Ricardo Reis @R2Rsquared

Pleased to be in Bangkok for the IMFER Conference, co-hosted by @IMFNews and @bankofthailand. Looking forward to discussing how shifts in trade, investment, technology, and finance are reshaping the global economy and geoeconomic policymaking. imf.org/en/news/semina…

Extremely proud of our fantastic @LSEEcon PhD student @AnanyaKotia for winning the Daniel Cohen Award!!!

Paris School of Economics @PSEinfo

5 days ago

🏆 PSE & @ENS_ULM are pleased to announce the #DanielCohenAward 2026 winner: @AnanyaKotia, PhD student @LSEEcon, for his Job Market Paper "When Competition Compels Change: Trade, Management, and Productivity". 🔗 shorturl.at/Dws8D?utm_sour… Funded by Boussard & Gavaudan and AFPSE

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I typically do not post working papers. If anything, I prefer to write about published papers of mine (so rarely), or about the wonderful papers/colleagues from whom I learn so much (often about the #WEFIDEV network in #Finance & #Development). But this one feels a little different. "Microdata for Research in Macroeconomics and Finance" is a fun paper that I wrote along the way (@cepr_org DP link below), after @pogourinchas, #PetiaTopalova, and #NanLi from the @IMFNews reached out with the idea of taking stock of how microdata are changing research in macroeconomics and finance, stimulated by the excellent work of the @FCDOGovUK headed by @DennisNovy. The central idea is simple: over the last two decades, economics & finance have been transformed by the growing availability of granular data (credit registries, firm balance sheets, digital payments, and more). These allow us to move beyond aggregate averages & ask sharper questions. Who is constrained? Which firms respond to policy? How do payment systems reshape economic activity? Where are market imperfections most binding? And more. This matters everywhere, but especially in low-income countries, where importing policies from high-income settings can be misleading. Market frictions, informality, enforcement, institutional capacity, and financial infrastructure often differ in fundamental ways. Better policy requires understanding these mechanisms from the ground up. In the paper, I construct a new dataset of more than 1,900 academic publications using nine types of microdata, drawn from the top 50 journals in economics and finance between 2000 and 2025. The dataset combines bibliometric work, LLM-processing, and human verification.

Today @EconUCL has launched macromonitor.org -- a free, cutting edge, transparent and v frequently + regularly updated tool for nowcasting UK GDP and CPI. Congrats to my colleagues on a great public good and thanks to @swatdhingraLSE for a great keynote! @UCLPolicyLab

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📢 New paper w/ @GregWKaplan 🧵1/10 How small is “small” for local-linear methods to deliver reliable answers in heterogeneous-agent models of fiscal stimulus? Our answer: very small.

.@paulkrugman has argued Europe is not suffering an economic decline relative to the United States using Purchasing Power Parities. In this post (a revision, without paywall, of our @ProSyn one on Friday), @Ph_Aghion @a_bergeaud and I explain why a chain of current purchasing power parity (PPP) indexes tells us nothing useful about productivity growth. We make four points: First, a PPP measures purchasing power across places at one moment; a deflator compares prices across time in one place. A sequence of current-PPP comparisons is not a measure of real growth, because the prices used to value output change from year to year. Second, the two indexes need not agree. Difference the current-PPP comparison of France and the US across years and you recover the difference in their real growth plus a price residual. By 2024 the two are roughly 18 log points apart, enough to neutralize nearly all the measured growth divergence between France and America. This is due to two reasons Technology (our third point): where products improve fastest, as in information technology, the gap is largest. If a country doubles its computer output while the international price of computers halves, current PPP records no increase in value. (We all agree here.) Fourth, the baskets. It is impossible to find a basket of products that is simultaneously representative within each country, comparable across countries, and stable through time. (A novel point in the discussion). Convert GDP every year with a current PPP and French output per hour grows at a similar rate to the US. The match is built by the conversion. Nothing in it measures how much more either country produced. Krugman has now answered to our column, in a post dated May 30. I think we are not that far. We agree that European productivity growth has trailed the US for three decades; a current-PPP chain and a national deflator answer different questions; and the weighting mechanism is part of the story. We disagree on one. Krugman reads the flat current-PPP line as evidence Europe is not falling behind; we see it as the product of moving the price measurement stick every year. Finally, like @MESandbu on Friday in the @ft, @paulkrugman suggests as reductio ad absurdum that we should be willing to accept, if we believe our numbers, that the NL was way ahead of the US average in 2000 and declining ever since. We do not find the counter-example compelling. The counter example shows a clear decline of the Netherlands over a long period of time. That is the point!. Our claim (see my two Europes post): 1. Core Europe was very close to the US or higher 2 decades ago. 2. Every year since then we have seen much slower productivity growth. This has become particularly dire more recently. 3. This matters, particularly for our influence, our ability to sustain our welfare states, and our ability to pay for defense and other market goods. siliconcontinent.com/p/the-mismeasu…

