Our current research projects and policy work
Dr Konstantinos Angelopoulos is the Principal Investigator on a new £297,000 grant which is funded by ESRC as part of UK Research and Innovation’s rapid response to COVID-19. This project will model changes in inequalities in income, wealth and health in the years following COVID-19, and use the models developed to assess possible mitigation policies. Understanding such medium-run changes is important because the health and economic effects of the COVID-19 pandemic, and how these vary across the population, are expected to last for many years. Local project partners include Glasgow City Archives and Glasgow Life.
In a separate project, Dr Konstantinos Angelopoulos has been working with Turkana pastoralist communities to understand inequality by studying the effects of shocks and mitigating activities such as herding, education, family structure, and policy interventions. This work has been supported by the Scottish Funding Council, as part of the Global Challenges Research Fund. It includes colleagues from the MRC/CSO Social and Public Health Sciences Unit, the School of Education, Lancaster and Erasmus Universities, and the NGO Friends of Lake Turkana, Kenya. The researchers recently published a briefing note and a booklet for local schools (see ‘Related links’).
Professor Tatiana Kirsanova and PhD students are currently studying inequality as a driver of optimal monetary and fiscal policy.
In partial collaboration with current and former PhD students, Professor Richard Dennis is conducting research in the field of behavioural macroeconomics looking at behaviours such as quasi-hyperbolic discounting, diagnostic expectations, and experienced-based-expectations. These behaviours can alter importantly how decision-makers react to new information, leading to greater economic volatility and increased persistence. This can prolong the effects of shocks such as Brexit and COVID-19.
Macroeconomic policy after COVID-19
Macroprudential policies were rapidly deployed when the COVID-19 pandemic hit, with capital, liquidity and other regulations weakened or temporarily abandoned across many countries. In particular, capital regulations applying to banks were adjusted to help underpin credit to the real economy. However, little is known about the optimal formulations of such rapid-response policies. It is imperative ahead of any future pandemic or financial turmoil that the relative effectiveness of monetary, fiscal and macroprudential policies are evaluated. These questions are of particular interest to Professor Charles Nolan and his co-authors, including current and former PhD students.
The COVID-19 pandemic has led to mounting government debt levels. Persistently low inflation has reduced the space for monetary policy to operate. Professor Tatiana Kirsanova, Professor Campbell Leith and Dr Ioana Moldovan are exploring optimal policymaking in this environment, considering that policymakers may find it difficult to commit to previously chosen actions. The policymaking process may be further complicated by political frictions generated by the electoral cycle and associated political conflict.
Our policy work
Professor Campbell Leith and Professor Charles Nolan are experts on Scottish fiscal policy and previously served as members of the Scottish Fiscal Commission (SFC). As commissioners, they were responsible for scrutinising the fiscal forecasts of the Scottish Government and for preparing the SFC for the transition to a statutory body when it took over the forecasting from the Scottish Government.
Professor Ronald MacDonald was awarded an OBE in 2015 for services to Economic Policy. He has served as an advisor and consultant to a number of governments, central banks and public bodies. His current research topics include: the macroeconomic implications of the COVID-19 pandemic; the hydrogen economy and its implications for productivity and growth; and the macroeconomic implications of Scottish independence.
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