Research

My research interests are in macroeconomic modelling (particularly with heterogeneous agents), determinacy, imperfect information, digital currencies, networks and, of course, monetary policy. I am affiliated with the Bank of England and the Centre for Macroeconomics.

Working papers

The Calm Policymaker: Imperfect Common Knowledge in New Keynesian Models
Latest version (May 2018):
Paper (includes appendix)
Slides (short)

Abstract:
Determinacy is ensured in the New Keynesian model when firms face imperfect common knowledge, regardless of whether the Taylor principle is satisfied. Strategic complementarity in pricing and idiosyncratic noise in firms’ signals, however small, are together sufficient to eliminate backward-looking solutions and rational bubbles without appealing to the assumptions of Blanchard and Kahn (1980). Standard solutions emerge when the Taylor principle is followed, but when it is not, the price level — and not just inflation — is stationary. Indeed, a unique and stable solution emerges when the interest rate is pegged to its steady-state value (contra Sargent and Wallace, 1975) or when the trend rate of inflation is increased (contra Ascari and Sbordone, 2014).

JEL classification: D84, E31, E52
Key words: Dispersed information, Imperfect Common Knowledge, New Keynesian, Indeterminacy, Blanchard-Kahn, Taylor rules, Taylor principle, Interest rate peg

Previous versions:
Mar 2017: Bank of England Working Paper #653: ‘The calm policymaker‘ (doesn’t include the toy model and has an error in the main proof)

May 2015: CfM Discussion Paper 2015-09: ‘Towards a New Keynesian Theory of the Price Level‘ (very old, with many errors)

Peering into the mist: social learning over an opaque observation network
Aug 2014: BoE Working Paper 503: Full Paper (incl. Appendix) [pdf]
Jun 2014: CfM Discussion Paper CFM-DP2014-9: Full Paper (incl. Appendix) [pdf]   Non-technical summary [pdf]   Slides [pdf]

Abstract:
I present a model of social learning over an exogenous, directed network that may be readily nested within broader macroeconomic models with dispersed information and combines the attributes that agents (a) act repeatedly and simultaneously; (b) are Bayes-rational; and (c) have strategic interaction in their decision rules. To overcome the challenges imposed by these requirements, I suppose that the network is opaque: agents do not know the full structure of the network, but do know the link distribution. I derive a specific law of motion for the hierarchy of aggregate expectations, which includes a role for network shocks (weighted sums of agents’ idiosyncratic shocks). The network causes agents’ beliefs to exhibit increased persistence, so that average expectations overshoot the truth following an aggregate shock. When the network is sufficiently (and plausibly) irregular, transitory idiosyncratic shocks cause persistent aggregate effects, even when agents are identically sized and do not trade.

JEL classification: C72, D82, D83, D84
Key words: dispersed information, network learning, heterogeneous agents, aggregate volatility

Publications

Innovations in payment technologies and the emergence of digital currencies‘, with Robleh Ali, Roger Clews and James Southgate. Bank of England Quarterly Bulletin, Vol. 54, No. 3, pp. 262-275.
Sep 2014: Final article [pdf] Interview with Robleh Ali [YouTube]
The economics of digital currencies‘, with Robleh Ali, Roger Clews and James Southgate. Bank of England Quarterly Bulletin, Vol. 54, No. 3, pp. 276-286.
Sep 2014: Final article [pdf] Interview with John Barrdear [YouTube]

Earlier work

My thesis can be found on LSE’s website here.