Volume 23, Issue 2 (November 2022)

The EconomicDynamics Newsletter is a free supplement to the Review of Economic Dynamics (RED). It is published twice a year in April and November.

• SED: Call for Papers 2023 Meeting

• SED: Letter from the President

• EconomicDynamics Research Agenda: Oleg Itskhoki on Exchange Rate Puzzles and Policies

• RED: Letter from the Coordinating Editor

• Book Review: Fiscal Policy under Low Interest Rates by Olivier Blanchard

Marina Azzimonti and Loukas Karabarbounis, Editors.

Society for Economic Dynamics: Call for Papers, 2023 Meeting

The next annual meeting of the Society for Economic Dynamics will be held fully in person from June 29 to July 1, 2023, in Cartagena, Colombia. We are excited to announce the plenaries by Mark Aguiar, Matthias Doepke, and Valerie Ramey. You can now submit your paper for the conference using ConferenceMaker. The deadline for submissions is February 15th, 2023. We are looking forward to receiving many exciting submissions for the academic program!

Paulina Restrepo-Echavarria and Anmol Bhandari

SED 2023 Program Co-chairs

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Letter from the President

Dear Colleagues,

 I am writing this letter after learning that our good friend and colleague Ed Prescott has passed away. For those of you who come regularly to SED conferences, you will know that he was a former president of the Society and came every year.  In Ed’s view, it was a Society for the young but he also felt honored when one of his papers was picked to be on the program. We will miss him, but we certainly will not forget him.  I hope to honor him and his legacy at the meeting next summer and will hopefully persuade the editors at RED to do a special issue in his honor.

 In happier news, we had an incredibly successful conference in Madison this past summer—well beyond expectations of many who a priori discounted how fun it can be in the American heartland.  For those of you that were there, thank you for posting all of the pictures, which clearly conveyed the extent of joy to be back together without CDC restrictions. This was a smaller meeting than the usual pre-Covid level of 504.  In Madison, we had only 360 in large part because the planning was more rushed than previous meetings.  I can say from personal experience that the logistics of hosting large meetings is very involved.  But the Madison team headed by Kim Ruhl pulled it off in style. Perfect weather was also a much welcomed bonus.

 Program chairs Yan Bai and Yongs Shin were also a key factor for the success of the meeting. An important task for them was organizing the three plenary sessions. This year’s choices of Gita Gopinath, Giuseppe Moscarini, and Esteban Rossi-Hansberg turned out to be very popular. We have also moved the plenary sessions to midday which ensures attendance is good and audience members are wide awake. One downside to the program planning this year was the smaller number of slots meant that Yan, Yongs, and the program committee faced the daunting task of rejecting really good papers and limiting the number of topics that we could accommodate.  My hope is that next year we will be back to normal size.

 Next year’s summer conference will be hosted by Universidad de los Andes, June 29 to July 1. The local chair is David Perez-Reyna, who has been tirelessly working on this since the pandemic delayed all of our events. Program chairs Anmol Bhandari and Paulina Restrepo-Echavarria have been busy with the next call for papers and lining up plenary speakers. For those following us on social media, you already may know that next year’s speakers are Mark Aguiar (Princeton), Matthias Doepke (LSE), and Valerie Ramey (UC San Diego). We are still on track to make up two other postponed conferences. The current plan is to meet in Barcelona in 2024 and Taipei in 2025. I encourage everyone to keep an eye on our website for updates.

 As always, I want to thank the SED officers: Marina Azzimonti (Secretary), Todd Schoellman (Treasurer), and JuanPa Nicolini (President elect), who are all an enormous help to me and to the Society.

 I encourage everyone to check out the SED website and twitter account for updates on the ASSA meeting and next summer’s conference site.

Ellen McGrattan

President, Society for Economic Dynamics

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Letter from the Coordinating Editor

Dear readers and authors:

I am writing with some updates on the editorial organization and processes at the Review of Economic Dynamics.

