Kenneth Rich

Assistant Professor of Economics @OleMiss | @NCState PhD | Interested in Macro, Applied Time Series, and Monetary & Fiscal Policy

[Kenneth Rich @KennethMRich]

New draft out!

Must be spring break — another paper update 😅

Conventional VARs can't recover fiscal shocks when agents anticipate policy changes.

I demonstrate that an MS-BVAR solves this by showing that regime switching is both the source of foresight and the key to identification.

Key Results:

1) Spending multipliers are large and state-dependent (1.4–1.8 in recessions, ~1.0 in expansions).

2) Tax multipliers: consistently small across all regimes — much smaller than conventional estimates suggest.

https://t.co/EcfG3bavMG

[Kenneth Rich @KennethMRich]

@SaffronOlive One Piece…however there’s already the OPTCG

[Kenneth Rich @KennethMRich]

Today’s economics lesson: Gains from trade

[Kenneth Rich @KennethMRich]

@BrianCAlbrecht

[Kenneth Rich @KennethMRich]

@nd_econ Love this for them.

[Kenneth Rich @KennethMRich]

To add to this: Both Keynesians (e.g., Tobin) and Monetarists (Brunner and Meltzer) shared views about monetary transmission that most New Keynesian models simply ignore.

For instance, Tobin (AEA: P&P, 1961) and Brunner and Meltzer (JPE, 1972) emphasize that a complete theory of monetary transmission must discuss how policy changes the relative price of inside to outside money.

My 2023 BEJM paper discusses this in more detail.

[Stéphane Surprenant @S_Surprenant]

One of the things you quickly learn when doing serious work in economics is that seemingly disperate ideas may be strongly related.

Local projections and VARs are a good example. Of course, if you know about Dufour's work, you heard of Dufour and Renault (1998) and you were not at all shocked by equivalence results in Plagborg-Moller and Wolf (2021).

That isn't all. DSGE models imply a VARMA structure. That's the ABC (and D's) paper of Fernandez-Villaverde et al. (2007). More generally, a DSGE model is a constrained DFM. The empirical tools we use estimate the objects we often care about in theory -- dynamic causal effects of shocks, their share of variance explained, etc. And you can write *all* of this using the treatment effect or potential outcome language most often seen in microeconometrics. Some non-trivial insights on the difficulty to estimate nonlinear effects emerge from that (e.g., Kolesar and Plagborg-Moller, 2025).

A lot of people who comment on social media go for political punch lines, engaging in attention farming and limiting themselves to superficial differences. But that's unserious.

[Kenneth Rich @KennethMRich]

@Bellmanequation I just realized Jim’s (my advisor back at NC State) name is in the acknowledgements 😂

[Kenneth Rich @KennethMRich]

@40yoap 🤣

[Kenneth Rich @KennethMRich]

New (non-macro) PR! 💪

Started lifting consistently at the start of last semester.

Could barely handle 25s then.

Hit 45s this morning.

[Kenneth Rich @KennethMRich]

Also before anyone comments…I know 🙃

[Kenneth Rich @KennethMRich]

The week before I head to Japan 🫠🫠🫠

[The Kobeissi Letter @KobeissiLetter]

BREAKING: Japan confirms it has once again intervened in the currency market and conducted a Yen-buying operation.

[Kenneth Rich @KennethMRich]

@BachmannRudi I stopped reading as soon as I saw “Pigouvian tax” as one of the keywords.

[Kenneth Rich @KennethMRich]

@JMuchorowski Looks interesting…is there a copy of a working paper somewhere?

[Kenneth Rich @KennethMRich]

@mikekofoed @ekgibbons (Also Vinick should have absolutely won. Plot armor, not the Electoral College, put Santos into office 😂)

[Kenneth Rich @KennethMRich]

@mikekofoed @ekgibbons Mine too.

However, I always joke with my students that the most unrealistic part about the West Wing is that an economist was elected President.

[Kenneth Rich @KennethMRich]

@BryanPCutsinger Congrats Bryan!

[Kenneth Rich @KennethMRich]

@40yoap Learn something new everyday!

I am actually excited to read this

[Kenneth Rich @KennethMRich]

@MosheEcon @40yoap My students have gone to graduate schools and internships at regional Fed banks.

[Kenneth Rich @KennethMRich]

I personally teach Intermediate Macro using the Garin, Lester, and Sims text (which is available on Eric Sims’ website).

We cover a simple two-period consumption-saving model that can be extended to discuss topics like microfoundations, Ricardian Equivalence, and the Neoclassical and New Keynesian models.

This paper seems like a great complement to consider for future classes.

All for incorporating DSGE models into the undergraduate curriculum.

[Mestrando Zinho @ZinhoFFz]

Sobre a discussão IS-LM e/ou DSGE na graduação, deixo pra outros. Minha contribuição para o graduando interessado (ou algum professor que busca ideias): leiam este artigo!

https://t.co/HKOevvU8gX

[Kenneth Rich @KennethMRich]

@AngusBylsma My intermediate macro in undergrad was 4 weeks review of Principles, 4 weeks Solow, and the remainder was IS/LM.

However that was about 14 years ago 💀