Advanced Studies Program

Topics in Macroeconomics with Frictional Financial Markets – Luigi Bocola

24 - 25 Apr 2023


Luigi Bocola (Stanford)

This mini course covers current research at the intersection of macroeconomics and finance, specifically papers that focus on the macroeconomic implications of financial frictions that affect firms. The course is divided in four blocks, of 2.5 hours 

Block 1, Foundations: We will cover benchmark macroeconomic models with frictional financial markets.

Block 2, Financial Amplification: We will discuss two major critiques to models with financial frictions and how the literature has addressed them.

Block 3, Evidence on the macroeconomic costs of financial crises: We will discuss firm-level evidence on the economic costs of financial markets’ disruptions, and how to interpret these results.

Block 4, Production networks and Financial Markets: We will cover recent research that studies how financial frictions impact the economy via the complex input-output relationships between firms.


  • Advanced Studies Program