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ESM research seminar: Myopic behaviour in macroeconomic models: Empirical evidence from the US with Marco Ratto



The ESM Research team is pleased to invite you to attend the hybrid seminar on:


Myopic behaviour in macroeconomic models: Empirical evidence from the US


Held by:

Marco Ratto

 (European Commission)


Co-authors: Stefan Hohberger, Adrian Ifrim & Beatrice Pataracchia


Wednesday, 6 March 11am to 12.30pm CET


Please let us know by Tuesday, 5 March COB If you will attend virtually or in person.


If you attend virtually, please join via Teams link below


If you attend in person, please send an email confirmation to   

The event will take place in our Conference area, make sure to come 15 minutes before the event allowing for a timely start!




Abstract: We investigate the empirical implications of myopic behaviour within an estimated medium-scale macroeconomic DSGE model. Our analysis provides a comprehensive and agnostic examination of the macroeconomic outcomes when households’ and firms’ beliefs deviate from rational expectations, as proposed by Gabaix

(2020). The estimation on US data proposes a strong preference towards cognitive discounting and suggests: (i) an improvement in overall model fit and forecasting performance, (ii) more stimulative fiscal policy, (iii) demand shocks resembling uncertainty shocks where consumption and investment co-move, and (iv) a diminished efficacy of monetary policy. Notably, our empirical results support the presence of rational price setters.


 Short Bio: Marco Ratto is senior scientist at the European Commission’s Joint Research Center in Ispra, Italy, where he leads the macroeconomic modelling team. He studied engineering at the University of Genoa and obtained his Ph.D in Engineering in 1998.

His research covers various aspects of macro-economic modelling and related methodological and computational tools, in particular on the estimation and simulation of medium/large scale DSGE models. His recent research activity focuses on macroeconomic nonlinearities, energy price dynamics, and the economic impact of the pandemic. His research also addressed issues like current account adjustments in EMU countries and in the global economy, business cycle heterogeneity within the EMU and between the euroarea and the US, cross-country and global spillovers and the use of DSGE models in forecasting. On the methodological side, he develops methods for simulation and estimation (linear and non-linear), parallel computation, sensitivity and identification analysis for DSGE models, and contributes to the DYNARE project.

He is coauthor of more than 40 papers in peer reviewed journals, in different fields of modelling (engineering, environmental and computer sciences, macro-economics). Most of the works in macro-economics can be access at his RePEc author profile.


Looking forward to seeing you!


ESM Research Team