Thanks, Miriam! :)

Thanks, Davide!

Thank you, Christina! :)

Thank you, John :)

Thanks a lot, Pierre! :)

Thank you, Lennard!

I'm also deeply grateful to everyone who supported me during the job market and to the many inspiring researchers I had the chance to meet along the way. Looking forward to the next chapter!

Huge thanks to @apeichl.bsky.social , Mirko Wiederholt, Martin Schneider, and @bborn.bsky.social for their incredible support over the past months.

I'm happy to share that I've successfully submitted my dissertation this week! I'm also thrilled to announce that I'll join the University of Copenhagen as an Assistant Professor this summer.

@econmunich.bsky.social

Thanks a lot to my advisor, co-authors, and everyone at ifo & LMU for their support along the journey! @apeichl.bsky.social @bborn.bsky.social Mirko Wiederholt, Martin Schneider @bachmannrudi.bsky.social @peterzorn.de @almutballeer.bsky.social @pschuele.bsky.social

Check out the details in my JMP: www.dropbox.com/scl/fi/7cwz8...
And explore my other research on my website: sites.google.com/view/manuelm...
#EconSky #EconJMP #JMP

What’s the role of policy?

➡️In a quantitative model, I show that fiscal policy is particularly effective in stimulating investment.
➡️Automatic stabilizers such as generous loss carrybacks mitigate decline in capital stock by around 25% when macro tail risk increases.

To explain these findings, I propose a new mechanism:

➡️A model of firm dynamics with heterogenous & uncertain exposure to macro tail events.
➡️When exposure is ambiguous, even risk-neutral firms cut back investment beyond first and second moments.

External validation:
Using newspaper articles (1986–2023) + GPT, I create a time series of macro tail risk beliefs.

➡️Macro tail risk beliefs didn’t return to pre-2008 levels after the Great Recession.
➡️Macro tail risk beliefs🔼 foreshadow weaker investment dynamics.

I corroborate the results in a survey experiment:

➡️Firms invest more in scenarios with lower tail risk, even if the mean and variance of macro outcomes are the same.
➡️Again, results are driven by high worst-case exposure firms.

Subjective probability of a macro tail event 🔼 → investment 🔽

50% of the relationship persists even when controlling for subjective expectations and uncertainty (first & second moments of firms’ forecast distribution).

Results are driven by firms with high worst-case exposure.

I also asked firms about their exposure to macro tail events:

➡️Managers are highly uncertain about their exposure.
➡️Past exposure predicts future beliefs about vulnerability.

I created novel data using the ifo survey:
Firms report subjective probabilities of 4 specific macro tail events.

➡️Firms view these events as fairly likely, but beliefs vary widely.
➡️Higher tail risk beliefs → lower expectations & higher uncertainty about their own business.

Global economies have recently faced severe tail events such as the Great Recession, COVID, and the war in Ukraine.

➡️How do firms assess the probability and exposure to future macro tail events?
➡️How do these beliefs influence investment decisions?

📢 I am on the academic job market

🌐 sites.google.com/view/manuelm...

In my JMP, I study firms’ beliefs about macroeconomic tail risk and their role in investment decisions.

JMP thread below👇