John Kramer successfully defends his thesis
On Wednesday 15 June, John successfully defended his thesis "Essays on Macroeconomics, Monetary Policy and Mobility".
What is your thesis about? What are the most important findings, or were there any results that surprised you?
- My thesis consists of four self-contained chapters. Each of them focuses on a separate economic question, but they are still closely related. Chapters 1 and 3 investigate how earnings behave differently along the income distribution, Chapters 2 and 3 both deal with questions related to monetary policy, but all four chapters are broadly related to inequality in the macroeconomy. Throughout the thesis, I conduct empirical research and present theoretical models which can provide quantitative answers to important macroeconomic questions.
In the first chapter of my dissertation, I study how booms and recessions affect people’s labor earnings. Fluctuations in earnings are arguably one of the biggest worries people face during their working lives, as they make up the lion’s share of most people’s incomes, and they are the only source of income for some. Therefore, understanding these fluctuations better can help guide politicians when they design stabilization
policies (such as social safety nets), which in turn can make economies more resilient overall.
The second chapter analyzes, in the context of the euro area, how differences in portfolio choices across countries affect the potency of monetary policy. I, together with my coauthors, find that countries with a higher share of liquidity constraint households, those who don't have a lot of money left over to save each month, are more affected by the same shock.
The third chapter tries to understand how monetary policy affects earnings differently for the rich and the poor. Together with my coauthors, I document that after an expansionary monetary policy surprise, earnings growth rises much more at the low end of the income distribution, compared to the top. We show that this has important implications for the potency of monetary policy in general, as well as its distribution consequences.
The last chapter is about intergenerational mobility. A lot of children follow their parents' career paths and find jobs in their parents' occupations. Take, for example, the current Formula 1 world champion Max Verstappen. He followed his father, Jos Verstappen, into the same occupation: Formula 1 driver. But the pattern is true for more prosaic occupations such as doctors and truck drivers. A natural question that arises is: will talent be allocated efficiently in an economy in which children pick their parents' occupations? We build a model to answer that question and find, somewhat surprisingly, that children following their parents seems to represent them sorting into good occupational matches. Hence, removing parental influences does not really affect aggregate productivity or intergenerational mobility.
What are your plans for the near future? Any particular research agenda you will embark on?
- I will be starting a job as an Assistant Professor at Copenhagen University. There, I hope to continue to study inequality and the impact of government policies, with a special focus on earnings and wealth inequality.
Finally, how do you feel now that you have successfully defended your thesis?
- I'm happy that I had such a great opponent in Moritz Kuhn. He had many good questions and we had a constructive discussion about my papers. Now that I've earned my degree, I'm ready for the next adventure in Denmark. I am glad that the Zoom setup was in place, such that many of my friends and colleagues from all around the world could tune in to my defense.
Moritz Kuhn (University of Bonn) took time out of his busy schedule to provide excellent commentary as opponent, something we at the IIES appreciate immensely!
Last updated: June 23, 2022