Programs & Papers

You're Invited: Calvó-Armengol Prize Lecture

Benjamin Moll (London School of Economics) has been awarded the eighth Calvó-Armengol International Prize for his groundbreaking contributions on the role of heterogeneity, whether pertaining to individuals or the constraints they face.

The heterogeneity that Professor Moll explores in his research refers to the wealth gap that exists between countries and also between individuals within a country. He uses micro-level data to understand how income and wealth disparities impact the macro economy and macroeconomic policy.

"Heterogeneous Agent Macroeconomics: Eight Lessons and a Challenge"

In his Calvó-Armengol Prize Lecture, Professor Moll will summarize eight lessons about macroeconomic stabilization policies that have emerged from the heterogeneous-agent literature, specifically from Heterogeneous Agent New Keynesian (HANK) models: four lessons for monetary policy and four lessons for fiscal policy.

Professor Moll will then pose a challenge for future research that results from a problematic feature of current heterogeneous agent models: the assumption of rational expectations about equilibrium prices, which implies that the entire cross-sectional distribution enters agents’ decision problems, thereby hugely increasing the models’ computational complexity and hampering their applications to important topics like financial crises. But the rational-expectations assumption is nonsensical in heterogeneous-agent models: economic agents self-evidently do not forecast prices like interest rates by forecasting distributions (nor do they do this by forecasting moments of distributions). The challenge is to develop alternative approaches to replace the rational expectations assumption and I outline some criteria for doing so.

About the Calvó-Armengol International Prize in Economics

The Calvó-Armengol International Prize memorializes Antoni Calvó-Armengol, who passed away in 2007 at 37 years of age. A native of Andorra, Calvó-Armengol was a professor at Universitat Autònoma de Barcelona and the Barcelona School of Economics who made outstanding contributions in social economics.

The Calvó-Armengol Prize is awarded every two years to an economist or other social scientist who is not older than 40 years old for their contributions to the understanding of social structure and its implications for economic interactions.

The Prize is promoted by the Barcelona School of Economics and the Government of Andorra. This edition receives support from the Severo Ochoa Research Excellence Program.