Posts by Collection

Contingent convertible bonds and macroeconomic stability in a stock-flow consistent model

Metroeconomica

This paper develops a kaleckian economy in a stock-flow consistent model to assess the effect of contingent convertible bonds in terms of stability through numerical simulations.

Recommended citation: Kremer, Elise and Tinel, Bruno. (2022). "Contingent convertible bonds and macroeconomic stability in a stock-flow consistent model." Metroeconomica. 73( 4), 1112– 1154. https://doi.org/10.1111/meca.12392

Contingent convertible bonds and financial instability in an agent-based model

Work in progress

This paper evaluates the impact of contingent convertible bond activations in an modified version of the JMAB agent-based macroeconomic model (Caiani et al., 2016), by extending it with new financial assets, investor learning behaviors, and a variable opinion component. These additions reveal non-linear effects of activations on macroeconomic aggregates, and show potential for financial contagion.

Energy price shocks in the European Union: macroeconomic impacts, distributional effects and policy responses

Work in progress. Submitted to Energy Economics

This paper relies on an agent-based integrated assessement model to simulate a temporary shock on fossil fuel prices in the European Union. It assesses its impact on functional income distribution, inflation persistence, and macroeconomic aggregates, considering: 1. firms’ capability to sustain profit margins, 2. households’ wage claims, and 3. diverse mitigation transfers and price control policies established by the government.

Macro-financial transition risks during deep mitigation pathways: evidence from a hybrid agent-based integrated assessment model

Work in progress. Submitted to Nature Climate Change

This paper integrates a process-based integrated assessment model into a macroeconomic agent-based model to shed light on the macroeconomic and financial response to deep mitigation trajectories controlled by carbon pricing. Our results reveal that rapid transitions induced by high-growing carbon prices significantly impact unemployment, inflation, and income distribution. Stabilization policies can mitigate economic fluctuations, though not completely in 1.5°C scenarios. Our paper emphasizes the need for coordinating climate and macroeconomic policy during ambitious decarbonization.