What We Are Working On
Current research of the IE Economics Research Group: working papers with a downloadable draft, grouped by broad topic. Click a title to read the paper. Names of IEERG members appear in bold. Published articles are listed under Publications.
- Monetary policy, banking and macro-finance (7)
- Climate economics, carbon pricing and the green transition (9)
- Fertility, Ageing, Demographic Transition and Health (9)
- Education, technology and public policy (3)
- Development economics (2)
Monetary policy, banking and macro-finance
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Quantitative model of heterogeneous banks: differences in interest-rate risk exposure (fixed- vs variable-rate lending) matter for monetary transmission only when bank solvency concerns bind.
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Globally optimal monetary policy in a New Keynesian model with regimes of persistently higher costs (tariffs, wars, fragmentation): commitment tolerates temporary inflation, discretion creates an inflationary bias.
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Capital misallocation across heterogeneous firms with financial frictions creates a new expansion motive for monetary policy, but approximate price stability remains optimal except after cost-push shocks.
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A value-gap rule decomposes optimal sovereign debt maturity into hedging, self-insurance, credit-risk and dilution forces; hedging dominates and the model recommends longer maturities.
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Two-way interaction between wealth inequality and asset prices in a heterogeneous-agent model with aggregate risk, solved with neural networks, generating endogenous time-varying risk premia.
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In nonlinear multisector production networks the planner over-invests in upstream sectors to mitigate cascading disasters, implying a much larger welfare cost of business cycles (solved with deep learning).
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Heterogeneous-agent input-output model showing how sectoral shocks propagate through production networks and redistribute income and wealth.
Climate economics, carbon pricing and the green transition
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Empirically grounding the stochastic discount factor raises the optimal carbon price by 32% and makes it far more procyclical, reducing risk premia and precautionary saving.
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Estimated cap-and-trade DSGE on EU ETS data: abatement-cost shocks drive permit-price volatility; a Taylor-rule-like carbon cap rule cuts volatility from over 40% to under 4%.
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DSGE with renewable and non-renewable natural capital degraded by temperature: natural capital raises the social cost of carbon by about 10% relative to DICE, much more under shocks.
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Heterogeneous-agent model of the US 2050 net-zero target: long-run welfare gain but a 6-10% rise in financially constrained households; carbon-revenue redistribution smooths the transition.
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New greenness classification based on EU ETS exposure: greener Euro-area assets earn a positive premium when carbon prices are low that shrinks as policy commitment rises; climate-sentiment shocks drive returns.
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Two-sector green/brown DSGE with financial frictions: macroprudential climate risk-weights and green-tilted QE can close the welfare wedge and risk-premium distortion created by the EU ETS.
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BC's 2008 carbon tax cut PM2.5 emissions by 5-11% with large monetised co-benefits, but widened pollution-exposure disparities across income and racial groups.
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Philippines' National Greening Program (2011-2018): large-scale tree planting reduced local poverty by about 6 pp, shifted labour out of agriculture and sequestered 71-303 MtCO2.
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S&P 500 panel 2010-2020: the positive association between women on boards and environmental performance disappears under staggered DiD because firms go green before appointing women directors.
Fertility, Ageing, Demographic Transition and Health
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Lottery-based school assignment: girls placed in single-sex schools exert more effort and outperform boys in high-stakes math exams, at the cost of higher stress and worse mental health.
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Regression discontinuity with bank transaction data: a large cash transfer to new mothers in Madrid raised consumption of liquidity-constrained women without reducing their labor earnings.
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The expansion of fee-based private schooling raised the cost of child quality and, interacting with son preference, generated gender-differentiated fertility stopping that contributed to India's fertility decline.
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Staggered US joint-custody reforms and 13 million ACS observations: childhood exposure reduces adult fertility by 7 percent for both women and men, mainly via lower parenthood and couple formation.
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TV-signal coverage in early-2000s Ukraine: girls exposed to female-led superhero cartoons attain more education, choose STEM more often and hold less traditional gender stereotypes.
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Difference-in-differences using variation in US flu-vaccine quality and local vaccination rates: influenza vaccination raises employment and wages, with productivity, demand and sectoral spillover channels.
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Interview response times in SHARE predict subsequent cognitive decline, health deterioration and wealth losses among older Europeans, especially for those unaware of their own decline.
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Using the US HRS, models older workers' transitions to bridge jobs and retirement, separating health, productivity, mismatch and job-destruction risks, and quantifies the welfare cost of mismatch risk.
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Method for estimating choice models with piecewise smooth objective functions (stochastic EM), applied to joint retirement of European couples; finds complementarity between spouses in exiting the labor force.
Education, technology and public policy
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RCT of an online math tutoring programme scaled up by regional education authorities in Spain: effects are about one-third of the pilot's, quantifying the voltage drop when scaling evidence-based interventions.
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Causal effects of fiber-to-the-home broadband expansion in Spain, exploiting its staggered provincial rollout 2012-2023, on how work is organized and how households allocate time.
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Delphi consensus among 120+ researchers from 11 disciplines on adolescent mental-health trends, causal links to smartphone and social media use, and policy recommendations.
Development economics
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RCT with Guinea-Bissau's Ministry of Health: giving frontline health workers credible evidence of their programme's impact raised time in direct patient care by 39%.
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Randomised honor vs. profit recruitment messages for training traditional health practitioners as formal health agents; the profit message raises interest, especially among less religious practitioners.
Drafts are preliminary and may be updated; please cite the latest version on the authors' web pages.