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Granular Origins of Aggregate Fluctuations

  • Full or part time
  • Application Deadline
    Friday, April 26, 2019
  • Funded PhD Project (Students Worldwide)
    Funded PhD Project (Students Worldwide)

Project Description

Understanding the origins of booms and busts in economic activity has been at the core of economic science for years. However, since the financial and global crisis that started in 2007, traditional macroeconomic approaches have not been able to provide much policy guidance and economists do not seem to agree on which policies to use for economic recovery. This research project wants to provide a new and different approach to analysing macroeconomic performance, by recognizing that large firms are remarkably important for the evolution of the aggregate economy [1]. Hence, limiting their exercise of market power should thus be an important policy concern if we want the economy to reach efficiency. Excessive exercise of monopoly will lead to losses of static efficiency, the usual deadweight loss, but also to dynamic efficiency losses, i.e. lack of innovation and new product introduction. Entry is still important to the extent that future champions have to start somewhere. Often they enter in sectors that subsequently show a very dynamic growth path. They are not that important for aggregate fluctuations in their own right, but blocking their entry, for example because incumbents engage in foreclosure practices, can have an important effect on longer term growth.

The current project wants to contribute to understanding the ‘granular origins’ of aggregate fluctuations (such as employment, GDP, exports, imports, etc.). By using unique (often confidential) micro data on firms, products and prices, we aim to address the following questions: What is the role of firm size, firm age, entry and exit for unemployment fluctuations? And how does regional concentration of economic activity affect firm growth and aggregate employment? What is the relationship between trade and firm growth and how does this impact on aggregate productivity growth and GDP? How should we think about trade in global supply chains and how vulnerable does it make aggregate growth? How important is the growth of cities for aggregate fluctuations? What is the role of firm level competitiveness (in terms of product quality and unit labour costs) for aggregate growth?
Reference: PHD-BLPRULMS-2019

The University of Liverpool Management School
The University of Liverpool Management School is a world leading centre for management and leadership training, education and research. The School is one of an elite group of institutions worldwide to be AACSB Accredited. The achievement of AACSB accreditation means that not only has the School met specific standards of excellence, but has also made a commitment to on-going improvement to ensure that the institution will continue to deliver high quality education to its students.

Part of the research intensive Russell Group of Universities, the Management School’s 150 international experts shape world-class academic thought and make a direct impact on a wide range of organisations and institutions. These experts publish in top-tier journals across many research areas and take a number of editorships in prestigious academic journals. Our investment in an excellent research environment and a flourishing cohort of PhD researchers coupled with our refreshingly interdisciplinary focus put the Management School at the forefront of academic research, making a difference to our many local, national and international partners.

Funding Notes

You will receive an annual stipend of £14,553 plus a fee waiver and will have access to student support funds in line with the wider doctoral training provision at ULMS. These fellowships will be open to all nationalities and subject areas. Home students receive a full School studentship (fees and maintenance grant). Overseas students will receive a fee contribution at Home/EU rates and the difference in cost must be paid by the applicant; the maintenance grant for Overseas students is identical to Home/EU students.


[1] While the literature has explored the role of sectoral shocks in aggregate fluctuations (e.g. Long and Plosser, 1983), the role of firms in the aggregate business cycle has received relatively little attention.
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Sutton, J. (2012) “Competing in Capabilities: The Globalization Process,” Oxford University Press, Oxford, UK.

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