Andrea Ferrero is a Professor of Economics in the Department of Economics at the University of Oxford and the Levine Fellow in Economics at Trinity College Oxford, where he teaches undergraduate and graduate macroeconomics.
He holds a BA in Economics from Bocconi University, an MSc in Economics from Universitat Pompeu Fabra, and a Phd in Economics from New York University.
Before joining Oxford in September 2013, Andrea spent seven years in the Research Department at the Federal Reserve Bank of New York, first as an Economist and then as a Senior Economist. He was a visiting scholar at NYU Stern in the Winter/Spring of 2012 and at EIEF Rome in the Spring of 2016. He also held visiting teaching positions at NYU, IMT Lucca, and IHS Vienna. He is currently an academic consultant for the Bank of England and was a consultant the Norges Bank between 2014 and 2016.
His research interests are in the areas of Monetary Economics and International Macroeconomics. Among other topics, he has worked on policy options in a currency union, the determinants and implications of global imbalances, and the macroeconomic impact of the Fed unconventional policies. His research has appeared in top professional outlets, including the American Economic Review, the Economic Journal, and the Journal of Monetary Economics.
His current research focuses on monetary policy and financial frictions in closed and open economy, and on the determinants of low real interest rates.
Oxford Research Encyclopedia of Economics and Finance
Notes on the underground: monetary policy in resource-rich economies
Journal of Money, Credit and Banking
The central bank of a commodity‐exporting small open economy faces the traditional trade‐off between domestic inflation and output gap. The commodity sector introduces a terms‐of‐trade inefficiency that gives rise to an endogenous cost‐push shock, changes the target level for output, reduces the slope of the Phillips curve, and increases the importance of stabilizing the output gap. Optimal monetary policy calls for a reduction of the interest rate following a drop in the oil price. In contrast, a central bank with a mandate to stabilize consumer price inflation raises interest rates to limit the inflationary impact of an exchange rate depreciation.
monetary policy, oil export, small open economy
International credit supply shocks
Journal of International Economics
The Great Escape? A Quantitative Evaluation of the Fed's Liquidity Facilities
The American Economic Review
We introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: Can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated with the 2008 U.S. financial crisis? Once the nominal interest rate reaches the zero bound, what are the effects of interventions in which the government provides liquidity in exchange for illiquid private paper? We find that the effects of the liquidity shock can be large, and show some numerical examples in which the liquidity facilities prevented a repeat of the Great Depression in 2008-2009.
Demographics and Real Interest Rates: Inspecting the Mechanism
European Economic Review
The demographic transition can affect the equilibrium real interest rate through three channels. An increase in longevity---or expectations thereof---puts downward pressure on the real interest rate, as agents build up their savings in anticipation of a longer retirement period. A reduction in the population growth rate has two counteracting effects. On the one hand, capital per-worker rises, thus inducing lower real interest rates through a reduction in the marginal product of capital. On the other hand, the decline in population growth eventually leads to a higher dependency ratio (the fraction of retirees to workers). Because retirees save less than workers, this compositional effect lowers the aggregate savings rate and pushes real rates up. We calibrate a tractable life-cycle model to capture salient features of the demographic transition in developed economies, and find that its overall effect is a reduction of the equilibrium interest rate by at least one and a half percentage points between 1990 and 2014. Demographic trends have important implications for the conduct of monetary policy, especially in light of the zero lower bound on nominal interest rates. Other policies can offset the negative effects of the demographic transition on real rates with different degrees of success.
Life expectancy, Population growth, Demographic transition, Real interest rate, Monetary policy, Zero lower bound, Secular Stagnation
How should monetary policy respond to a commodity price shock in a resource-rich economy? As in the baseline New Keynesian model, the central bank of a small oil-exporting economy faces a tradeo between the stabilization of domestic ination and an appropriately defined output gap. But in our framework the output gap depends on oil technology, and the weight on output gap stabilization is increasing in the importance of the oil sector. Given substantial spillovers to the rest of the economy, optimal policy calls for a reduction of the interest rate following a drop in the oil price. In contrast, a central bank with a mandate to stabilize consumer price inflation would raise interest rates to limit the inationary impact of an exchange rate depreciation.