The Department of Finance is hosting a Lunch Seminar series featuring distinguished researchers from around the globe, taking place in Luxembourg.

Summary:

This seminar will delve into the macroeconomic implications of the Treasury yield curve, particularly how it aids investors in distinguishing between permanent and temporary shocks to the economy. A macro-finance model will be discussed, highlighting the influence of long-term trends and short-term cycles on factors such as inflation, growth, and monetary policy. The model illustrates how a representative investor, who lacks visibility into the breakdown of macroeconomic variables, engages in Bayesian learning. Notably, the findings indicate significant uncertainty surrounding long-term real interest rate estimates, contrasting sharply with results yielded by models based on perfect information. The yield curve's response to structural shocks may be skewed due to the investor's difficulty in differentiating trends from cycles amidst macroeconomic fluctuations.

About Prof. Roussellet:
Profile - Biography

The seminar will take place at the venue, and cold lunches will be available for registered participants.