Every year SNDE offers and unparalleled opportunity to discuss quantitative work in macroeconomics, learn from the best and exchange ideas for new projects. Indeed, a crazy bunch of people meet, who like SVARs, get excited about concavity of loss functions and worry about the recursive patterns. All in the service of understanding the economies better through more adequate processing of the data. This year Ricardo Reis gave a keynote on modern faces of financial repression, a video of this talk can be found here. The second keynote was delivered by Martin Ellison.

We spoke about our work of embedding new-keynesian DSGE model in an overlapping generations network, or, alternatively :), introducing demographics into NK-DSGE models. Our paper explores the extent to which aging populations ought to experience a decline of unemployment. Part of the effect is just mechanical: there are fewer young workers, who tend to experience higher unemployment rates and more people above prime age, who statistically tend to be almost never unemployed. But this mechanical effect should generate a reaction of the economy: employers will adjust their job creation and job posting. And people will adjust job search effort. We construct a model to quantify these effects. In an empirical exercise calibrated to the Euro area, we show that demographic change has reduced the unemployment rate by about two percentage points.