September 30, 2019
On October 18th, M. Sc. (Econ.) Michaela Schmöller will defend her doctoral thesis “Endogenous Technological Progress and the Macroeconomy: Stagnation, Low Interest Rates and the Productivity Slowdown”. Schmöller studies the role of endogenous technology growth in macroeconomics and the sources behind the currently observed slowdown in productivity. Her work focuses on explaining deep recessions and episodes of secular stagnation.
Schmöller’s work contributes to the literature on macroeconomics and departs from the standard paradigm in two central aspects: Firstly, by incorporating endogenous technology growth and, secondly, by accounting for nonlinearities, above all the zero lower bound constraint on nominal interest rates. Her dissertation points out that deficient aggregate demand may, against the conventional view, also transmit to aggregate supply by weighing down technology-enhancing investments. Hence, subdued demand may depress the economy’s longer-term growth prospects, blurring the lines between cyclical fluctuations and the economy’s long-run trend path. Based on these models, Schmöller derives macroeconomic policies for an environment of low interest rates and weak productivity growth.
Michaela Schmöller works as an Economist at the Monetary Policy and Research Department of the Bank of Finland.