Ph.d.-forsvar: Peter Lihn Jørgensen:"Essays in Macroeconomics: Expectations, House Prices, and Inflation"
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.