The Department of Economics is proud to announce that Dr. Francesco Zanetti has been awarded a Mid-Career Fellowship Award from the British Academy.
Governments and central banks around the world use fiscal and monetary policies to stabilize the economy and foster growth. Expansionary fiscal and monetary policies are considered primary tools to stimulate output in recessions, while contractionary policies are used to prevent overheating of the economy and avert the rise in inflation that is detrimental to growth. Recent studies challenge this common perception, and show that the effect of economic policies changes over the business cycle. Despite the large and contrasting evidence, there is no theory to explain the changes in the effect and interactions of fiscal and monetary policies, which are essential for the effectiveness of economic policy.
This project will develop a new framework to study and empirically quantify the change and interactions in the effect of economic policies. The findings will improve the understanding on the effect of important economic policies and provide guidance to policymakers.