Academic Profiles

Research Interests

Professor Levine's general research area is in open economy macroeconomics with a particular focus on policy rules, international policy coordination and the credibility problem. Other research interests include the economics of immigration, defence economics and the economics of radio spectrum. He has numerous publications in leading economics journals including the Economic Journal, Economic Letters, the Journal of Economic Theory , the European Economic Review , the Journal of Economic Dynamics and Control , the Journal of Monetary Economics and Oxford Economic Papers. He is co-author with Professor David Currie of a book, Rules Reputation and Macroeconomic Policy Co-ordination (CUP). Other activities include: consultancy for Ofcom, visiting researcher at the IMF and the ECB, and visiting Professor at Autỏnoma University, Barcelona.

Keynote Lectures

"The Credibility Problem Revisited: Thirty Years on from Kydland and Prescott", 2006, (with J. Pearlman and B. Yang). 

Keynote Lecture given at the European Economics and Finance Society 2006 Conference in Heraklion, Crete, June 2006

Contact Me

E-mail:
Phone: 01483 68 9928

Find me on campus
Room: 15 AD 00


My office hours

Wednesday 12:00 noon - 1:00 pm or by appointment


RePEc web page: download papers

Publications

Journal articles

  • Levine P, Yang B, Pearlman J, Perendia G. (2012) 'Endogenous Persistence in an estimated DSGE Model Under Imperfect Information'. Economic Journal, 122 (565), pp. 1287-1312.
  • Cantore C, Levine P, Melina G, Yang B. (2012) 'A fiscal stimulus with deep habits and optimal monetary policy'. Economics Letters, 117 (1), pp. 348-353.

    Abstract

    A New-Keynesian model with deep habits and optimal monetary policy delivers a larger-than-1 fiscal multiplier and consumption crowding in. Optimized Taylor-type rules dominate a conventional Taylor rule. Consumption is crowded out if the Taylor rule is suboptimal or if commitment is absent. © 2012 Elsevier B.V.

  • Cantore C, Levine P, Melina G, Yang B. (2012) 'A Fiscal Stimulus with Deep Habits and Optimal Monetary Policy'. Article number 0512
  • Choudhary MA, Levine P, Mcadam P, Welz P. (2012) 'The happiness puzzle: Analytical aspects of the Easterlin paradox'. Oxford Economic Papers, 64 (1), pp. 27-42.
  • Levine P, Pearlman J, Perendia G, Yang B. (2012) 'Endogenous Persistence in an estimated DSGE Model Under Imperfect Information'. Economic Journal,
  • Levine P. (2012) 'Monetary policy in an uncertain world: Probability models and the design of robust monetary rules'. Indian Growth and Development Review, 5 (1), pp. 70-88.
  • Levine P, McAdam P, Pearlman J. (2012) 'Probability models and robust policy rules'. European Economic Review, 56 (2), pp. 246-262.
  • Cantore C, Levine P. (2012) 'Getting Normalization Right: Dealing with 'Dimensional Constants' in Macroeconomics'. 36 Edition. Journal of Economic Dynamics and Control, , pp. 1931-1949.
  • Harris MN, Levine P, Spencer C. (2011) 'A decade of dissent: Explaining the dissent voting behavior of Bank of England MPC members'. Public Choice, 146 (3), pp. 413-442.
  • Levine P, McAdam P, Pearlman J. (2011) 'Probability models and robust policy rules'. European Economic Review,
  • Levine P, Pearlman J. (2010) 'Robust monetary rules under unstructured model uncertainty'. ELSEVIER SCIENCE BV JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 34 (3), pp. 456-471.
  • Harris MN, Levine P, Spencer C. (2010) 'A decade of dissent: explaining the dissent voting behavior of Bank of England MPC members'. Public Choice, , pp. 1-30.
  • Kim Y-B, Levine P, Lotti E. (2010) 'Migration, skill composition and growth'. National Institute Economic Review, 213 (1), pp. R5-R19.
  • Levine P, Lotti E, Pierse R, Pearlman J. (2010) 'Growth and welfare effects of world migration'. Scottish Journal of Political Economy, 57 (5), pp. 615-643.
  • Coto-Martinez J, Garcia-Alonso MDC, Levine P. (2009) 'TASTE FOR VARIETY AND OPTIMUM PRODUCT DIVERSITY IN AN OPEN ECONOMY'. WILEY-BLACKWELL PUBLISHING, INC BULLETIN OF ECONOMIC RESEARCH, 61 (2), pp. 127-138.
  • Gabriel VJ, Levine P, Spencer C. (2009) 'How forward-looking is the Fed? Direct estimates from a 'Calvo-type' rule'. Economics Letters, 104 (2), pp. 92-95.

