swings in spending are more likely to need to use this strategy. But if the swings are high enough, financial repression can help the government retain the credibility of its bonds.

V.V. Chari, University of Minnesota

Discussant: Jean Pierre Danthine

Presentation Slides

Monetary Policy According to HANK

Benjamin Moll, London School of Economics, Princeton University

Discussant: Lee Ohanian

Commuting, Migration, and Local Employment Elasticities

Esteban Rossi-Hansberg, Theodore A. Wells '29 Professor of Economics and International Affairs, Princeton University

Discussant: Marcel Boyer

Luncheon Talk

Neil Wallace, Pennsylvania State University

Presentation Slides

Reputation and Product Recalls

Boyan Jovanovic, New York University

Discussant: Christopher Phelan

Random Risk Aversion and Liquidity: a Model of Asset Pricing and Trade Volumes

Andrew Atkeson, Stanley M. Zimmerman Professor of Economics and Finance, University of California, Los Angeles

John H. Cochrane, Senior Fellow, Hoover Institution at Stanford University

Saturday, October 8, 2016

Technology, Skill, and Long-Run Growth

Nancy Stokey, The Frederick Henry Prince Distinguished Service Professor in Economics and the College, the Kenneth C. Griffin Department of Economics

José A. Scheinkman, Edwin W. Rickert Professor of Economics, Columbia University

Social Insurance, Information Revelation, and Lack of Commitment

Mikhail Golosov, The Homer J. Livingston Professor in Economics and the College, the Kenneth C. Griffin Department of Economics

Juan Pablo Nicolini, Senior Research Economist, Federal Reserve Bank of Minneapolis

The Global Diffusion of Ideas

Video

Francisco Buera, University of California, Berkeley; Federal Reserve Bank of Chicago

Luncheon Talk

Edward S. Prescott, Arizona State University

More on the Taxation of Capital Income

Pedro Teles, Universidade Católica Portuguesa

Discussant: Iván Werning

Conference in Honor of Robert E. Lucas Jr.

Event Recap

Agenda

Friday, October 7, 2016

On the Optimality of Financial Repression

Monetary Policy According to HANK

Commuting, Migration, and Local Employment Elasticities

Luncheon Talk

Reputation and Product Recalls

Random Risk Aversion and Liquidity: a Model of Asset Pricing and Trade Volumes

Saturday, October 8, 2016

Technology, Skill, and Long-Run Growth

Social Insurance, Information Revelation, and Lack of Commitment

The Global Diffusion of Ideas

Luncheon Talk

More on the Taxation of Capital Income

Women in Empirical Microeconomics Conference

Development Lunch Workshop – Fall 2023

Inflation Expectations: Determinants and Consequences Conference

Macro Financial Modeling Meeting Spring 2012

Modeling Financial Sector Linkages to the Macroeconomy

Macro Financial Modeling Meeting Spring 2013