UK Stock Market, Monetary Policy, and the Real Economy

This challenge goals to evaluate the macroeconomic results of inventory costs within the UK. Particularly, it’s going to discover the consequences of UK inventory costs on: i) consumption (at completely different wealth ranges), ii) labor market outcomes (for various ability teams and industries), iii) the financial coverage response of the Financial institution of England.

For the US, utilizing textual evaluation of the Federal Open Market Committee paperwork, Cieslak and Vissing-Jorgensen (2021) doc that Fed policymakers do take note of the inventory market as they consider that inventory costs have an effect on the labor market by way of a consumption wealth impact. Whether or not that is additionally the case within the UK is an open query. However earlier than answering this query, measuring (i.e., estimating) these (wealth) results on UK consumption and the labor market would be the first step. Within the second step, the challenge will discover the minutes of the Financial Coverage Committee of the Financial institution of England to know how the Financial institution reacts to inventory market fluctuations. Within the third step, the challenge will develop a dynamic normal equilibrium mannequin, much like Çenesiz and Guimarães (2022), who present that revenue results have essential (qualitative and quantitative) results on the labor market. The mannequin will then be used to analyse various coverage related questions (e.g., optimum financial coverage).

Indicative Literature
Caballero, R.J., Simsek, A. (2024). Central banks, inventory markets, and the true economic system. NBER Working Paper No 32053.

Campbell, J.Y., Cocco, J.F. (2007). How do home costs have an effect on consumption? Proof from micro information. Journal of Financial Economics, 54 (3), 591-621.

Case, Okay.E., Quigley, J.M., Shiller, R.J. (2005). Evaluating wealth results: the inventory market versus the housing market. Advances in Macroeconomics, 5 (1).

Çenesiz, M.A., Guimarães, L. (2022). The cyclicality of job search effort in matching fashions. Oxford Financial Papers, 74(4), 1195-1213.

Cieslak, A., Vissing-Jorgensen, A., (2021). The economics of the Fed Put. The Assessment of Monetary Research, 34(9), 4045-4089.

Chodorow-Reich, G., Nenov, P.T., Simsek, A. (2021). Inventory market wealth and the true economic system: An area labor market strategy. American Financial Assessment, 111 (5), 1613-1657.

Di Maggio, M., Kermani, A., Majlesi, Okay. (2020). Inventory market returns and consumption. The Journal of Finance, 75 (6), 3175-3219.

Guren, A. M., McKay, A., Nakamura, E., Steinsson, J. (2020). Housing wealth results: The lengthy view. The Assessment of Financial Research, 88(2), 669-707.

Contact
For casual enquiries about this challenge, please contact:  Dr Dimitrios Bakas ([email protected]) and Dr Alper Cenesiz ([email protected])

Entry {qualifications}

Entrants will need to have an undergraduate diploma in Economics or associated research and/or, ideally, a postgraduate diploma in Economics or Finance, with superb data of econometrics/mathematical modelling and expertise in macroeconometrics utilizing econometrics software program.

Charges and funding

It is a self-funded PhD challenge for UK candidates.