    Abstract

    We estimate an alternative type of monetary policy rule according to which the central bank targets a discounted infinite sum of expected inflation and output gaps. Empirical results suggest that the Fed has a mean forward horizon of 4 to 8 quarters. © 2009 Elsevier B.V. All rights reserved.

  • Choudhary MA, Levine P. (2009) 'Risk-averse firms and employment dynamics'. Oxford Economic Papers, 62 (3), pp. 578-602.
  • Levine P, McAdam P, Pearlman J. (2008) 'Quantifying and sustaining welfare gains from monetary commitment'. ELSEVIER SCIENCE BV JOURNAL OF MONETARY ECONOMICS, 55 (7), pp. 1253-1276.
  • Levine P, Pearlman J, Pierse R. (2008) 'Linear-quadratic approximation, external habit and targeting rules'. ELSEVIER SCIENCE BV JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 32 (10), pp. 3315-3349.
  • Garcia-Alonso MDC, Levine P. (2008) 'Strategic procurement, openness and market structure'. ELSEVIER SCIENCE BV INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION, 26 (5), pp. 1180-1190.
  • Levine P, Mandilaras A, Wang J. (2008) 'Public debt maturity and currency crises'. BLACKWELL PUBLISHING SCOT J POLIT ECON, 55 (1), pp. 79-106.
  • Evans J, Levine P, Trillas F. (2008) 'Lobbies, delegation and the under-investment problem in regulation'. ELSEVIER SCIENCE BV INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION, 26 (1), pp. 17-40.
  • Levine P, Pearlman J, Yang B. (2008) 'The credibility problem revisited: Thirty years on from Kydland and Prescott'. Review of International Economics, 16 (4), pp. 728-746.
  • Levine P, McAdam P, Pearlman J. (2007) 'Inflation-Forecast-Based Rules and Indeterminacy: A Puzzle and a Resolution'. International Journal of Central Banking, 3 (4), pp. 77-110.
  • Drinkwater S, Levine P, Lotti E, Pearlman J. (2007) 'The immigration surplus revisited in a general equilibrium model with endogenous growth'. WILEY-BLACKWELL JOURNAL OF REGIONAL SCIENCE, 47 (3), pp. 569-601.
  • Hawdon D, Hunt LC, Levine P, Rickman N. (2007) 'Optimal sliding scale regulation: an application to regional electricity distribution in England and Wales'. OXFORD UNIV PRESS OXFORD ECONOMIC PAPERS-NEW SERIES, 59 (3), pp. 458-485.
  • Evans J, Goulas E, Levine P. (2007) 'Military expenditure and migration in Europe'. TAYLOR & FRANCIS LTD DEFENCE AND PEACE ECONOMICS, 18 (4), pp. 305-316.
  • García-Alonso MDC, Levine P. (2007) 'Chapter 29 Arms Trade and Arms Races: A Strategic Analysis'. Handbook of Defense Economics, 2, pp. 941-971.
  • Grandblaise D, Kloeck C, Renk T, Bag P, Levine P, Moessner K, Yang J, Pan M, Zhang K. (2007) 'Microeconomics inspired mechanisms to manage dynamic spectrum allocation'. 2007 2nd IEEE International Symposium on New Frontiers in Dynamic Spectrum Access Networks, , pp. 452-461.
  • Dunne JP, Garcia-Alonso MDC, Levine P, Smith RP. (2006) 'Managing asymmetric conflict'. OXFORD UNIV PRESS OXFORD ECONOMIC PAPERS-NEW SERIES, 58 (2), pp. 183-208.
  • Choudhary MA, Levine P. (2006) 'Idle worship'. ELSEVIER SCIENCE SA ECONOMICS LETTERS, 90 (1), pp. 77-83.
  • Spencer C, Levine P, Bag P. (2006) 'A note on: jury size and the free rider problem'. Economics Bulletin, 4 (3), pp. 1-12.
  • Levine P. (1999) 'The welfare economics of immigration control'. 12 (1), pp. 23-43.