Editorial members 

The current editorial board is:

Editors: M. Bassetto, M. De Nardi, M. Doepke, G. Gancia, M. Iacoviello, L. Karabarbounis (Coordinating), D. Lagakos, G. Menzio, E. Schaal, T. Schoellman.

Associate Editors:  S. Albanesi, M. Azzimonti, Y. Bai, D. Berger, A. Bhandari, A. Burstein, H. Chade, M. Eden, J. Eeckhout, D. Fitzgerald, L. Guerrieri, R. Lentz, I. Lindenlaub, J. Lise, E. Liu, M. Mazzocco,  L. Paciello, F. Postel-Vinay, P. Restrepo-Echavarria, L. Rudanko, K. Ruhl, A. Shourideh, V. Sterk, J. Thomas, M. Trabandt, V. Venkateswaren, G. Vereshchagina, J. Wieland, T Winberry, and C. Zimmermann.

We wish to express our gratitude to Andrea Tambalotti and Pierre-Olivier Weill who stepped down as Editors. Their outstanding contributions and their leadership will be missed.

We are excited to announce two additions to our list of Editors, Guido Menzio and Todd Schoellman, who just started their editorship. We look forward to their contributions to the journal.

We are also excited to announce several new Associate Editors who joined our journal: Luca Guerrieri, Rasmus Lentz, IlseLindenlaub, Ernest Liu, and Thomas Winberry. At the same time, we wish to thank departing Associate Editors, Andrea Eisfeldt, Jennifer La’O, and Chris Tonetti, for their contributions to the journal.

Conflicts of interest  

The RED has established policies ensuring that no conflicts of interest arise when evaluating papers.

• Referees cannot submit reports for papers written by colleagues, recent coauthors, advisors, advisees, family members, or by authors who have close personal relationships with the referee. Referees are expected to disclose if a conflict arises inadvertently.

• Editors cannot handle papers written by colleagues, recent coauthors, advisors, advisees, family members, or by authors who have close personal relationships with the Editor. Editors are expected to disclose if a conflict arises inadvertently.

• Members of the editorial board who submit papers receive evaluations from two Editors. Submissions from members of the editorial board cannot receive a positive outcome unless both Editors independently agree to the positive outcome. Members of the editorial board who submit papers do not learn the identity of one of the handling Editors.

Editorial turnaround statistics  

The RED offers high quality and fast reviews to authors. The table below summarizes our statistics for decisions on first submissions between 06/25/2020 and 10/31/2022:

Our goal is to make the RED one of the most efficient journals in economics, by targeting a roughly two-month average turnaround for papers that pass the desk and by desk rejecting as soon as an initial evaluation is feasible. I would like to sincerely thank our wonderful referees who continue to offer constructive reports to authors in a timely manner.

Special issue in honor of Thomas Cooley   

I am excited to announce that we are preparing a special issue in honor of Thomas Cooley, who unfortunately passed away last October. Nezih Guner, Jeremy Greenwood, and Lee Ohanian have agreed to serve as guest editors for the special issue and have put together a very strong program. The papers will be presented in a conference at Santa Barbara in May 2023. We wish to thank Finn Kydland and Peter Rupert at UCSB’s LAEF for hosting the conference.

Best,

Loukas Karabarbounis

Coordinating Editor, Review of Economic Dynamics

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Fiscal Policy under Low Interest Rates

Olivier Blanchard (Author)

Policy makers in advanced economies find themselves in an unusual fiscal environment: debt ratios are historically high, and—once the fight against inflation is won—real interest rates will likely be very low again.  This combination calls for a rethinking of the role of fiscal and monetary policy—and this is just what Olivier Blanchard proposes in Fiscal Policy under Low Interest Rates.

“This book is Olivier Blanchard at his best. Sound policy must rest on sound analysis, and Blanchard takes the analysis of fiscal policy and its sustainability to new heights. Everyone who wants to worry about deficits or about austerity needs to consider his balanced and judicious evaluation of the issues.”—Lawrence H. Summers, Charles W. Eliot University Professor and President Emeritus, Harvard University

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