About Me
Welcome! My name is Matthias Hänsel and I am a macroeconomist working at Aarhus University, Denmark.
My field of research is Macroeconomics with a particular focus on household heterogeneity, monetary & fiscal policy, labor markets and numerical methods. I obtained my PhD from the Stockholm School of Economics in 2025.
You can find my CV here and more information about my research below.
Current Research
Idiosyncratic Risk, Government Debt and Inflation
Current draft - JMP version - Older versions (ArXiv)
Click for Abstract
Recent Heterogeneous Agent New Keynesian (HANK) models provide for rich monetary-fiscal interactions due to their lack of Ricardian equivalence. Yet, while related frameworks are usually motivated and calibrated relating to micro-level evidence, this is insufficient to pin down a key margin of non-equivalence. I demonstrate this in a state-of-the-art 2-asset HANK model, in which subtle assumptions on asset market structure give rise to disparate effects of fiscal expansions on interest rates and inflation. This is because household heterogeneity by itself influences but doesn't pin down the liquidity value of public debt. To overcome this issue, I propose a simple model extension and discipline it using relevant macro-level evidence regarding the relationship between public debt and treasury returns. In a subsequent application to the post-2020 US, the model suggests that public debt's liquidity value played a modest role in producing the inflation peak in 2022, but is important for inflation remaining elevated thereafter.
Presented at: Stockholm School of Economics (2023, 2024), SHoF National PhD Workshop in Finance (2023), RGS Doctoral Conference (2024), Riksbank PhD Workshop in Money and Finance (2024), University of Mannheim, Midwest Macroeconomics Meeting (Spring 2024), ENTER Jamboree (2024), North American Summer Meeting of the Econometric Society (2024), Vigo Workshop on Dynamic Macroeconomics (2024), EEA-ESEM Congress (2024), VfS Annual Meeting (2024)
HANK faces Unemployment
(joint with Agostino Consolo) ECB Working Paper 2024/2953 - [New version coming soon]
Click for Abstract
Since the advent of Heterogeneous Agent New Keynesian (HANK) models, countercyclical unemployment risk has been deemed an important amplification mechanism for business cycles shocks. Yet, the aggregate effects of such “unemployment fears” are hard to pin down: We thus revisit this issue in the context of a rich two-asset HANK model proposing new ways to isolate their general equilibrium effects and tackle the long-standing challenge of modelling wage bargaining in this class of model. While unemployment fears can exert noticeable aggregate effects, we find their magnitude to depend importantly on the distribution of firm profits. Households’ ability to borrow stabilizes the economy. Our framework has also implications for policy: In the aftermath of an adverse energy price shock, fiscal policy can help reduce the hysteresis effects on unemployment and most households gain if the central bank accommodates an employment recovery at the cost of higher inflation.
Presented at: Stockholm School of Economics, European Central Bank, Uppsala University, New York University
Solving Bewley Models with Bilateral Wage Bargaining
Click for Abstract
Search-and-Matching models with incomplete markets a la Bewley appear challenging to solve, as standard wage bargaining protocols imply workers' wages to depend on their wealth. In fact, I demonstrate that they can be analyzed quickly by building on the Endogenous Grid Method (EGM), particularly if one uses a novel Match-Integrated Endogenous Grid Method (MIEGM): Its key feature is that it obtains worker- and firm value functions jointly instead of solving an outer functional fixed point problem. I show that this fast algorithm can be applied to a variety of models, including set-ups with endogenous separations or intensive margin labor supply. Additionally, the joint solution procedure facilitates studying aggregate shocks and transition dynamics using recent Sequence Space methods.
Presented at: Fed St. Louis-JEDC-SCG-SNB-Conference on Heterogeneity and Macroeconomics of Labor Markets (Poster Session)
Work in Progress
Automation when Skills Are bundled
(joint with Sofia Hernnäs)
New, improved version of Hernnäs (2023)
Mortgage relief programs as stabilization tools
(joint with Märta Almgren and Nils Landén Mammos)
Publications
Monetary Policy Transmission, Central Bank Digital Currency, and Bank Market Power
(joint with Hanfeng Chen and Hiep Nguyen)
Jahrbücher für Nationalökonomie und Statistik (Journal of Economics and Statistics), 245, no. 4-5 (Special Issue on CBDC), 527-576. Published Version (Open Access)
Click for Abstract
Interest rates on new central bank digital currencies (CBDCs) can be expected to enter the monetary policy toolkit soon. Using an extended Sidrauski (1967) model featuring an oligopsonistic banking sector, we study the complex transmission of interest rates on CBDC, which generally involve both direct and indirect effects. This is because a CBDC rate cut does not only affect the rate on the CBDC itself, but also induces the non-competitive deposit providers to adjust their spreads, as the new substitute for their products becomes relatively less attractive. A calibration exercise suggests that the indirect effects depend strongly on the sources of deposit market power: If driven by high concentration, they substantially amplify the aggregate effects of the CBDC policy rate, both in response to transitory shocks as well as regarding its long-run welfare effects. This contrasts them with policies directed at the banking sector which are weakened by a less competitive deposit market.
Solving the Diamond-Mortensen-Pissarides model: A hybrid perturbation approach
Economics Letters 236 (2024), 111624 Published Version (Open Access)
Click for Abstract
Projection methods are deemed necessary to accurately solve various variants of the Diamond-Mortensen-Pissarides model used in business cycle research. This paper argues that hybrid perturbation, once combined with a non-linear change of variable, can provide an alternative, producing accurate solutions while retaining most of the simplicity of standard perturbation: Applying the method to the Hagedorn and Manovskii (2008) model, it delivers high accuracy and nearly identical business cycle moments as recent projection approaches.
Coding
I occasionally write code notebooks demonstrating numerical methods. Currently, the following is available:
- A Notebook demonstrating the Sequence Space method by Auclert et al. (2021) in Julia.
- A Notebook solving a more involved model using different variants of the Auclert et al. (2021) method.
- A Notebook demonstrating the Repeated Transition Method (RTM) by Lee (2025) in Julia.