Conference papers

  • Levine PL, Cantore C, Melina G, Pearlman J. (2012) 'Fiscal Stimuli and Consolidations'. Bank of Greece: European Monetary Forum
  • Levine PL, Cantore C, Melina, G. . (2012) 'A Fiscal Stimulus and Jibless Recovery'. Cambridge University: RES Annual Conference
  • Dunne P, Del Carmen Garcia-Alonso M, Levine P, Smith R. (2007) 'Determining the defence industrial base'. TAYLOR & FRANCIS LTD DEFENCE AND PEACE ECONOMICS, Univ W England, Bristol, ENGLAND: 7th Annual Conference on Economics and Security 18 (3), pp. 199-221.
  • Batini N, Justiniano A, Levine P, Pearlman J. (2006) 'Robust inflation-forecast-based rules to shield against indeterminacy'. ELSEVIER SCIENCE BV JOURNAL OF ECONOMIC DYNAMICS & CONTROL, Amsterdam, NETHERLANDS: 10th International Conference on Computing in Economics and Finance 30 (9-10), pp. 1491-1526.

Reports

  • Cristiano Cantore\ , Paul Levine\ , Giovanni Melina\ . (2013) A Fiscal Stimulus and Jobless Recovery. International Monetary Fund\

    Abstract

    We analyse the effects of a government spending expansion in a DSGE model with Mortensen-Pissarides labour market frictions, deep habits in private and public consumption, investment adjustment costs, a constant-elasticity-of-substitution (CES) production function, and adjustments in employment both at the intensive as well as the extensive margin. The combination of deep habits and CES technology is crucial. The presence of deep habits magnifies the responses of macroeconomic variables to a fiscal stimulus, while an elasticity of substitution between capital and labour in the range of available estimates allows the model to produce a scenario compatible with the observed jobless recovery.\

  • Cantore C. (2011) Getting Normalization Right: Dealing with ‘Dimensional Constants’ in Macroeconomics. Dynare WP series :

    Abstract

    We contribute to a recent literature on the normalization, calibration and estimation of CES production functions. The problem arises because CES ‘share’ parameters are not in fact shares, but depend on underlying dimensions - they are ‘dimensional constants’ in other words. It follows that such parameters cannot be calibrated, nor estimated unless the choice of units is made explicit. We use an RBC model to demonstrate two equivalent solutions. The standard one expresses the production function in deviation form about some reference point, usually the steady state of the model. Our alternative, ‘re-parametrization’, expresses dimensional constants in terms of a new dimensionless (share) parameter and all remaining dimensionless ones. We show that our ‘re-parametrization’ method is equivalent and arguably more straightforward than the standard normalization in deviation form. We then examine a similar problem of dimensional constants for CES utility functions in a two-sector model and in a small open economy model; then re-parametrization is the only solution to the problem, showing that our approach is in fact more general.

