This masterclass focuses on recent theoretical advances that incorporate firm heterogeneity into endogenous growth models. Traditional macroeconomic analyses often simplify firm characteristics by using representative-agent frameworks, overlooking significant firm-level differences in productivity, innovation, market power, and pricing decisions. However, empirical analysis of important...
In modern empirical macroeconomics, structural vector autoregressions (SVARs) are routinely used to trace out the responses of macroeconomic variables to structural shocks. These structural shocks could be monetary policy shocks, tax shocks, oil price shocks, and many others. For example, central banks use SVARs to analyse the effects of interest movements on the economy. A crucial step in this...
For central banks, official communications serve as essential monetary policy instruments: In press releases, speeches, and interviews, central banks explain their decisions, manage expectations, and promote confidence in their strategy. This Weekly Report analyzes European Central Bank (ECB) communications from January 2019 to March 2025 using a specially trained artificial intelligence (AI) text ...
