BI Research Centre

Centre for Applied Macroeconomics and Commodity Prices (CAMP)

CAMP is established to bring together economists working on applied macroeconomic issues, with special emphasis on energy economics.

MACROCAMP

CAMP has received funding from the Research Council of Norway (RCN) for a new research project “RCN: 315008 The Corona-crisis, structural change, and macroeconomic policy”. The project, is named ‘MACROCAMP’ for short, and is headed by Professor Hilde C. Bjørnland (BI and CAMP) in cooperation with Professor Leif Anders Thorsrud (BI and CAMP), Professor Ragnar Torvik (NTNU and CAMP), and researchers from the Australian National University, Indiana University, and Norges Bank. The project has been awarded NOK 12 million by RCN and is due to begin in the fall of 2021 and finish in the fall of 2024.

Background

The Corona pandemic has had a dramatic impact on business and society, and it is unlikely that the global economy will return to a pre-2020 normal. Even as the coronavirus starts to recede, we remain at the beginning of a global climate crisis set to fundamentally change the economy.

A fundamental problem with current economic models is that they assume stable economic relationships for example between industrial sectors, production, employment, and capital. Looking ahead, that is clearly inadequate. The pace of change is increasing, and policymakers need tools that can monitor the economy in real-time and theories able to capture structural economic change.

The project

The main idea behind the project is to combine different data sources, alternative methodological approaches and new economic theories to study drivers of economic crises, structural changes and the effect of economic policy.

The first part of the project will explore the possibility of setting up an early warning system for global incidents such as the pandemic and analyze how the pandemic and subsequent policy actions have affected the three small open economies Australia, Norway, and Sweden. As a part of the project, the researchers will use machine learning and natural language processing technologies, and alternative data sources, such as daily media coverage of economic news to capture signals of economic developments.
The second part of the project will study how crisis events affect ongoing structural changes in the economy and discuss the role of economic policy in such transformations.
In the final part, the researchers will extract detailed micro data to understand how structural change and large macroeconomic shocks affect individual firms and households behaviour, and study the macroeconomic implications of such microeconomic behaviour.