  • Alptekin A, Levine P. (2009) Military Expenditure and Economic Growth Literature: A Meta-Analysis. Article number 0209

    Abstract

    [eng] Transportation costs and monopoly location in presence of regional disparities. . This article aims at analysing the impact of the level of transportation costs on the location choice of a monopolist. We consider two asymmetric regions. The heterogeneity of space lies in both regional incomes and population sizes: the first region is endowed with wide income spreads allocated among few consumers whereas the second one is highly populated however not as wealthy. Among the results, we show that a low transportation costs induces the firm to exploit size effects through locating in the most populated region. Moreover, a small transport cost decrease may induce a net welfare loss, thus allowing for regional development policies which do not rely on inter-regional transportation infrastructures. cost decrease may induce a net welfare loss, thus allowing for regional development policies which do not rely on inter-regional transportation infrastructures. [fre] Cet article d�veloppe une statique comparative de l’impact de diff�rents sc�narios d’investissement (projet d’infrastructure conduisant � une baisse mod�r�e ou � une forte baisse du co�t de transport inter-r�gional) sur le choix de localisation d’une entreprise en situation de monopole, au sein d’un espace int�gr� compos� de deux r�gions aux populations et revenus h�t�rog�nes. La premi�re r�gion, faiblement peupl�e, pr�sente de fortes disparit�s de revenus, tandis que la seconde, plus homog�ne en termes de revenu, repr�sente un march� potentiel plus �tendu. On montre que l’h�t�rog�n�it� des revenus constitue la force dominante du mod�le lorsque le sc�nario d’investissement privil�gi� par les politiques publiques conduit � des gains substantiels du point de vue du co�t de transport entre les deux r�gions. L’effet de richesse, lorsqu’il est associ� � une forte disparit� des revenus, n’incite pas l’entreprise � exploiter son pouvoir de march� au d�triment de la r�gion l

  • Alptekin A, Levine P. (2009) Conflict, Growth and Welfare: Can Increasing Property Rights Really be Counterproductive?. Article number 0109

    Abstract

    Gonzalez (2007), JET, 137(1), 127-139, sets out a growth model with con- flict in which households allocate their resources across consumption, and investment in both productive and unproductive capital. A striking result is obtained: there are circumstances where increasing property rights in society can actually reduce social welfare and hence incremental changes are not nec- essarily in peoples’ interests. This note reassesses this claim in a generalized form of his model with a CRRA utility function (with a risk aversion param- eter, sigma > 1 rather than his logarithmic form) and we assume a less than full depreciation of capital. Both these generalizations prove to be critical ones that significantly change the result.

