Lawrence J. Christiano

Overview

Lawrence J. Christiano is a macroeconomist at Northwestern University (Department of Economics) and a Research Associate at NBER. His work spans DSGE modeling, monetary policy transmission, and structural VAR identification. Best known (with Eichenbaum and Evans) for establishing the recursive identification framework for monetary policy shocks and the CEE DSGE model with nominal rigidities.

Key Contributions

• Recursive identification of monetary policy shocks (CEE 1999): Establishes the recursiveness assumption and benchmarks identification via Cholesky on $Z_t = (X_t, S_t, X_{2t})$; proves the identification invariance result; synthesizes FF, NBR, and NBR/TR schemes; documents price puzzle and liquidity effect. See Monetary Policy Shocks.
• NBR identification (CEE 1992): Proposed non-borrowed reserves as the policy instrument; first systematic VAR documentation of the liquidity effect.
• CEE DSGE model (CEE 2005): Nominal and real rigidities (Calvo pricing, wage rigidity, variable capital utilization) calibrated to match benchmark VAR impulse responses.

Related

• Monetary Policy Shocks
• Structural Identification
• Martin Eichenbaum
• Charles L. Evans