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Steve Hinnefeld
University Communications

Last modified: Thursday, May 21, 2009

IU research center to co-sponsor conference on economic crisis

May 21, 2009

BLOOMINGTON, Ind. -- The Center for Applied Economics and Policy Research at Indiana University Bloomington will co-sponsor a conference this week in Princeton, N.J., aimed at bringing macroeconomic research to bear on policy issues.

Eric Leeper

Eric Leeper

The conference, "Monetary-Fiscal Policy Interactions, Expectations, and Dynamics in the Current Economic Crisis," will take place Friday and Saturday (May 22-23) in the Friend Center at Princeton University. Organizers are Eric Leeper, professor in the Department of Economics in the IU Bloomington College of Arts and Sciences; and Christopher Sims, the Harold H. Helm '20 professor of economics and banking at Princeton University.

"The conference aims to apply modern analyses of monetary and fiscal policy to the current economic crisis and create a forum in which researchers can communicate their findings to the policy-making community," Leeper and Sims say in a written description of the event.

The conference takes place as economies around the world are suffering through a downturn that has a good chance of becoming the worst recession since the Great Depression. Monetary and fiscal authorities have responded aggressively, with central banks slashing interest rates and taking other steps to improve liquidity and governments implementing substantial fiscal stimulus packages.

Missing from the policy discourse, however, has been any serious connection between the initiatives and modern macroeconomic research.

"Expectations and macroeconomic policy interactions are intricately linked and determine the eventual effects of policy actions," Leeper and Sims say. "But these aspects have received no explicit treatment in the policy initiatives to date. Neither have they been an important part of governments' communications to the public."

In response, leading economists from IU, Princeton and other institutions will present papers at the conference, targeted to policy makers and their advisers. News media are invited to attend.

Also sponsoring the conference are Princeton University's Woodrow Wilson School of Public and International Affairs and Center for Economic Policy Studies. More information, including a schedule of presentations and copies of papers, can be seen at