PhD candidate at BI Maximilian Schröder.
The award recognizes the best paper in time series modeling presented at the SNDE (Society for Nonlinear Dynamics and Econometrics) Symposium by a young researcher who is either a current PhD student or less than eight years into their research career.
Schröder’s paper´Mixing it up: Inflation at risk´ provides a comprehensive view of macroeconomic risk and its drivers, drawing from various research disciplines such as economics, finance, and computer science. In application, the study illustrates that the recent surge in U.S. inflation risks was significantly driven by rising commodity prices and the recovery of the country's business cycle following the pandemic.
A highly versatile approach to risk assessment
“The framework Max has developed is very adaptable and has numerous applications, including but not confined to the realm of monetary policy. Accurate measurement and prediction of risk is key to better decision-making both in public policy and beyond, so this is highly valuable research,” says Maximilians’s PhD supervisor and Professor in Economics at BI Leif Anders Thorsrud.
Applications in this area are already underway and Schröder’s framework has attracted interest from several central banks.
“Compared to available models, the proposed framework has a key advantage: It does not only measures risks more comprehensively, but also helps policy-makers assess the elements responsible for the rise or reduction of risks. This means that risk factors become observable. In the policy making process this allows the assessment of whether assumptions made on key risk factors are backed up by economic data, enabling more informed decision making. But the framework is not limited to policy-making. It applies in literally any context in which one would like accurate assessments of uncertainties around predictions and at the same time analyze what drives these risks,” says Schröder.”
He is now preparing for the final submission of his doctoral thesis.
"The recognition and acknowledgement that come with this award are profoundly humbling. It is reassuring to have tenured and experienced researchers and academics validate my work. Currently, I am in the process of rewriting my paper and plan to hand in my thesis either this month or the next. Receiving this award is truly motivating and allows me to go about my planned revisions and submission of my thesis with heightened confidence,” he says.
You can read the full paper here.