PhD thesis defence by Vida Maver
This thesis uses applied econometric methods to study how macroeconomic shocks propagate through the economy, with a particular focus on monetary policy. By constructing a new firm-level dataset from Slovenia and leveraging data from the Euro area and advanced and emerging market economies, this dissertation addresses policy-relevant questions. It consists of three independent yet related essays.
The first chapter investigates the macroeconomic implications of the changing slope of the Phillips curve and its role in shaping optimal monetary policy. Using Euro area data and a factor-augmented VAR model, combined with policy evaluation techniques, I show that the curve steepened in the post-pandemic period and assess alternative policy-tightening timings. To explore trade-offs in the state-contingent transmission mechanism, I distinguish between periods of inflation surges and periods of stable inflation. The findings resonate with a New Keynesian framework in which the Phillips curve slope varies with asymmetric quadratic price adjustment costs. In light of empirical evidence and drawing on theory, a flatter Phillips curve warrants cautious tightening measures, while a steeper curve and a lower sacrifice ratio justify a stronger initial response, enabling earlier moderation of tightening.
The second chapter constructs a monthly firm-level dataset from Slovenia to examine how monetary policy transmission differs across the manufacturing and services sectors and to evaluate whether disaggregated marginal-cost-based Phillips curves enhance our understanding of inflation dynamics. Using panel local projections, the findings indicate sluggish responses of labour-related costs and stronger reactions of non-labour-related costs to contractionary monetary policy shocks. The paper provides evidence of variable transmission lags and highlights the importance of microlevel data for policy design. It shows that the short- to medium-term aggregate inflation response is predominantly shaped by the manufacturing sector, whereas long-term inflation persistence is largely driven by the services sector.
The third and final chapter (joint with Patricia Gomez-Gonzalez, Maximiliano Jerez-Osses, Jorge Miranda-Pinto, and Jean-Marc Natal) explores how domestic interconnectedness of the commodity sector affects the transmission of commodity price shocks in OECD countries. Rather than focusing only on sectoral size, we emphasize production linkages, measured by the network-adjusted value-added share. We find that greater interconnectedness amplifies the positive effects of terms-of-trade gains on consumption while mitigating the negative effects of declines. To interpret these results, we develop a small open economy model with production networks, revealing that commodity interconnectedness strengthens wealth channels but dampens real wage channels. Our findings underscore the need to consider domestic production network structures when addressing policy-relevant questions.
The event will take place in hybrid modality.
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