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Biography

Silvana Tenreyro is Professor in Economics at the London School of Economics. She received her Ph.D. in Economics from Harvard University in 2002 and an MSc in Economics from Harvard University in 1999. She is Director and Board Member of the Review of Economic Studies and serves as Associate Editor for the Journal of the European Economic Association, the Journal of Monetary Economics and the Economic Journal. Tenreyro has served as external MPC member for the Central Bank of Mauritius since 2012, and is Member at Large of the European Economic Association (EEA), Leading academic at the CFM, Research Associate at the CEP Macroeconomics program, and Research Affiliate at CEPR. In the past, she acted as Panel Member for Economic Policy, Director of the IGC Macroeconomics Programme, and she chaired the Women in Economics committee of the EEA. Before joining the LSE, she worked for two years at the Federal Reserve Bank of Boston. Her main research interests are in the areas of Macroeconomic Development Monetary Policy and International ECONOMICS. Recent publications include "Hot and Cold Seasons in the Housing Market" published in American Economic Review (AER)2014 “Technological Diversification” AER 2013, “The Timing of Monetary Policy Shocks” AER 2007, and “Volatility and Development” QJE 2007.

's current areas of research are:

  • The Transmission of Monetary Policy Operations through Redistributions and Durable Purchases This study analyzes the distributional effects of monetary policy and their aggregate impact on the economy. An immediate effect of any monetary policy intervention is a revaluation of financial assets in the economy. The biggest winner from a monetary expansion in most developed economies is the Treasury--a large net debtor in these economies. The paper points out that an important issue is hence understanding how fiscal policy reacts to the windfalls generated from monetary expansions, a consideration that standard New Keynesian models with a representative agent abstract from. There is also an important redistribution among households (debtors and creditors)---on net, households are net creditors to the government--and towards future generations. The work studies these effects and proposes a new framework to analyze monetary policy interventions that takes into account these so far glossed-over effects. The framework is able to mimic the standard aggregate effects of monetary policy on real activity as well as explicitly identifying winners and losers from different interventions. Results are summarized in "The Transmission of Monetary Policy Operations through Redistributions and Durable Purchases" http://personal.lse.ac.uk/tenreyro/NNKM.pdf
  • Pushing on a string: US monetary policy is less powerful in recessions. The paper estimates the impulse response of key US macro series to the monetary policy shocks identified by Romer and Romer (2004), allowing the response to depend flexibly on the state of the business cycle. The paper finds strong evidence that the effects of monetary policy on real and nominal variables are more powerful in expansions than in recessions. The magnitude of the difference is particularly large in durables expenditure and business investment. The effect is not attributable to differences in the response of fiscal variables or the external finance premium. The paper finds some evidence that contractionary policy shocks have more powerful effects than expansionary shocks. But contractionary shocks have not been more common in booms, so this asymmetry cannot explain our main finding. http://personal.lse.ac.uk/tenreyro/TandT.pdf
  • Diversification through Trade Existing wisdom links increased openness to trade to greater macroeconomic volatility, as trade induces a country to specialize, increasing its exposure to sector-specific shocks. Evidence suggests, however, that country-wide shocks are at least as important as sectoral shocks in shaping volatility patterns. The paper argues that if country-wide shocks are dominant, the impact of trade on volatility can be negative, because trade becomes a source of diversification. For example, trade allows domestic goods producers to respond to shocks to the domestic supply chain by shifting sourcing abroad. Similarly, when a country has multiple trading partners, a domestic recession or a recession in any one of the trading partners translates into a smaller demand shock for its producers than when trade is more limited. Using a calibrated version of the Eaton-Kortum and Alvarez-Lucas model, the paper quantitatively assesses the impact of lower trade barriers on volatility since the 1970s in a broad group of countries.

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