Essays in Macroeconomics

Abstract

A central goal of macroeconomic policy is the stabilization of business cycle fluctuations. Stabilization policies, including monetary and fiscal policy, are implemented based on the paradigm that stable economic conditions are preferable to recurrent boom-bust cycles. This thesis contributes to our understanding of the effects and transmission mechanisms of macroeconomic stabilization policies, and how these depend on the decisions and interaction of heterogeneous firms. The first chapter investigates sovereign debt-based quantitative easing in the euro area and how its effects differ across countries. The second chapter studies the investment channel of conventional monetary policy in light of lumpy firm-level investment behavior. The third chapter explores how the strategic interaction of firms shapes aggregate fluctuations and the role of competition policy in macroeconomic stabilization.