Political Economy and Public Economics
Political Economy and Public Economics
The Department of Economics at the University of Warwick has an active Political Economy and Public Economics (PEPE) Research Group. These two disciplines have natural complementarities. Political Economy focuses more on the political feasibility of certain policies by looking at which policies are more likely to enjoy public support and thus succeed in an electoral contest. Public economics looks more at determining which policies are optimal in every environment, but is less concerned about their political approval or feasibility.
Recent world events such as the public backlash against globalization and inequality have raised awareness for the need for more integration between these two approaches as political resistance to the adoption of potentially beneficial policies has become ever more salient. Hence by their very nature these two disciplines transcend traditional field divisions such as micro and macroeconomics: they use theoretical, empirical and experimental methods to obtain conclusions, thus generating synergies with various other groups in our department from development to experimental to history to macroeconomics to economic theory.
Our activities
PEPE Research Group Seminar
Thursday: 11.15am-12.30pm
A weekly seminar is organised that brings top economists and political scientist speakers every week for a double-feature seminar in coordination with the LSE.
For a detailed scheduled of speakers please follow the link below:
https://warwick.ac.uk/fac/soc/economics/seminars/seminars/political-economy
Organisers: Michela Redoano and Mateusz Stalinski
PEPE Research Group Annual Conference
In collaboration with colleagues from Princeton and Yale, and with the support of CEPR, the PEPE Research Group organises an annual conference which has become a central meeting of political economists in Europe. Having taken place in previous years in Venice and Rome, it attracts over 70 delegates attending from leading institutions in the US, EU and the UK. Every year, several of our PhD students get to participate in a fully funded conference with an opportunity to engage with leading scholars.
Find out more about this year's conference which will take place 26-27 April 2024 in Rome.
Organisers: Helios Herrera, Mateusz Stalinski
People
Academics
Academics associated with the PEPE Research Group are:
Research Students
Events
Macro/International Seminar - Marta Morazzoni (UCL)
Title of paper: Monetary Policy in a Multimarket Economy: The Role of Demand and Adjustment Costs.
Here is an abstract: What is the role of demand elasticities and price adjustment costs in shaping the heterogeneous response of firms’ markups to monetary policy shocks? In this paper, we build a novel heterogeneous firms New Keynesian model where markups evolve endogenously over firms’ life cycle, which we further enrich with firm-specific price rigidities and a multi-market structure. Crucially, firms’ growth is market-specific, leading to heterogeneous size and markup distributions on different markets. Since markets cannot be identified in the data, we show that market shares are badly proxied by firm size and can instead be empirically related to firm age. This is consistent with evidence that old firms in Compustat have a more countercyclical markup response after an unexpected contractionary monetary policy shock. Our framework predicts that dominant firms on each market face a more inelastic demand, which implies a lower pass-through rate from costs to prices, but also higher costs to adjust prices. Therefore, after a contractionary monetary policy shock, dominant firms pass less the reduction in marginal costs to prices compared to competitors, and increase their markups by more, as we document empirically. Both margins point towards important implications for monetary policy transmission and amplification.