Instructors

Luigi Bocola (Stanford University)

Dates

25-29 August 2025

Hours

9:30 to 13:00 CEST

Format

In person

Practical Classes

No

Intended for

Academic researchers and researchers in policy institutions interested in the intersection of Macroeconomics and Finance.

Prerequisites

Participants are assumed to have knowledge of macroeconomics at the master/PhD level. That includes basic knowledge of numerical methods for the solution of dynamic stochastic general equilibrium models.

Overview

The past fifteen years have seen a growing body of theoretical, quantitative, and empirical research focused on understanding the macroeconomic implications of shocks to the financial sector and on studying what policymakers can do to reduce the risk of financial crises. The aim of this course is to cover state-of-the-art research at the intersection of macroeconomics and finance and, specifically, contributions that focus on the propagation of financial shocks to the rest of the economy. We will start by introducing a canonical macroeconomic model where financial intermediaries face leverage constraints, discuss its implications for the propagation of shocks, and study different algorithms for its numerical solution. We will discuss how to use this framework for the analysis of financial crises and for the design of financial regulations. The course will conclude with a set of advanced topics at the intersection of macroeconomics and finance.

Topics

• A macroeconomic model with financial intermediation
• Local and global numerical solutions methods
• Shock propagation
• Welfare properties and optimal financial regulation
• Advanced topics: i) From micro estimates to macro effects; ii) The financing of supply chains and non-bank intermediaries; iii) Financial crises in open economies

Luigi Bocola is an associate professor in the Stanford Economics Department, a faculty research fellow at the National Bureau of Economic Research, and a senior fellow at the Stanford Institute for Economic Policy Research. Bocola’s research addresses issues in open- and closed-economy macroeconomics. Among other topics, his research has focused on the macroeconomic consequences of sovereign debt crises, financial dollarization in emerging markets, and macroeconomic effects of shocks to the financial sector. His research has been published in leading academic journals and has been awarded a CAREER grant by the National Science Foundation and an Alfred P. Sloan Research Fellowship. He obtained a PhD from the University of Pennsylvania in 2014.