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‘Financial Frictions and Macroprudential Policies’ course with Nobuhiro Kiyotaki

Influential professor Nobuhiro Kiyotaki visited the Florence School of Banking and Finance on 19-21 March 2018 for a training course on the topic of ‘Financial Frictions and Macroprudential Policies’.

The aim of this course was to provide participants with the theoretical framework necessary for modelling financial frictions and, generally, the aggregate economic activity. Such models allow researchers to collect data useful for understanding financial crises and business cycles, and can be used to prepare the grounds for the evaluation and definition of public policies.

The instructor started the course with a historical overview of the financial accelerator models, which emphasize the interaction between borrowing constraint, asset price and aggregate production, introducing then sequentially changes in the models to analyse liquidity and business cycles, macro-prudential policies and financial crises, issues related toemerging markets and sovereign debts, and finally concepts related to employment and secular stagnation, analyzing the role of government and financial intermediaries.

Professor Nobuhiro Kiyotaki is professor of Economics at Princeton University and is widely known for his publications in macroeconomics and monetary economics, including “Monopolistic Competition and the Effects of Aggregate Demand,” with Olivier Blanchard in 1987, “On Money as a Medium of Exchange,” with Randall Wright in 1989, and “Credit Cycles,” with John Moore in 1997.

Among the participants in the course Michele Costola, Assistant Professor at SAFE, House of Finance – Goethe University Frankfurt, appreciated particularly Professor Kiyotaki’s teachings:

Professor Kiyotaki is an outstanding researcher. During the course, he explained the topics in a very precise and compentent manner.

Another participant recognised Professor Kiyotaki’s influential role in academia:

The works of Professor Kiyotaki is the best example of the big transformations that monetary and macroeconomic theory are experiencing in response to the global crisis of 2007-2009.

The course, held at advanced level, attraced several participants active in economic research in central banks, financial authorities as well as the world of academia.