On May 28^th, Matt Schurin defended his dissertation entitled, “Three Essays on Fiscal Policy and Macroeconomic Fluctuations.”  His major advisor is Christian Zimmermann and his associate advisors are Dong Jin Lee and Richard Suen.

Matt’s dissertation analyzes the macroeconomic effects of fiscal policy and examines what optimal policy should be in response to macroeconomic fluctuations.  The first dissertation chapter explores what the government’s fiscal policy should be when banks hold significant amounts of public debt and the government can default on its debt obligations.  The second dissertation chapter analyzes the effects of fiscal austerity using a two-sector small open economy model that is calibrated to the Canadian economy.  Results from this model coincide with key characteristics of the Canadian economy.  The third chapter examines the impact of government debt on macroeconomic volatility in an environment where, going forward, the government is required to balance its budget.  The model in this chapter can help explain why developing countries have more volatile output and more countercyclical net exports than developed countries.

Matt is heading to McLean, VA where he will work for PricewaterhouseCoopers in their transfer pricing group.

Congratulations, Matt, on all your hard work!

On August 10, 2012, Sanglim Lee defended his dissertation entitled “Expected Currency Excess Returns and Debt in the Business Cycle,” under the supervision of Professor Christian Zimmermann.

In the first chapter of his dissertation, Sanglim shows that the risk premium is an important factor in explaining deviations from Uncovered Interest Parity (UIP) in 20 developed and 18 developing countries. In the second chapter, he further examines the UIP condition with a two-country International Real Business Cycle model and shows that the business cycle risk driven by total factor productivity can account for deviations from UIP. The third chapter examines the effects of fiscal austerity on the Canadian economy using a two-sector small open economy model. The model’s simulation results indicate that the effect of fiscal austerity on the economy depends crucially on the relationship between public-debt levels and country-risk premiums.

Starting on October 8th, Sanglim works as a research fellow at the Korea Energy Economics Institute in South Korea.