Short Bio                  CV                  Teaching                  Discussions                  Students                  Twitter

FLORIN O. BILBIIE   - pronounce /bɪl/biː/ - these images may help

Professor of Economics, University of Lausanne, Switzerland; Editor, European Economic Review; Research Fellow, CEPR

Contact: florin 'dot' bilbiie ‘at’ gmail

Fields: Macro: Aggregate Demand w/ Heterogeneity and Inequality; Aggregate Supply w/ Entry and Variety; Business Cycles and Monetary and Fiscal Stabilization Policies

Research Statement: Max (Micro in Macro) s.t. Tractable

NEW version Capital, Income Inequality, and Consumption: the Missing Link, with D. Känzig and P. Surico, CEPR DP Nov. 2019, First draft Aug. 2019

NEW version Monetary Policy and Heterogeneity: An Analytical Framework, Nov. 2019; earliest version, different title ("Catch-22") Dec. 2017 CEPR DP

NEW version  Neo-Fisherian Policies and Liquidity Traps Revise and Resubmit, American Economic Journal: Macroeconomics December 2019; first version November 2018

NEW version A GHH-CRRA Utility for Macro: Complementarity, Income, and Substitution, April 2020, first version (slightly different title) March 2018, CEPR DP

SOON: The Cyclicality of Inequality and Risk in an Estimated DSGE-HANK Model, with G. Primiceri and A. Tambalotti, in progress, presented Dynare Conference 2019


Newly Published (Research by topic further below)

1. The New Keynesian Cross Journal of Monetary Economics Online Appendix (Accepted w/ major revisions April 2018); June 2018 version CEPR DP April 2017;

    First draft based on keynote lecture "Hand-to-mouth Macro" ERMAS Cluj July 2015; (previous version subtitled Understanding Monetary Policy with Hand-to-Mouth Households, or "with Two Agents")

2. Social Distancing According to TANK, Journal of Political Economy, (very) Short paper, back cover (humor) "Assume there are two types of agents. Stay away from both". Nominated by R. Bachmann

3. Monetary Neutrality with Sticky Prices and Free Entry, Sept. 2019, Review of Economics and Statistics First version May 2017, CEPR DP 12068

4. Optimal Forward Guidance American Economic Journal: Macroeconomics, Oct. 2019, first draft 2016

5. Monopoly Power and Endogenous Product Variety: Distortions and Remedies, American Economic Journal: Macroeconomics, Oct. 2019, with F. Ghironi and M. Melitz, First draft 2006

6. Is Government Spending at the Zero Lower Bound Desirable?, American Economic Journal: Macroeconomics, July 2019, with  T. Monacelli and R. Perotti, first draft 2011

7. Corrigendum of "Limited Asset Markets Participation, Monetary Policy, and (Inverted) Aggregate Demand Logic (2008 JET) Journal of Economic Theory May 2019

8. Optimal Monetary Policy and Liquidity with Heterogeneous Households , with X. Ragot, cond. accepted Review of Economic Dynamics, special issue in Honor of Alejandro Justiniano first draft 2016, Previously "Mon.Pol. and Inequality when Aggregate Demand depends on Liquidity", then "Inequality, Liquidity and Optimal Monetary Policy"


Research by topic

I.  AGGREGATE DEMAND: THANK (Tractable HANK) and TANK

"HANK Made Easy" Lecture Notes/Slides on Macro Fluctuations and Policies in T⋅HANK, Teaching material stemming from my own research

1.  Monetary Policy and Heterogeneity: An Analytical Framework, Jan 2019; NEW VERSION Supersedes Aug 2018 Heterogeneity and Determinacy: Amplification without Puzzles Dec. 2017 A Catch-22 for HANK Models: No Puzzles, No Amplification. Online APPENDIX (Determinacy, Puzzles, and Liquidity Traps in RANK)

2. The New Keynesian Cross Forthcoming, Journal of Monetary Economics with Online Appendix (Accepted w/ major revisions April 2018) June 2018 version; First CEPR DP version April 2017; First draft based on keyone lecture "Hand-to-mouth Macro" ERMAS Cluj July 2015; Previous subtitles: Understanding Mon. Pol. with: Hand-to-Mouth, or Two Agents (SLIDES nested above)

3. Optimal Monetary Policy and Liquidity with Heterogeneous Households w/ Ragot Oct 2017; Previously "Mon.Pol. and Inequality when Agg.Demand depends on Liquidity", then "Inequality, Liquidity and Optimal Mon. Policy"

All the above stem from & build on (in the context of HANK) Ch.1 of my 2004 PhD thesis (ECB-WP 408/2004, Nuffield WP 09-2005, the first analytical TANK published as:

4. Limited Asset Market Participation, Monetary Policy and (Inverted) Aggregate Demand Logic, Journal of Economic Theory, 2008 Short 2-page summary here (all you need to understand the key mechanism)Slide (also included as first slides above).

