Mathias' thesis contains three self-contained, single-authored essays on topical issues in Macroeconomics and Political Economy.

In the first essay, Mathias addresses the debate on whether or not the Swedish central bank, the Riksbank, reacted to house prices in the first two decades following the introduction of the inflation target. He uses Bayesian Methods to estimate DSGE models with and without restrictions, and finds that, during the period 1993-2013, house price developments did influence the monetary policy of the Riksbank.

In the second paper, Mathias speaks to the burgeoning literature on rising wealth inequality. His main contribution to the field is to assess to what extent a model with heterogeneous preferences can replicate key features of actual data. When allowing for heterogeneity in both impatience and risk aversion, his theoretical model is able to generate a wealth distribution with key characteristics similar to those of the actual US wealth distribution.

Mathias’ third essay is an empirical paper on foreign aid and political budget cycles. The paper is a contribution to the literature on the efficacy of foreign aid in addressing the potential behaviour of receiving governments. His main finding is that foreign aid tends to amplify political budget cycles, meaning that governments receiving aid tend to run larger deficits in election years.

We would like to thank Jesper Lindé for an excellent and engaging discussion.

We would also like to express our sincerest congratulations to Mathias on his PhD and wish him all the best in his future endeavours!