Scholarly editions

  • Levine P, Pearlman J. (2011) Monetary and Fiscal Policy in a DSGE Model of India..
  • Batini N, Levine P, Lotti E, Yang B. (2011) Monetary and Fiscal Policy in the Presence of Informal Labour Markets.
  • Evans J, Levine P, Rickman N, Trillas F. (2011) Delegation to Independent Regulators and the Ratchet Effect.
  • Batini N, Levine P, Lotti E, Yang B. (2011) Informality, Frictions and Monetary Policy.
  • Cantore C, Levine P. (2011) Getting Normalization Right: Dealing with ‘Dimensional Constants’ in Macroeconomics.
  • Batini N, Levine P, Lotti E. (2011) The Costs and Benefits of Informality.
  • Gabriel V, Levine P, Pearlman J, Yang B. (2010) An Estimated DSGE Model of the Indian Economy..
  • Levine P. (2010) Monetary Policy in an Uncertain World: Probability Models and the Design of Robust Monetary Rules.
  • Kim Y-B, Levine P, Lotti E. (2010) Migration, Skill Composition and Growth.
  • Batini N, Gabriel V, Levine P. (2010) A Floating versus managed exchange rate regime in a DSGE model of India..
  • Batini N, Kim Y-B, Levine P, Lotti E. (2010) Informal Labour and Credit Markets: A Survey..
  • Batini N, Gabriel V, Levine P, Pearlman J. (2010) A Floating versus Managed Exchange Rate Regime in a DSGE Model of India.
  • Gabriel V, Levine P, Spencer C, Yang B. (2008) On the (ir)relevance of direct supply-side effects of monetary policy.
  • Levine P, McAdam P, Pearlman JG, Pierse R. (2008) Risk Management in Action. Robust monetary policy rules under structured uncertainty..
  • Batini N, Levine P, Pearlman J. (2008) Optimal Exchange Rate Stabilization in a Dollarized Economy with Inflation Targets.
  • Levine P, Pearlman J, Welz P. (2008) Robust Inflation-Targeting Rules and the Gains from International Policy Coordination.
  • Levine P, Pearlman J, Perendia G. (2007) Estimating DSGE Models under Partial Information.
  • Levine P, Lotti E, Pearlman J, Pierse R. (2007) Growth and Welfare Effects of East-West European Migration.
  • Lambertini L, Levine P, Pearlman J. (2007) Fiscal Policy in a Monetary Union: Can Fiscal Cooperation be Counterproductive?.
  • Levine P, Rickman N. (2007) Optimal Administered Incentive Pricing of Spectrum.
  • Levine P, Pearlman J, Pierse R. (2007) Monetary Policy Coordination Revisited in a Two-Bloc DSGE Model.
  • Bag P, Levine P, Rickman N. (2007) Anglo-Dutch, Split-Award Spectrum Auctions with a Downstream Market.
  • Levine P, Rickman N. (2007) Channel Trading and Imperfect Competition: Good Trades and Bad Trades.
  • Levine P. (2007) Robust monetary rules under unstructured and structured model uncertainty.
  • Levine P, Moesner K, Rickman N. (2007) Spectrum Property Rights Versus a Commons Model: Exploitation of Mesh Networks.
  • Batini N, Levine P, Pearlman J. (2007) Monetary Rules in Emerging Economies with Financial Market Imperfections.
  • Levine P, McAdam P, Pearlman JG. (2007) Inflation forecast-based-rules and indeterminacy: a puzzle and a resolution.
  • Drinkwater S, Levine P, Lotti E. (2006) Labour Market and Investment Effects of Remittances.
  • Levine P, Pearlman J, Pierse R. (2006) Linear-Quadratic Approximation, Efficiency and Target-Implementability.
  • Batini N, Pearlman J, Levine P. (2006) Optimal Exchange Rate Stabilization in a Dollarized Economy with Inflation Targets.
  • Levine P, McAdam P, Pearlman J. (2006) Welfare Gains from Monetary Commitment in a Model of the Euro-Area.
  • al-Nowaihi A, Levine P, Mandilaras A. (2006) Central Bank Independence and the `Free Lunch Puzzle': A New Perspective.
  • Levine P, Rickman N, Trillas F. (2006) Price Regulation and the Commitment Problem: Can Limited Capture be Beneficial?.
  • Levine P, Martins L, Gabriel V. (2006) Robust Estimates of the New Keynesian Phillips Curve.
  • Bag P, Levine P, Spencer C. (2005) A Note on: Jury Size and the Free Rider Problem.
  • Choudhary A, Levine P. (2004) Can Risk Aversion in Firms Reduce Unemployment Persistence?.
  • Batini N, Levine P, Pearlman J. (2004) Indeterminacy with Inflation-Forecast-Based Rules in a Two-Bloc Model.
  • Levine P, Rickman N. (2003) Price Regulation, Investment and the Commitment Problem.
  • Choudhary A, Levine P. (2003) Self-Stabilizing Firms and Unemployment Persistence.
  • Levine P, Levine P, Stern J, Trillas F. (2003) Independent Utility Regulators: Lessons from Monetary Policy.
  • Drinkwater S, Levine P, Lotti E, Pearlman J. (2003) The Economic Impact of Migration: A Survey.
  • Dunne JP, Garcia Alonso M, Levine P, Smith R. (2003) Concentration in the International Arms Industry¤.
  • Tzavara D, Levine P, Rickman N. (2002) Market entry and roll-out with product differentiation.
  • Leese R, Levine P, Rickman N. (2002) The Economic Effects of Spectrum Trading.
  • Krichel T, Levine P. (1997) Dynamic Aspect of Growth and Fiscal Policy.

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