by Dr Bo Yang and Dr Lucy Minford – lecturers in Economics

With interest rates so low for so long, what monetary and fiscal policy aids economic recovery? Will higher public debt have important economic consequences in developed and developing countries? And how do macroeconomic shocks like a geopolitical event, new technologies or a pandemic, affect inequality between different groups or regions?

Research in macroeconomics – the study of economies at the regional, national or international level – is more relevant than ever. In macroeconomics we study how economies fluctuate in response to both predictable and unforeseen events, as well as how they evolve over longer timeframes: decades or even centuries. The world economy has been through turbulent times recently, with stress from a credit-constrained banking sector spilling over into the real economy, large trade imbalances, volatile oil prices and a global pandemic.

The global financial crisis of 2008-09 overturned the prevailing consensus in macroeconomics on the role of monetary and fiscal policy in economic growth and stability. More recently, the worldwide public service emergency and ensuing shutdowns of economic activity caused by the COVID-19 pandemic have put government spending at the centre of the debate. Policymakers must now devise careful measures to bring about the hoped-for ‘V-shaped’ recovery in the short term and, when the pandemic is over, promote the longer term health of the UK economy. Productivity drives sustainable economic growth and underpins the government’s ability to borrow and provide public services, so the ‘productivity puzzle’ (the stagnation of UK productivity since 2008) is likely to remain a concern.

Developing economies have extra vulnerabilities when facing fallout from global shocks like COVID-19, including weak institutions, large informal sectors, and fragile financial sectors with limited access to capital. After rapid financial innovation and market integration, the global transmission of the COVID-19 shock has also highlighted the need for effective governance and international macroeconomic policy coordination.

Macroeconomics is therefore a dynamic area, and the Centre for Research in Macroeconomics and Macro-Finance (CReMMF) is well-placed to engage with the heated debate that these issues generate. We produce economic models and empirical work to help design macroeconomic policy, alongside new banking and financial regulations, for the post credit- and COVID-crisis world.

Policy challenges in emerging market economies (EMEs) are a key focus of CReMMF, both in past work and current research on monetary and fiscal policy complementarity. Within our group, another developing research strand focuses on regional responses to macroeconomic shocks; such analysis can feed into public policy in Wales. We also look at how monetary policies interact with inequality and redistribute wealth between different types of households. Recognising these interactions is important for understanding both inequality itself and how monetary policy really affects the economy. Other funded work considers regional inequality in China, in the context of shadow banking and government finance.

Our seminar programme will cover these and other key policy topics, ranging from the long-term impact of Trump’s tax cuts on the US stock market to the intergenerational effects of pension reform, how to get interest rates away from the zero lower bound, and whether central banks should target nominal GDP instead of inflation.

CReMMF has significant potential for impact, informing debate on how inequality, unemployment, investment and productivity react to diverse events, and how policy actions affect outcomes. It is also a platform for collaboration with other Swansea Centres (e.g. EMaRC and WELMERC), external researchers, and stakeholders from policy and industry. For more about our activities, contact

Blog written by: Dr Bo Yang and Dr Lucy Minford – lecturers in Economics
Date published: 07/07/2020