School of Economics

ESRC large grant

Researchers at the University of Edinburgh begin a new study of the Credit and Labour Market Foundations of the Macroeconomy.

ESRC Large Grant on the Credit and Labour Market Foundations of the Macroeconomy


Start Date: 1st June 2015

Duration: 5 Years

Total Value of the Award: £5.93 million

Project website

ESRC image
Professors Mike Elsby, John Hardman Moore and Jonathan Thomas

The School of Economics is pleased to announce an award from the Economic and Social Research Council of a Large Grant over five years to study the Credit and Labour Market Foundations of the Macroeconomy. The award will begin in June 2015.

The research, led by Professor John Hardman Moore, Professor Mike Elsby and Professor Jonathan Thomas, will bring together researchers from Edinburgh, Europe and the United States. The aim is to re-examine the foundations of macroeconomics, and in particular of credit and labour markets.

Professor John Hardman Moore

Professor Mike Elsby

Professor Jonathan Thomas

Other investigators on the project include:

Professor Michele Belot (University of Edinburgh)

Professor Pieter Gautier (VU University Amsterdam)

Professor Maia Güell (University of Edinburgh)

Professor John Hassler (Stockholm University)

Professor Philipp Kircher (University of Edinburgh)

Professor Nobuhiro Kiyotaki (Princeton University)

Professor Iourii Manovskii (University of Pennsylvania)

Professor Ryan Michaels (University of Rochester)

Professor David Miles (Bank of England Monetary Policy Committee)

Professor Jose V Rodriguez Mora (University of Edinburgh)

Professor Matthew Shapiro (University of Michigan)

Professor Gary Solon (Michigan State University)

Professor Andy Snell (University of Edinburgh)

Dr Ludo Visschers (University of Edinburgh)

Professor Tim Worrall (University of Edinburgh)


Professor Hardman Moore says:

“We are striving to answer the big question: how do financial and labour markets interact, and how does that interaction affect the macroeconomy? We are not the first to ask this: economists have been wrestling with it since John Maynard Keynes in the Great Depression of the 1930s.

The recent financial crisis has served to underline the question, and in many ways to embarrass the economics profession about the poverty of our understanding of how the macroeconomy works. It is revealing that people such as Sir Charles Bean at the Bank of England said that they had to fall back on Keynes’s original framework to make sense of what happened in the crisis.

The award is the culmination of a long strategy that we have been pursuing in the School of Economics. Since 2000 the University of Edinburgh has recruited academic staff who work at the interface of micro and macroeconomics, both theorists and applied economists. The key markets are labour and finance - that’s where things seem most obviously to go awry - and many of our new faculty have expertise in those areas.

A crucial element to the success of this project will be the contribution of our outstanding international collaborators from Europe and the US. They will spend considerable periods of time with us (and importantly with each other) in Edinburgh.

This ESRC award will enable a group of scholars who share common goals and understand each others' methods to address a fundamental economic question. It is going to take at least five years to find answers. This is ambitious, high risk research. We will learn much in trying. If we succeed, then we might have contributed to the reconstruction of macroeconomics."

  • There will be a programme of conferences, workshops, seminars and policy forums.
  • The international collaborators will lead master classes.
  • Six PhD studentships will be offered.

Details will be announced in due course.

The Economic and Social Research Council (ESRC) is the UK's largest organisation for funding research on economic and social issues. It is a non-departmental public body (NDPB) established by Royal Charter in 1965 and receives most of its funding through the Department for Business, Innovation and Skills (BIS). It supports independent, high quality research which has an impact on business, the public sector and the third sector. Its total budget for 2014/15 is £213 million. At any one time the ESRC supports over 4,000 researchers and postgraduate students in academic institutions and independent research institutes.