Business Cycle Developments, Financial Fragility, Housing and Commodity Prices
November 21-23, 2008
The conference featured presentations on four main themes: oil market and the effect on the economy; the impact of housing prices and asset markets developments on consumers and the macroeconomy; reforms of financial institutions and the structure of business cycles, the effect of news on the macroecocomy. Kilian (University of Michigan) showed that the effect of supply and demand driven shocks in the oil market have very different effects on output and inflation, and Nakov (Banco de España) that oil is an important component of the marginal cost of firms and it has effects on inflation. Detken (ECB) has shown that it is possible to construct an index ancipating the explosion of financial and credit crises, while Marocisnki (ECB) and Muellbauer (Oxford) analyze the effects of housing price changes on macroeconomic variables and consumers' decisions. Iacoviello (Boston College) propose a model to study the transmission of housing price increases to economic activity and Rebucci (IMF) presented some international evidence on the transmission of housing market shocks. Pierrad (Bank of Luxemburg), Korinek (Univesity of Maryland), Rancière (IMF), Andrés (University of Valencia), Den Haan (University Amsterdam) and Monacelli (Bocconi) all propose models which try to explain aspects of the current financial crisis, some focusing on banks, other focusing on mortgage markets, other on consumer credit. The credit linkage was also the focus of the study of Melander (Stockholm School of Economics) as a way to assess the cost of the current crisis. Finally, Schmitt-Grohe (Columbia University) and Comin (Harvard University) examined models where future news can have impact on the current economy. A part from the speakers, the discussants, and invited attendees, members of the economics departments attended the conference. The meeting has also attracted people from Barcelona area, from Universities in Spain and from the Banco de España.