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May 9, 2024 | News

Cowles Foundation Hosts 18th Annual Conference on General Equilibrium

GE Conf
James R Anderson Photography

On April 27-28, a stellar cast of speakers and 50+ attendees came together for the 18th Annual Conference on General Equilibrium (GE) and its Applications. This year's conference explored an exceptionally wide range of themes, showcasing the relevance of General Equilibrium for other fields, including macroeconomics, financial economics, inequality, behavioral decision making, and externalities.

With many repeat attendees at the conference, “Many people told me it was the best GE conference in years,” co-organizer John Geanakoplos said.

Paper topics included a rehabilitation of the Philip’s Curve, a proposal for reinvigorating inter-bank trade, a theoretical explanation of the length of credit chains, two theoretical explanations for asset prices and growth with low interest rates, competitive markets for personal data, and three papers on behavioral decision making. One of these modeled mortgage prepayments, another recursive utilities, and another gave a novel empirical test using option prices for detecting preferences for the early resolution of uncertainty. The papers are available for download here.

GE Conf Jian Li
James R Anderson Photography

Jian Li (Columbia University) presenting “Intermediation via Credit Chains,” work co-authored with Zhiguo He (Stanford University)

According to conference co-organizer Eduardo Dávila, one of the many research highlights from the conference included the presentation of Nicolas Werquin (Yale PhD ’15), who provided empirical evidence on the observed concentration of consumption, labor income, wealth, and capital income at the top of the distribution—and provided a heterogeneous agent general equilibrium model able to account for those empirical patterns. “These findings are of first-order importance as they directly influence income and capital taxes,” said Dávila. Joseph Vavra (Yale Phd ’12) presented a general equilibrium mortgage pricing model with heterogeneous borrowers to highlight how equilibrium effects induced cross-subsidies from borrowers who rarely refinance to those who refinance often. "Professor Vavra is leveraging this model to explore the efficacy and redistribution impact of mortgage reforms—this is just one many important policy issues covered at the conference," said Dávila.

Similar to past years, an important component in many of the papers was the role that individual heterogeneity plays in shaping macroeconomic and financial aggregates. While all papers had a theoretical component, many of the papers also used empirical methods and computational tools. “Overall, the conference illustrated the far-reaching implications of general equilibrium, and as always, the conference had a constructive and friendly atmosphere,” said Dávila.

The conference attracted a diverse array of participants from top universities across the United States and abroad, as well as policy institutions, such as the Federal Reserve and the Office of Financial Research.

The speakers included:

  • Joseph Vavra (University of Chicago)
  • Jian Li (Columbia University)
  • Francesca Carapella (Federal Reserve Board of Governors)
  • Benjamin Hébert (University of California, Berkeley)
  • Marlon Azinovic (University of Pennsylvania)
  • Stephanie Schmitt-Grohé (Columbia University)
  • Elena L. del Mercato (Université Paris)
  • Jan Werner (University of Minnesota)
  • Michael Richter (University of London)
  • Hengjie Ai (University of Wisconsin-Madison)
  • Nicolas Werquin (Federal Reserve Bank of Chicago)
  • Jacopo Perego (Columbia University)

The program was organized by Eduardo Dávila, Ana Fostel, John Geanakoplos, Felix Kubler, Herakles Polemarchakis, Paolo Siconolfi, and Alp Simsek. “This is our second time hosting the GE Conference in the new Economics Department building, and it continues to be a great experience,” said Geanakoplos.

The agenda and full conference details are available here:
18th Annual Conference on General Equilibrium and its Applications.