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
How much inflation can fiscal policy create? Separating household heterogeneity and liquidity
[Previously: “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 household (micro) data, this is insufficient to pin down a key margin of non-equivalence. I show that both in analytically tractable and quantitative 2-asset HANK models, subtle assumptions on asset market structure give rise to disparate implications of fiscal policy: for inflation, model determinacy and fiscal self-financing. 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. This moderates the inflationary impact of public debt dynamics, but does not render it irrelevant. After large fiscal shocks, it can still generate persistently elevated ``last mile'' inflation.
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) Current draft - ECB Working Paper 2024/2953
Click for Abstract
Since the advent of Heterogeneous Agent New Keynesian (HANK) models, countercyclical unemployment risk has been deemed an important amplification channel for business cycles shocks. We revisit this issue in the context of a rich two-asset HANK framework with search and matching frictions, and we tackle the long-standing challenge of modeling wage bargaining in this class of models. We find the scope for deflationary ``unemployment fears'' spirals to be noticeable, but hinge on the absence of counteracting savings motives and the structure of the asset market. Additionally, we analyze alternative monetary responses to an adverse supply shock and find that their heterogeneous welfare effects depend importantly on the modeling of labor market heterogeneity. In our baseline, the middle class gains most if the central bank accommodates an employment recovery at the cost of higher inflation.
Presented at: European Winter Meeting of the Econometric Society (2025), Stockholm School of Economics, European Central Bank, Uppsala University, New York University
Solving Bewley Models with Bilateral Wage Bargaining
[Draft available upon request]
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.