Professor Mark Weder and Dr Jacob Wong – Understanding the Effects of News Shocks on Macroeconomic Fluctuations. $186K over 3 years. The aim of this project is to construct and analyze models of economic fluctuations in which arrival of news concerning future innovations in economic fundamentals can have substantial effects on current economic activity. The project will focus on understaning how news about expected technological innovations will affect labour productivity, by reallocation of workers across sectors of the economy in response to news about productivity shifts across sectors of the economy It will quantitatively account for the inconsistent relationship between average labour productivity and unemployment rates across different recessionary episodes.
School of Economics