Ricardo A. M. R. Reis (born 1 September 1978) is a Portuguese
economist
An economist is a professional and practitioner in the social sciences, social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
and the A. W. Phillips professor of economics at the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
. In a 2013 ranking of young economists by
Glenn Ellison
Glenn David Ellison (born 1965) is an American economist who is Gregory K. Palm Professor of Economics at the Massachusetts Institute of Technology (MIT) and an Elected Fellow of the Society for the Advancement of Economic Theory and American Aca ...
, Reis was considered the top economist with a PhD between 1996 and 2004., and in 2016 he won the
Germán Bernácer Prize
The Bernacer Prize is awarded annually to European young economists who have made outstanding contributions in the fields of macroeconomics and finance. The prize is named after Germán Bernácer, an early Spanish macroeconomist.
The prize was ...
for top European-born economist researching macroeconomics and finance. He writes a weekly op-ed for the Portuguese newspaper
Jornal de Notícias
''Jornal de Notícias (JN)'' (; meaning ''News Journal'' in English) is a Portuguese daily national newspaper, one of the oldest in Portugal.
History and profile
''JN'' was founded in Porto and was first published on 21 June 1888. It was one of ...
and
Expresso
Expresso may refer to:
* Espresso, a coffee beverage
* eXpresso, a hosted workspace for Microsoft Office communities
* Expresso (Donkey Kong), a character in the ''Donkey Kong Country'' series
* ''Expresso'' (newspaper), based in Lisbon, Portug ...
, and participates frequently in economic debates in
Portugal
Portugal, officially the Portuguese Republic ( pt, República Portuguesa, links=yes ), is a country whose mainland is located on the Iberian Peninsula of Southwestern Europe, and whose territory also includes the Atlantic archipelagos of ...
.
Academic career
Reis earned his
Bachelor of Science
A Bachelor of Science (BS, BSc, SB, or ScB; from the Latin ') is a bachelor's degree awarded for programs that generally last three to five years.
The first university to admit a student to the degree of Bachelor of Science was the University of ...
(B.Sc.) degree from the
London School of Economics
, mottoeng = To understand the causes of things
, established =
, type = Public research university
, endowment = £240.8 million (2021)
, budget = £391.1 millio ...
in 1999, and his
Doctor of Philosophy
A Doctor of Philosophy (PhD, Ph.D., or DPhil; Latin: or ') is the most common Academic degree, degree at the highest academic level awarded following a course of study. PhDs are awarded for programs across the whole breadth of academic fields ...
(Ph.D.) from
Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of higher le ...
in 2004. He taught at
Princeton University
Princeton University is a private university, private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth, New Jersey, Elizabeth as the College of New Jersey, Princeton is the List of Colonial Colleges, fourth-oldest ins ...
from 2004 to 2008 before moving to
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
where he became a full professor at the age of 29, one of the youngest ever in the history of the university. He is an academic advisor and visiting scholar at central banks around the world, and sits on the board of multiple institutions.
Economic contributions
Sticky information and inattentiveness
In 2002, with
Gregory Mankiw
Nicholas Gregory Mankiw (; born February 3, 1958) is an American macroeconomist who is currently the Robert M. Beren Professor of Economics at Harvard University. Mankiw is best known in academia for his work on New Keynesian economics.
Mankiw h ...
, Reis proposed the sticky-information
Phillips curve
The Phillips curve is an economic model, named after William Phillips hypothesizing a correlation between reduction in unemployment and increased rates of wage rises within an economy. While Phillips himself did not state a linked relationship ...
and followed it later with rational theories of inattention, and sticky-information models in general equilibrium. This model of
nominal rigidities is based on the slow diffusion of information among the population of price setters and displays three related properties that are more consistent with accepted views about the effects of monetary policy. First, disinflations are always contractionary (although announced disinflations are less contractionary than surprise ones). Second, monetary policy shocks have their maximum impact on inflation with a substantial delay. Third, the change in inflation is positively correlated with the level of economic activity.
Empirical study of disagreement in surveys
In 2004, with
Gregory Mankiw
Nicholas Gregory Mankiw (; born February 3, 1958) is an American macroeconomist who is currently the Robert M. Beren Professor of Economics at Harvard University. Mankiw is best known in academia for his work on New Keynesian economics.
Mankiw h ...
and
Justin Wolfers
Justin James Michael Wolfers, born in 1972, is an Australian economist and public policy scholar. He is professor of economics and public policy at the Gerald R. Ford School of Public Policy at the University of Michigan, and a Senior Fellow at ...
, Reis started the modern empirical literature that focuses on disagreement in surveys. A large literature that followed has documented the empirical properties of disagreement, has shown that it is very different from uncertainty, and has used it as moments to evaluate imperfect information models.
