Prof. W.J. den Haan (b. 1962) has been appointed professor of Macro-economics, in particular business cycle analysis, at the Faculty of Economics and Business of the Universiteit van Amsterdam (UvA). The chair is part of the Universiteit van Amsterdam School of Economics.
The key theme in Wouter den Haan’s research is the idea that to understand macroeconomic fluctuations one has to understand how transactions take place at the micro level. In particular, it is important to understand how agents find each other (and in particular what the search costs are and how long it takes), what agents know about each other (and in particular whether there are informational asymmetries), and what kind of contracts agents can write. The importance of these “frictions” for macroeconomics has been understood for quite some time but only recently do we have the computational tools to analyze macroeconomic models that are buildup from non-trivial micro foundations.
Denhaan has applied this theme both to labour and financial markets. His research has shown that a job-market matching model is very helpful in explaining the high unemployment rates in several European countries. In particular, his research makes clear that the Growth and Stability pact—by keeping tax rates high until the number of unemployment has actually dropped—may make it more difficult to move towards the better equilibrium of low unemployment rates.
His work on the role of frictions in financial markets has shown how initially small shocks can lead to large fluctuations because of the feedback effects between the destruction of relationships of lending institutions and their clients and the amount that investors want to provide to these lending institutions. His research on financial markets also looks at the effects that changes in the interest rate by the central bank has on the economy. His recent work shows both empirically and theoretically that frictions between banks and consumers may actually be more important for economic fluctuations than frictions between banks and firms.
Wouter J. den Haan obtained his PhD degree at Carnegie Mellon University in Pittsburgh in 1991. His dissertation won the Alexander Henderson Award for excellence in economics. He worked at the University of California (San Diego) from 1991 till 2003, and has been professor of Economics at London Business School since 2003. He is furthermore Research Fellow of the Centre for Economic Policy Research, editor of the Journal of Economic Dynamics and Control, and Associate Editor of the Journal of Money Credit and Banking. Den Haan received a Vici subsidy from the Netherlands Organisation for Scientific Research (NWO) in 2003 for the research project Agency Problems, Expectations and Macroeconomic Performance.