Leading financial and economic voices gathered to discuss important policy issues at an annual workshop.

The third Non-Linearities in Macroeconomics Workshop took place at Lancaster University Management School (LUMS), following successful editions at Queen Mary University of London (QMUL) and the Bank of England (BoE).

This year’s event was organised by LUMS and covered areas such as inflation expectations and uncertainty, macro-financial risk dynamics, big data applications, heterogeneity, and non-linear methods.

The workshop is the result of collaboration between Lancaster, QMUL, and the BoE, and brings together experts from academia and central banks to discuss recent research in macroeconomics on non-linear dynamics and times of heightened uncertainty.

Among the participants were representatives from the University of Strathclyde, the University of York, and the University of Rome La Sapienza, as well as economists from the BoE, the European Central Bank, Banque de France, and the Bank for International Settlements. The workshop also attracted economists from LUMS, who joined as presenters, and contributors from the financial sector.

The programme included a keynote lecture delivered by Professor Sarah Zubairy (Chair for Global Macroeconomics at Texas A&M University, below) and concluded with a fireside policy chat with the BoE’s Chief Economist, Huw Pill (pictured at bottom of the page).

Professor Zubairy presented recent work on the effects of unexpected fiscal policy shocks, highlighting that debt expansion shocks raise yields, tighten financial conditions, and crowd out investment, while maturity extension shocks steepen the yield curve but ease risks and stimulate economic activity. Their effects are non-linear and crucially depend on the prevailing fiscal and monetary context.

Huw, who is alsoa member of the BoE’s Monetary Policy Committee, discussed the challenges and opportunities for current monetary policy. He focused on the use of scenario analysis and the role of research methods in periods of heightened uncertainty and structural change.

The organisers of the event were Nicolò Bandera (Bank of England), Dr Stefano Fasani (LUMS), Iryna Kaminska (BoE), Professor Haroon Mumtaz (QMUL), and Professor Lorenza Rossi(LUMS, FREcon).

The workshop was supported financially by Lancaster University Economics Department, the Centre for Financial Econometrics, Asset Markets and Macroeconomic Policy, and the Bank of England.