Pure inflation
In 2010, with
Mark Watson
Mark Andrew Watson (born 13 February 1980) is a British comedian and novelist.
Early life
Watson was born in Bristol to a Welsh mother and English father. He has younger twin sisters and a brother, Paul. He attended Bristol Grammar School, wh ...
, Reis developed measures of pure inflation, which have become popular measures of
core inflation
Core inflation represents the long run trend in the price level. In measuring long run inflation, transitory price changes should be excluded. One way of accomplishing this is by excluding items frequently subject to volatile prices, like foo ...
used by central banks around the world.
The diabolic loop and ESBies
In 2011, Reis with
Markus Brunnermeier
Markus Konrad Brunnermeier (born March 22, 1969) is an economist, who is the Edwards S. Sanford Professor of Economics at Princeton University, and a nonresident senior fellow at the Peterson Institute for International Economics. He is a faculty ...
,
Luis Garicano
Luis Garicano Gabilondo (born 1967 in Valladolid) is a Spanish economist and politician who was a Member of the European Parliament (MEP) from Spain since 2019. He was also vice president of Renew Europe and vice president of the European politi ...
,
Philip R. Lane
Philip Richard Lane (born 27 August 1969) is an Irish economist who has been serving as a member of the Executive Board of the European Central Bank since 2019 and concurrently as ECB chief economist. He previously served as Governor of the Ce ...
and others, argued that banks holding significant amounts of bonds issued by their sovereign creates a "diabolic loop", whereby small changes in the perceived solvency of the sovereign can amplify into large crises. This concept has become central in accounts of the
Euro crisis
The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone membe ...
and is also referred to as the "doom loop" or the "bank-government nexus". They proposed creating European Safe Bonds (ESBies), a new financial vehicle allowing banks in the Eurozone to break the diabolic loop without creating the problems of joint and several liability with Eurobonds. The
European Systemic Risk Board
The European Systemic Risk Board () is a group established on 16 December 2010 in response to the ongoing financial crisis. It is tasked with the macro-prudential oversight of the financial system within the European Union in order to contrib ...
proposed a variant of ESBies, labelled Sovereign Bond-Backed Securities (or SBBS) as a crucial ingredient to have a more stable Eurozone.
HANK models
In 2012, Reis wrote the first model that merged the Aiyagari model of incomplete markets with a New Keynesian model of nominal rigidities. In 2016, he published the first business-cycle model that merged the Krusell-Smith model of business cycles with the Christiano–Eichenbaum–Evans model of monetary policy. These models were later baptized HANK, or Heterogeneous Agent New Keynesian Models.
Central bank solvency
In 2013, with
Robert E. Hall, Reis invented the concept of central bank insolvency to describe the impact of possible losses from
quantitative easing
Quantitative easing (QE) is a monetary policy action whereby a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. Quantitative easing is a novel form of monetary pol ...
programs.
The misallocation hypothesis of slumps and crashes
In 2013, Reis proposed the misallocation hypothesis for the European slump and crash. It contends that by joining the eurozone, countries in the European periphery enjoyed large capital inflows, but their underdeveloped financial and political systems misallocated this capital leading to a slump in productivity and sowing the seeds of the crisis. Fast financial integration without financial depth creates a slump and a crash. Some accounts of why low real interest rates can be causing misallocation and low productivity build on his idea.
QE and satiating the market for reserves
In 2016, at the
Kansas City Federal Reserve economic policy symposium, Reis proposed that a central bank's balance sheet should be just large enough to satiate the demand for bank reserves. In modern monetary systems, where deposits at the central bank are the key monetary instrument, ensuring that the deposit rate equals the private interbank rate achieves the
Friedman rule
The Friedman rule is a monetary policy rule proposed by Milton Friedman.M. Friedman (1969), ''The Optimum Quantity of Money,'' Macmillan Friedman advocated monetary policy that would result in the nominal interest rate being at or very near zero. H ...
.
Automatic stabilizers
In 2016, with Alisdair McKay, Reis showed that
automatic stabilizers In macroeconomics, automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and welfare spending, that act to damp out fluctuations in real GDP.
The size of the government budget deficit tends to ...
can be very effective by reducing the need for precautionary savings at the start of recessions.
[McKay, A. and R. Reis (2011) "The Role of Automatic Stabilizers in the U.S. Business Cycle," NBER working paper 16775 .]
References
External links
Official website at the LSEThe Phillips lecture*
{{DEFAULTSORT:Reis, Ricardo
1978 births
Living people
21st-century Portuguese economists
Alumni of the London School of Economics
Harvard University alumni
New Keynesian economists
Academics of the London School of Economics
Fellows of the Econometric Society