The 2005 working-paper version here (title "... Keynesian Logic") formalized, to the best of my knowledge for the first time, a "Keynesian cross" with heterogeneity in Section 2.

The version posted above emphasizes the elements that substantiate this paper's contributions (in light of the subsequent developments in the literature) as the first to (1) build an NK model with two agents (analytical TANK) modelling the distinction as: profits and Euler equation (hold assets) versus lack thereof, aka hand-to-mouththus emphasizing the key role of profits' distribution for aggregate demand (AD) amplification; (2) derive an aggregate Euler-IS (and a 3-equation TANK nesting RANK) featuring AD amplification of monetary policy MP effects with hand-to-mouth through the key role of the elasticity of individual income to aggregate income; (3) analyze the role of fiscal redistribution (of profits) for AD amplification of MP; and (4) derive a quadratic welfare function and do optimal policy in TANK.
2018 Corrigendum for 1. elasticity of individual consumption to aggregate income under fiscal redistribution of profits; and 2. second-order approx. of aggregate welfare function for optimal policy.

4'. For completion: my 2004 PhD thesis is here.

Older TANK (2004-2013): Empirical Estimation, Fiscal Multipliers, Explaining the Great Inflation, etc.

5. Asset Market Participation, Monetary Policy Rules and the Great Inflation’, with R. StraubReview of Economics and Statistics2013

6. Public Debt and Redistribution with Borrowing Constraints, with T. Monacelli and R. Perotti, The Economic Journal, 2013

7. Changes in the Output Euler Equation and Asset Markets Participation with R. StraubJournal of Economic Dynamics and Control2012

8. What Accounts for the Change in U.S. Fiscal Policy Transmission?, with G. Mueller and A. Meier, Journal of Money, Credit and Banking, 2008

9. Fiscal Policy, Business Cycles, and Labor-Market Fluctuations, with R. Straub, June 2004 MNB WP -- one of the first "TANK" papers, looking at fiscal policy.

Complementarity, comovement and fiscal multipliers: Non-separable utility U(C,L) or U(C,N)

10. Non-Separable Preferences, Fiscal Policy Puzzles and Inferior Goods, Journal of Money, Credit and Banking, 2009

11. Non-Separable Preferences, Frisch Labor Supply and the Consumption Multiplier of Government Spending: One Solution to a Fiscal Policy PuzzleJournal of Money, Credit and Banking 2011

12. A GHH-CRRA Utility for Macro: Complementarity, Income, and Substitution, April 2020, first version (slightly different title) March 2018, CEPR DP


II. AGGREGATE SUPPLY: Entry and Variety, Markups and Profits

1. Endogenous Entry, Product Variety and Business Cycles, with F. Ghironi and M. Melitz, Journal of Political Economy, 2012

2. Monopoly Power and Endogenous ProductVariety: Distortions and Remedies - w/ F. Ghironi and M. Melitz, American Economic Journal: Macroeconomics, 2019

3. Optimal Monetary Policy with Endogenous Product Variety with Ghironi and I. Fujiwara, Journal of Monetary Economics, 2014 (cited by Draghi in a speech to Nobel laureates)

4. Monetary Policy and Business Cycles with Endogenous Entry and Product Variety, with F. Ghironi and M. Melitz, NBER Macroeconomics Annual, 22, 2007

5. Monetary Neutrality with Sticky Prices and Free Entry, Revised Sept. 2019, Forthcoming, Review of Economics and Statistics First version May 2017, CEPR DP 12068


III. OPTIMAL FISCAL AND MONETARY POLICIES: in Liquidity Traps and out, time inconsistency, delegation, cooperation

1. Neo-Fisherian Policies and Liquidity Traps Revised December 2019; first version November 2018

2. Optimal Forward Guidance, American Economic Journal: Macroeconomics 2019, First draft April 2016 CEPR DP.

3. Is Government Spending at the Zero Lower Bound Desirable?, with T. Monacelli and R. Perotti American Economic Journal: Macroeconomics 2019 older NBER WP 20687 

4. Tax Cuts vs. Spending Increases: Welfare at the Zero Lower Boundwith T. Monacelli and R. Perotti - First draft December 2011; Revised coming up

5.  Delegating Optimal Monetary Policy InertiaJournal of Economic Dynamics and Control , 2014

6. The Time Inconsistency of Delegation-Based Time Inconsistency Solutions in Monetary Policy,  Journal of Optimization Theory and Applications2011

7. Designing Domestic Institutions for International Monetary Policy Cooperation: A Utopia?Journal of International Money and Finance2011