UW News

December 11, 2017

Thoughts on macroeconomics by UW’s Fabio Ghironi among Bloomberg columnist’s ‘must-reads’ of 2017

UW News

Bloomberg News columnist Noah Smith has listed a paper by University of Washington economist Fabio Ghironi as among “must-read” papers and books on economics in the year 2017.

Ghironi is a professor of economics who studies monetary economics and international macroeconomics — which, in keeping with its name, looks at the performance of economies as a whole, noting such factors as inflation, growth rates and gross domestic products.

His paper, “Macro Needs Micro,” was circulated in September in the Discussion Papers series of the London-based Centre for Economic Policy Research and in the Working Papers series of the Cambridge-based National Bureau of Economic Research. It will be published in January in a symposium issue of the Oxford Review of Economic Policy on “Rebuilding Macroeconomic Theory.”

Smith, a former assistant professor of finance at Stony Brook University, wrote that in 2017 economic theorizing “took a back seat” to political struggle. “But even as attention was focused on policy battles over health care and tax reform, economists were quietly talking about how to make the economy more productive and more equal.” He offered a list of “some great books and papers that emerged from this turbulent year.”

Smith cited Ghironi’s paper in a section titled “The Ongoing Macro Debate.” Economic debates over macroeconomics have been out of the news since the Great Recession, Smith wrote, but academic economists are still “quietly debating” whether the dominant theory of macroeconomics — called dynamic stochastic general equilibrium — “has been overused or misapplied.”

Ghironi, the Paul F. Glaser professor of economics, summed up the statement of his paper in this way: “Macroeconomics has been the subject of much criticism since the crisis of 2008-09. Some is fair, some is not. In ‘Macro Needs Micro’ I offer my perspective on how macroeconomics has been changing and should continue to change to address current and future policy-relevant questions.”

The Centre for Economic Policy Research, with which Ghironi is a research fellow, produced a podcast where he is interviewed on “the need to incorporate more microeconomics to macroeconomics.” Listen to that podcast here.

Ghironi will be in good company publishing in the Oxford Review of Economic Policy’s issue on rebuilding macroeconomic theory; other contributors include Nobel Laureates Paul Krugman and Joseph Stiglitz and Oliver Blanchard, former chief economist for the International Monetary Fund, among others.


For more information about Ghironi and his work, contact him at ghiro@uw.edu.