Professor of Macroeconomics, University of Cambridge; Official Fellow, Clare Hall; Research Fellow, CEPR

CV                Contact: florin 'dot' bilbiie ‘at’ gmail Twitter

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! HANKSSON, with Sigurd Galaasen, Refet Gürkaynak, Mathis Mæhlum and Krisztina Molnar, CEPR DP, Presented SED 2024

NEW: Inequality and Macroeconomic Fluctuations and Policies: A Tractable Heterogeneous-Agent New Keynesian (THANK) Approach, Harry Johnson Keynote Lecture at MMF Annual Conference, Manchester Sept. 6th 2024 (Slides)  

NEW ACCEPTANCE! Monetary Policy and Heterogeneity: An Analytical Framework, Forthcoming, Review of Economic Studies

NEW ACCEPTANCE! Stabilization vs. Redistribution: The Optimal Monetary-Fiscal Mix, with T. Monacelli and R. Perotti, Journal of Monetary Economics Revised June 2024, Supersedes 2011 Tax Cuts vs. Spending Increases: Welfare at the Zero Lower Bound

NEW ACCEPTANCE! Sticky Prices or Sticky Wages? An Equivalence Result with M. Trabandt, CEPR DP, Oct. 2023, Revised JuNov. 2024, Accepted, Review of Economics and Statistics

NEW R&R! Aggregate-Demand Amplification of Supply Disruptions: The Entry-Exit Multiplier, with M. Melitz, R&R, Review of Economic Studies SLIDES Dec. 2020, revised October 2022 NBER WP, CEPR DP

NEW R&R! Greed? Profits, Inflation, and Aggregate Demand, with D. Känzig, R&R American Economic Journal: Macroeconomics CEPR DP, Aug. 2023, Revised May 2024 Slides

NEW R&R! HALT: Heterogeneous-Agent Liquidity Traps, Oct 2021, R&R  Journal of Monetary Economics CEPR DP 16625 (earliest preliminary version Aug. 2017)

NEW! Inequality and Business Cycles, with G. Primiceri & A. Tambalotti, Sept. 2023, 1st draft May 2022

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

Newly Published, post-2019 (Research by topic further below)

1. Monetary Policy and Heterogeneity: An Analytical Framework, Forthcoming, Review of Economic Studies, Revised March 2024; earliest, different title ("Catch-22") Dec. 2017 CEPR DP

2. The New Keynesian Cross Journal of Monetary Economics 2021 Best Paper Award 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, July 2021, 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 , w/ X. Ragot, Review of Economic Dynamics, 2021 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"

9. Fiscal Policy in Europe: Controversies over Rules, Mutual Insurance, and Centralization, with T. Monacelli and R. Perotti, Spring 2021, Journal of Economics Perspectives

10. Neo-Fisherian Policies and Liquidity Traps American Economic Journal: Macroeconomics, October 2022; SLIDES first version November 2018 CEPR DP

11. Capital and Income Inequality: An Aggregate-Demand Complementarity w/ D. Känzig and P. Surico, Journal of Monetary Economics March 2022  SLIDES CEPR DP Aug. 2019

12. Stabilization vs. Redistribution: The Optimal Monetary-Fiscal Mix, with T. Monacelli and R. Perotti, Journal of Monetary Economics Revised June 2024

13. Sticky Prices or Sticky Wages? An Equivalence Result with M. Trabandt, 2024 Accepted, Review of Economics and Statistics

Research by topic

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

"HANK Made Easy" (revised June 2021) 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, Accepted, Review of Economic Studies; 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, Journal of Monetary Economics 2021 Best Paper Award; 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, Review of Economic Dynamics; Previously "Inequality, Liquidity and Optimal Mon. Policy"

4. Capital and Income Inequality: An Aggregate-Demand Complementarity w/ D. Känzig & P. Surico, 2022, Journal of Monetary Economics  SLIDES CEPR DP Aug. 2019

5. Stabilization vs. Redistribution: The Optimal Monetary-Fiscal Mix, with T. Monacelli and R. Perotti, Accepted, Journal of Monetary Economics Revised June 2024

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:

6. Limited Asset Market Participation, Monetary Policy and (Inverted) Aggregate Demand Logic, Journal of Economic Theory, 2008 Most cited 2008 JET (GS, Repec); 14th most relevant JET CitEc here; 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-mouth—thus 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.

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

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

7. Asset Market Participation, Monetary Policy Rules and the Great Inflation’, with R. Straub, Review of Economics and Statistics. 2013 (old!) Slides

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

9. Changes in the Output Euler Equation and Asset Markets Participation with R. Straub, Journal of Economic Dynamics and Control, 2012

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

11. 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)

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

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

14. 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. Monetary Policy and Business Cycles with Endogenous Entry and Product Variety, with F. Ghironi and M. Melitz, NBER Macroeconomics Annual, 22, 2007 Appendix here (covers model details and Phillips curve under: flex-price entrants, and non-CES general homothetic preferences)

2. Endogenous Entry, Product Variety and Business Cycles, with F. Ghironi and M. Melitz, Journal of Political Economy, 2012 (1st version 2005)

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. Monopoly Power and Endogenous Product Variety: Distortions and Remedies w/ Ghironi and M. Melitz, American Economic Journal: Macroeconomics 2019 (1st version 2006)

5. Monetary Neutrality with Sticky Prices and Free Entry, 2021 Review of Economics and Statistics (1st version 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 American Economic Journal: Macroeconomics, Oct 2022; SLIDES first version November 2018 CEPR DP

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 Bound, with T. Monacelli and R. Perotti - 1st draft December 2011; Revised 2020 Stabilization vs. Redistribution: The Optimal Monetary-Fiscal Mix

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

6. The Time Inconsistency of Delegation-Based Time Inconsistency Solutions in Monetary Policy, Journal of Optimization Theory and Applications, 2011

7. Designing Domestic Institutions for International Monetary Policy Cooperation: A Utopia?’, Journal of International Money and Finance, 2011 (MSc Thesis Warwick 2000)