Giancarlo Corsetti, born in Rome, Italy, in 1960. Ph.D. from Yale University, New Haven. Chair in Macroeconomics at the University of Cambridge.
Willem F. Duisenberg Fellow (15 March 2012 – 30 June 2012)
Rethinking Economic Policy in a monetary Union
The introduction of the Euro has produced mixed results for the European economy. On the positive side, its adoption went much more smoothly than anticipated by many critical observers; as was the degree of success in achieving price stability. On the negative side, we are now increasingly aware that the strong convergence in interest rates in Euros across countries acted as a destabilising factor in the process of economic convergence.
Inefficiently low interest rates and the differing spread compression between countries (a phenomenon by no means unique to Europe) favoured excessive borrowing and thus the emergence of large imbalances in the Euro area, eventually leading to the current crisis.
The goal of the project is to develop a general model of currency integration focusing on key financial and real imperfections as key challenges to the design of policies and institutions at national and union-wide level.
“International Risk Sharing and the International Transmission of Productivity Shocks”, with Luca Dedola and Sylvain Leduc, Review of Economic Studies 2008, vol 75 (2) 443-473.
“Does One Soros make a difference? A theory of currency crises with large and small traders”, with Amil Dasgupta, Stephen Morris and Hyun Son Shin, Review of Economic Studies, vol 71(1), January 2004, pp 87-113.
“Welfare and macroeconomic interdependence”, with Paolo Pesenti, October 1997, w.p.6307 National Bureau of Economic Research. Quarterly Journal of Economics, vol 116(2), May 2001, pp 421-45.