Genevieve Nelson is a DPhil candidate in Economics at the University of Oxford. Her doctoral work focuses on the development of the Dynamic Stochastic General Equilibrium (DSGE) set of macroeconomic models, with the aim to use these models to help policy makers develop effective monetary policy tools to respond to frictions in the financial system of banking, mortgage lending and debt securitisation, which have the potential to adversely affect the economy as a whole.
The analysis of financial frictions within DSGE models was neglected as an area warranting full research until the financial crisis of 2008 revealed the urgent need for new or alternative approaches in macroeconomics that could better restore and promote overall economic growth in the face of shocks from the financial systems. Since 2008, central banks have resorted to unconventional monetary policies, such as quantitative easing and other policy interventions, some of which Genevieve will be examining in her doctorate.
One of her projects will look at Canada’s Bank Act requirement for mortgage insurance in the case of low deposit mortgages and at the USA’s 2010 Dodd-Frank Act risk retention rule which requires banks to hold a certain percentage of any mortgages or mortgage-backed securities which they might issue. Genevieve will use DSGE models to produce a counterfactual that examines what would have happened if those interventions had been in place previously, or what could happen if such interventions are in place under a different set of circumstances.
Genevieve first became hooked on the logic of economic models during her undergraduate degree at the University of Edinburgh. Throughout the course of her MPhil and DPhil in Economics at Oxford, she has noted that the models have become a little less pretty and a bit messier. Genevieve is driven by the imperative to “not believe in the model” and believes that this messiness, the crisis’ effect of upending of economic research and thinking, and the dynamics of our current political environments have made this a uniquely challenging and exciting time to be a young economics scholar. Genevieve’s long term goal is to inform economic policy for the betterment of society through a career as a research economist in a central bank. To this end, Genevieve is looking forward to her upcoming three-month internship at the Bank of Canada in Ottawa during which time she will be working in the Model Development Division of the Canadian Economic Analysis Department.
Genevieve is thoroughly enjoying her time at Pembroke College in Oxford, where she participates on the College’s distinguished rowing team and in half marathons. Genevieve is grateful to have received the 2017 Royal Bank of Canada award from the CCSF, which has given her the flexibility to attend conferences and use helpful tool enhancements in support of her work.