Peter Lihn Jørgensen defends his PhD thesis at the Department of Economics

Candidate
Peter Lihn Jørgensen

Titel
“Essays in Macroeconomics: Expectations, House Prices, and Inflation“. Copies of thesis will be available at the Information Desk at the Department of Economics, room 26.0.20.

Time and venue
Friday 18 May 2018 at 16:30. University of Copenhagen, Centre for Health and Society, Øster Farimagsgade 5, building 26, The big seminar room (“Det Store Seminarrum”), 2nd floor. Kindly note that the defence will begin precisely at the announced time.

Assessment committee
Professor Emiliano Santoro, Department of Economics, University of Copenhagen (chair)
Professor Albert Marcet, Institute for Economic Analysis, University of Minnesota, USA
Gisle Natvik, Associate Professor, BI Norwegian Business School, Norway

Abstract
The thesis consists of three self-contained chapters on topics related to New Keynesian (NK) macroeconomic models. The first two chapters focus on the implications of boundedly rational expectations in NK models. Specifically, Chapter 1 investigates whether so-called “trend-chasing” expectations can help account for the run-up in US house prices during the boom period from 2000 to 2006. Similarly, Chapter 2, which is co-authored by Kevin J. Lansing (Federal Reserve Bank of San Francisco), analyzes whether so-called “anchored” inflation expectations can help explain US inflation dynamics since the outbreak of the Great Recession, which standard rational expectations models have difficulties accounting for. Inflation dynamics is also the focus of the third and final chapter. Specifically, Chapter 3, which is co-authored by Søren Hove Ravn (University of Copenhagen), provides empirical evidence that inflation declines persistently and significantly in response to expansionary fiscal policy shocks. Moreover, this decline is accompanied by an increase in total factor productivity and consumption. We show that the introduction of so-called “variable technology utilization” can enable an otherwise standard NK model to reproduce these empirical findings.