2025/26 Sessions

☘️Session 1  (2 October 2025)

"Household Inflation Uncertainty and Wage Growth"

Prachi Srivastava ( Central Bank of Ireland) 

Abstract: This paper investigates how subjective household inflation uncertainty shapes employed individuals’ expectations of nominal wage growth. Using microdata from the Federal Reserve Bank of New York’s Survey of Consumer Expectations (SCE), we document two findings: (i) higher individual-level inflation uncertainty is associated with higher wage growth expectations, and (ii) the effect is somewhat stronger for low-income households. To address endogeneity from wage–price dynamics, we propose an instrumental variable strategy exploiting forecast imprecision for salient goods (gasoline and food), leveraging individuals’ tendency to use “round numbers” when uncertain. To interpret these results, we develop a search-and-matching model, extending existing wage bargaining frameworks to incorporate uncertainty. In the model, nominal wages are set before inflation is realized, and risk-averse workers demand a compensating premium for bearing inflation risk. This mechanism explains why greater inflation uncertainty raises expected and negotiated nominal wage growth.

☘️Session 2  (6 November 2025)

"The losing winner: Rank effect on politician persistence in U.S. local multi-seat elections"

Stephen Doran ( Maynooth University) 

Abstract: Politicians who run again contribute to electoral competition and, if retained by voters, bring experience and institutional knowledge that benefits both the office and citizens they serve. This paper uncovers the effect of politicians' perceived electoral vulnerability on electoral participation. To overcome the subjective and context-dependent nature of candidacy decisions, I use U.S. local multi-seat election data. Here, the decision to run for local office rests with the individual and vote-share rank among winners serves as a signal for electoral strength. Incumbents who ranked lowest among the winners in the previous election may perceive themselves as more electorally vulnerable than other winners. To account for the wide spread of vote-share among winners and identify a causal relationship, I employ a Regression Discontinuity Design comparing the participation in subsequent elections of winners with the lowest vote share to those who ranked one better. Excluding maiden victories, last-ranked winners are 10-12 percentage points less likely to run again than those ranked just above them. The rank effect emerges from the second election onward, driven primarily by legislature races with notable racial heterogeneity. These findings suggest that perceived electoral vulnerability drives premature exit from public service among experienced politicians of comparable quality.

☘️Session 3  (4 November 2025)

"The Borrowing Channel of Monetary Policy"

Simone Pesce (Central Bank of Ireland) 

Abstract: This paper examines how time-varying credit spreads shape the transmission of monetary policy in heterogeneous-agent economies. I formalize this mechanism—the borrowing channel—within a sufficient statistics framework and quantify its effects using microdata on households’ unhedged interest rate exposure. Evidence from the US and Italy shows that highly indebted borrowers have lower marginal propensities to consume (MPCs), reflecting a stronger preference for debt repayment. My empirical estimates suggest that the borrowing channel dampens the redistribution effects on aggregate consumption up to 14%. Introducing countercyclical credit spreads into a two-asset HANK model attenuates the aggregate consumption response to monetary policy, primarily through general equilibrium effects on household income and the return on illiquid assets, relative to a benchmark with constant credit spreads. The channel generates state-dependent transmission depending on the share of borrowers and weakens the effectiveness of forward guidance.