Dr Francesco Zanetti (University of Oxford)

Modelling the labour markets and spare capacity in macroeconomics: theory and policy applications

Dr Francesco Zanetti, Associate Professor of Economics at the University of Oxford

Dr Francesco Zanetti (University of Oxford) profile photo

Date: 21 – 22 September 2023
Location: Hybrid –University of Glasgow campus and Online

This course is designed to introduce participants to the theory and analytical tools to develop models with unemployment and spare capacity to study their influence on aggregate fluctuations and economic policies. The course will focus on the search and matching theory in labour and goods markets and the role that search frictions play for the effect of monetary and fiscal policies. Applications will include practical sessions to solve and simulate models with focus on macroeconomic policies.

Who should attend

Economist interested in macro-labor, economic modelling, and : the effect of economic policies.

Course level

Intermediate / advanced

Software requirements

Matlab (basic knowledge)

Course structure

Learning outcomes

By the end of this course, you will be able to:

  • Develop models to study the effect of policy and exogenous disturbances on unemployment and labor market variables.
  • Use state-of-the-arts methods to operate models.
  • Link spare capacity in goods and labor markets to the effectiveness of economic policies.

Topics covered

  • The Diamond-Mortensen-Pissarides (DMP) model of the labor market.
  • Exogenous and endogenous separations in labor market models.
  • Search in the goods markets with applications to fiscal policy.
  • The effect of labor market institutions with applications to monetary policy.


Pissarides, C., 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press.

Ghassibe, M. and Zanetti, F. 2022. "State dependence of fiscal multipliers: the source of fluctuations matters," Journal of Monetary Economics, Elsevier, vol. 132(C), pages 1-23.

Michaillat, P. and Saez, E. 2015. "Aggregate Demand, Idle Time, and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 130(2), pages 507-569.

Thomas, C. and Zanetti, F., 2009. "Labor market reform and price stability: An application to the Euro Area," Journal of Monetary Economics, Elsevier, vol. 56(6), pages 885-899.

Zanetti, F., 2011. "Labor market institutions and aggregate fluctuations in a search and matching model," European Economic Review, Elsevier, vol. 55(5), pages 644-658.


Francesco Zanetti is an Associate Professor in the Department of Economics at the University of Oxford and the David Richards Fellow of Wadham College. He holds a PhD in Economics from Boston College, and a PhD in Economic Theory and Institutions from the University of Bologna. Before joining Oxford in September 2012, he several years in the Bank of England, first as an Economist, Senior Economist and Advisor in the Monetary Analysis Section.

His research interests are in the fields of Macroeconomics, Monetary Economics and Applied Econometrics. Among other topics, he has worked on labor market dynamics and the effect of structural reforms, the propagation of news shocks, the state dependence of fiscal multipliers, and the impact of unconventional policies. In 2023 he received Journal of Monetary Economics Award for the best paper published in the journal during the past two years. He serves as an associate editor for the Economic Journal, Journal of Money, Credit and Banking, Oxford Bulletin of Economics and Statistics, Oxford Economic Papers, and as a co-editor for Macroeconomic Dynamics. His research has appeared in leading academic journals and policy forums.