BARTOSZ MACKOWIAK

Home Address:    28 Leigh Avenue    Princeton, NJ 08542-3112    Tel: (609) 430-7510 Office Address:   Department of Economics   Princeton University   Princeton, NJ 08544-1021   Tel: (609) 258-3999   Fax: (609) 258-6419 Birth Date: April 17, 1973 Citizenship: Polish

Fields of Concentration

International Finance Macroeconomics Applied Time Series Econometrics

Desired Teaching:

International Finance Macroeconomics Applied Time Series Econometrics

Comprehensive Examinations Completed:

International Economics and Macroeconomics (Oral), 1998 Microeconomic and Macroeconomic Theory (Written), 1997

Dissertation Title:

Essays on Dynamics of Fixed Exchange Rate Regimes and Macroeconomic Fluctuations in Emerging Markets

Committee:

Professor William Brainard Professor Giancarlo Corsetti Professor Christopher Sims (principal advisor)

Expected Completion Date:

May 2002

Education and Degrees:

Visiting Student, Department of Economics, Princeton University, 2000-present M. Phil., Economics, Yale University, 1999 B. A. Magna Cum Laude, Economics, Amherst College, 1996 Visiting Student, Economics, Mansfield College, Oxford University, 1994-95

Fellowships, Honors and Awards:

John F. Enders Research Grant, Yale University, 2000 Yale University Fellowship, Yale University, 1996-2000 Dissertation Fellowship, Yale University, 2000 Ryoichi Sasakawa Fellowship for outstanding students in international economics, Yale University, 1998 Amherst College Memorial Fellowship, 1997-99 John Woodruff Simpson and Roswell Dwight Hitchcock Fellowships, Amherst College, 1996-97 Phi Beta Kappa, Amherst College, 1996 The James R. Nelson Memorial Award, Amherst College, 1996 The Georges Lurcy Scholarship in the Class of 1996 for an outstanding international student, Amherst College, 1996 Charles W. Cole Scholarship for an undergraduate with an established financial aid need who stands highest in the academic rank of the sophomore class, Amherst College, 1994-96 The Economics Department Junior Class Prize, Amherst College, 1995 First Prize, Essay Competition on Finance and Banking in Russia During Economic Transition, Oxford University, 1995

Teaching Experience:

Teaching Assistant, International Finance (undergraduate), Yale University, 1999 Teaching Assistant, Intermediate Macroeconomics (undergraduate), Yale University, 1998

Research Experience:

Assistant to the Editors, Brookings Papers on Economic Activity, 1998-2000 Summer Intern, Office of the Chief Economist, European Bank for Reconstruction and Development, London, 1998

Papers:

"Nominal Debt and the Dynamics of Currency Crises," joint with Giancarlo Corsetti. "Monetary-Fiscal Interactions and (In)Stability of Exchange Rate Pegs." "Some VAR Evidence on the Effects of the World Economy on Emerging Markets."

Presentations:

Columbia University (student conference, 2001), University of Copenhagen (CEPR conference, 2001), Federal Reserve Bank of New York (joint with Giancarlo Corsetti, 1999), Princeton University (international economics seminar in 2001, student macroeconomics workshops, twice in 2001), Yale University (student macroeconomics workshops, 1999, twice in 2001)

Languages:

Polish, English, French

References:

Professor Christopher Sims Department of Economics Princeton University Princeton, NJ 08544-1021 Tel: (609) 258-4033 Fax: (609) 258-6419 E-mail: sims@princeton.edu Professor William Brainard Department of Economics Yale University Box 208268 New Haven, CT 06520-8268 Tel: (203) 432-3585 Fax: (203) 432-5779 E-mail: william.brainard@yale.edu Professor Giancarlo Corsetti Department of Economics Box 208268 Yale University New Haven, CT 06520-8268 Telephone: (203) 432-3562 Fax: (203) 432-5779 Email: corsetti@yale.edu Alternative address: Dipartimento di Economia Universita di Roma Tre Viale Ostense 139 00154 Roma, Italy Tel: (39-06) 5737 4056 Fax: (39-06) 737 4093

Dissertation Abstract:

Many currency crises occur at times of fiscal stress. The familiar model of how fiscal strain can produce a collapse of a fixed exchange rate — the first-generation model — seems an inadequate explanation of some of these episodes, for two reasons in particular: (1) A peg is abandoned in that model in order to allow expansion of the monetary base, generating necessary seigniorage revenues. However, one does not observe expansion of the monetary base in some episodes. (2) The model predicts chronic depreciation once floating begins, explaining the depreciation rate as a function of the required seigniorage revenues. However, some episodes are one-time, large devaluations with little or no subsequent, ongoing depreciation. The recent experience of Brazil is a case in point. One would like a theory that explains the size of those one-time devaluations. The first two essays in this dissertation develop a theory that solves both problems with a single idea. According to the theory, the cause of the devaluation is a fiscal policy switch, from a policy backing government debt fully with taxes to one using taxes and unanticipated inflation. The change in policy regime causes a one-time devaluation. Its size is determined by factors such as the magnitude of the fiscal imbalance, composition of public debt (how much of it is nominal, and how much indexed or foreign-currency), and expectations regarding post-devaluation monetary policy. This one-time devaluation is an important source of reduced fiscal tension, and there may be no need for seigniorage revenues in the new regime. The first essay, joint with Giancarlo Corsetti, focuses on currency denomination and maturity of government debt, the government’s willingness to tolerate high interest rates, and the possibility of coordination problems among holders of public debt. In the second essay, determinacy of equilibrium in a fixed exchange rate regime is shown to depend on the extent of the fiscal reform in response to a possible crisis: a policy that raises post-devaluation primary surpluses sufficiently in response to pre-devaluation interest rates guarantees uniqueness. This essay also explains how currency composition of public debt and expectations regarding post-devaluation monetary policy influence macroeconomic dynamics when the peg is still in place. Policy implications emerge regarding conditions for stability of a fixed exchange rate regime, fiscal reform, composition of government debt, post-devaluation interest rate policy, and defense of the peg by the monetary authority. The third essay compares in a single vector autoregressive framework the impact of fluctuations in the world economy on interest rates, prices, and output in ten emerging markets in Asia, Latin America, and Eastern Europe. External shocks are an important source of dynamics in all the variables and in all the countries, in many cases accounting jointly for half or three quarters of forecast error variance in emerging market variables. The extent of cross-border interactions does not seem to vary with cross-country differences such as exchange rate regime or capital account openness. That disturbances to the world economy account for about three quarters of long-term variance in prices both in countries with low and high variability of inflation seems difficult to reconcile with the notion that domestic policy shocks are the main source of inflation in emerging markets. Ongoing work attempts to identify effects of monetary policy shocks in developed economies on emerging markets.