Lukas Nord

Lukas Nord

PhD Candidate in Economics

European University Institute

Welcome to my website!

I am a PhD Candidate in Economics at the EUI in Florence, where my thesis advisors are Árpád Ábrahám and Russell Cooper.

My Research Interests cover Macroeconomics with Household Heterogeneity.


Working Papers

Distributive Effects of Banking Sector Losses

     with Caterina Mendicino and Marcel Peruffo

This paper studies the distributive effects of banking sector losses on household consumption and welfare. Using data from the Consumer Expenditure Survey, we document that in response to declines in bank equity returns the consumption of low-income households decreases by roughly twice as much as the average. To understand this result, we develop a heterogeneous-agent model featuring rich income and portfolio heterogeneity and a banking sector subject to financial frictions. The model matches the empirical inequality in consumption responses following a shock to banks’ asset returns. Households at the bottom of the income distribution suffer from losses in labor earnings and from an increase in the cost of borrowing. In contrast, high-income consumers can take advantage of temporarily low asset prices and high future returns and increase their savings to sustain a higher consumption in the medium term. In fact, a fraction of households benefits from distress in the banking sector. A debt-financed asset purchase program can improve welfare, especially for low-income individuals, by dampening the increase in credit spreads and stabilizing investment.

Joint Search over the Life Cycle

     with Annika Bacher and Philipp Grübener

This paper studies how the added worker effect - intra-household insurance through increased spousal labor market participation - varies over the life cycle. We show in U.S. data that the added worker effect is much stronger for young than for old households. A stochastic life cycle model of two-member households with job search in a frictional labor market is capable of replicating this finding. The model suggests that a lower added worker effect for the old is driven primarily by better insurance through asset holdings. Human capital differences between employed young and old contribute to the difference but are quantitatively less important, while differences in job arrival rates play a limited role.

Who cares about Inflation? -
    Endogenous Expectation Formation of Heterogeneous Households


This paper studies the effect of wealth levels on households' inflation expectations. Using data from the DNB Household Survey, we show absolute forecast errors as well as the dispersion of expectations across households to be decreasing in assets and debt. These patterns can be rationalized in a consumption-savings model with endogenous expectation formation, where households can exert effort to reduce uncertainty about future price changes. The implied consumption response to news about inflation is hump shaped in wealth: Wealthier households pay closer attention and update their expectations more in response to a signal received, but change their consumption less after any given update in expectations due to the income effect of future inflation. In a quantitative exercise, we show this mechanism to reduce the on-impact aggregate consumption response to forward guidance policies up to 55% compared to an attentive counterfactual.

Work in Progress

    The Expenditure Margin, Relative Prices and Inequality