Rosen Valchev
Boston College, MA·Social Science
Many models of the economy assume that people and firms know the best decision and always make it. Real decisions are complex, and the best choice is often not obvious.
- Fields
Social Science
Mathematics & Statistics
Computer Science
- Topics
macroeconomics
bounded rationality
learning
- Grants
- 1 known grant, through Jul 2028
What they work on
- Develop the theory of a learning framework in which decision makers choose how much costly reasoning to do and update beliefs from experienced outcomes, and analyze its short-run and long-run properties.
- Apply the framework to household consumption and saving in a model with diverse households, incomplete markets, durable and non-durable goods, and liquid and illiquid assets.
- Apply the framework to firm investment dynamics, including fixed investment costs, firm entry and exit, and borrowing constraints, to see how learning frictions change the economy's supply side.
More about the research
This collaborative project builds macroeconomic models in which households and firms learn their best behavior over time in two ways. One is reasoning: costly, introspective thinking. The other is experience: updating beliefs from the outcomes of past choices. The goal is more realistic models of the US economy, which could give new insight into how fiscal and monetary policy reach their targets.
Why it matters
Models in which households and firms learn through reasoning and experience could predict real economic behavior more accurately than full-information models. Policymakers could then better judge how government fiscal and monetary decisions affect household spending and saving and business investment.
Known grants
From NIH and NSF research grants. Labs often have other funding we can't see.
Closest labs
Robert Johnson
University of Notre Dame, IN·Social Science
Model how occasionally binding capacity limits in supply chains shift domestic and import price Phillips Curves and fuel inflation, using a multisector open-economy New Keynesian model.
Rohan Kekre
University of California-Berkeley, CA·Social Science
Decompose the drivers of the U.S. dollar exchange rate against other advanced-economy currencies, using a general equilibrium model in which global arbitrageurs intermediate capital flows across borders.
Mikkel Plagborg-Moller
University of Chicago, IL·Social Science·Early-career
Develop an inference procedure with formal coverage guarantees for visualizing multi-dimensional cross-sectional heterogeneity, such as differences in dynamic response profiles across groups of households or firms.
The school
Boston College: 11 labs on PI Pages, $96M a year on research, 161 research doctorates a year.
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