@calltheball_ @lugaricano Here are migration rates for the working age population (via @claudeai ). That technology workers would be so different in levels is a bit suspicious.

@calltheball_ @lugaricano Thank you for this reference. I am a little suspicious of the numbers shown so I will dig into them. But note: 1. Firms are not workers. 2. US immigration policy changes negate preferences

I am late to the debate on whether Europe's economy is behind the US. Many quotes on this tweet by @lugaricano propose looking at health, inequality, happiness surveys, beauty of landscapes, driving around, etc. But there is a *better* way. And economists have used it for decades...

Luis Garicano 🇪🇺🇺🇦 @lugaricano

a month ago

We stopped everything to write an answer (link below) to Paul Krugman's two posts of today (one informal, one with a simple model) arguing that Europe is broadly not falling behind the United States. The change measured by the Draghi report, he argues, is mostly due to growth

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@jamesharrigan I am releasing a paper next week with it :-)

Which of the US or EU do economic agents choose to locate in? Their choice reveals how they weigh all the factors that matter. The relevant agent for productivity and economic growth are firms. So, the migration rates of startups reveals the economy where you want to be to grow and succeed:

Thursday (1:00 pm ET) there is a new episode of the @ClevelandFed’s Conversations on Central Banking, May 14. This time on "The Case for Central Bank Independence". Free and open to the public at this link: clefed.org/3QYkPio

Congratulations to @ludwigstraub for a well deserved honor. Read the prize description to learn about the exciting work he and others have been doing. The present and future of macroeconomic research is bright!

AEA Information @AEAInformation

2 months ago

Congratulations to Ludwig Straub (@ludwigstraub) of @Harvard, winner of the 2026 John Bates Clark Medal! aeaweb.org/about-aea/hono…

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11/end) And for more academic in-depth discussions of this topic see: x.com/R2Rsquared/sta…

Ricardo Reis @R2Rsquared

8 months ago

What happened since Wednesday in the US repo money markets? Why did banks have to borrow $15.1bn from the Fed's recent lending facility? Could we see this coming? What does it imply for QT? (good clues in this thread...) [1/5] ft.com/content/60663a… via @FT

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10) For the full discussion, the video is available here: youtube.com/live/HrTIj5h1N…

9) My written comments are here. These will appear in the Brookings Papers on Economic Activity @BrookingsInst. personal.lse.ac.uk/reisr/papers/2…

8) "Stigma" is an expression used to explain why US banks leave money on the table and do not use some Fed standing facilities. To my ears, this is doublespeak for US supervisory failures and/or flaws in the design of those facilities. They can and should be corrected.

** Reducing the Fed's balance sheet ** Ten days ago, I was part of a discussion at @BrookingsInst on how to shrink the Fed's balance sheet with Darrell Duffie and @WenxinDu. I tried to lay out the discussion in terms that, hopefully, clarify it to a broader set of economists. Here are the main points: 🧵

7) The elastic supply of money can be achieved by a standing repurchase facility open to banks, along the lines of the ones existing at the Bank of England or the ECB. (Andrew Bailey laid out the reasons for this strategy at his @FMG_LSE Goodhart 2024 lecture) bankofengland.co.uk/speech/2024/ma…

6) Keeping interest rates in money markets from becoming dangerously volatile while reducing the size of the balance sheet requires committing to an elastic supply of reserves. (Isabel Schnabel has several speeches on this) ecb.europa.eu/press/key/date…

5) Policies to reduce the balance sheet of the Fed are synonymous with policies that reduce the demand for bank reserves. You cannot do one without the other (Lori Logan and Sam Schulhofer-Wohl @DallasFed have been making this point for a while.) federalreserve.gov/monetarypolicy…