Max Brès

As people age, their preferences become less elastic and the opportunity cost of time drops after retirement, influencing purchasing behaviour. Hence, demographic changes affect competition by altering the age composition of consumers, carrying substantial macroeconomic implications. We identify this demand-side channel of demographic changes using unexpected shifts in the age composition of foreign consumers. We find that middle-aged consumers reduce competition with respect to younger and older consumers, resulting in lower production and higher prices. In a multi-sector general equilibrium search model we show that young consumers enhance between-varieties competition and old consumers enhance within-varieties competition. Conversely, middle-aged consumers reduce competition on both margins, shifting demand to less productive firms, thus raising average prices and slowing economic growth. In the United States, changes in the age composition of consumers led to an 8.7% reduction GDP growth from 1995-2004 and a 10.3% increase from 2005-2019 as baby-boomers aged.

This paper provides causal evidence on the labor-market effects of reallocating firm subsidies across sectors within local economies. We exploit a change in the geographical coverage of France's Aides à Finalité Régionale (AFR) zoning that altered which commuting zones qualified for a more permissive subsidy regime. This eligibility change induced a reallocation of subsidies away from research-intensive and high-skilled service activities toward manufacturing and low-skilled services, while leaving the overall subsidy envelope received by each area essentially unchanged. We show that this sectoral reallocation leads to persistent increases in local employment and hours over the long run, without adverse effects on aggregate value added. The employment gains are driven by increased firm entry, particularly in manufacturing, rather than by reduced exit. At the worker level, average earnings decline in repeated cross-sections due to lower hours per worker, while workers already present in treated areas experience sustained earnings gains. Overall, our results highlight sectoral targeting rather than subsidy levels as a central mechanism through which place-based policies shape local labor-market outcomes.

Aggregate impulse responses to repeated shocks vary over time when the underlying cross-section of agents shifts. We develop a micro-to-macro procedure that estimates these time-varying responses by first learning heterogeneous micro elasticities with a generalized random forest, then aggregating predicted responses with predetermined economic weights. Applied to the transmission of monetary policy to producer prices using Swedish micro data, the aggregate price response strengthens markedly during the 2022–23 tightening cycle, driven primarily by changes in the financial and real position of incumbent firms. We further document an aggregation bias affecting standard macro local projections on log indices: linked to Jensen's inequality, this bias is typically small but becomes material when the cross-sectional dispersion of responses widens following large shocks, as in 2023.

This paper examines how banks transmit monetary policy shocks across sectors by leveraging the heterogeneous exposure of Swedish banks to heightened Commercial Real Estate (CRE) default risk during the 2022–2023 monetary policy tightening. Banks facing greater CRE exposure responded to rate hikes by rationing loan issuance, shortening interest fixation periods, and substituting more expensive credit lines for term loans. These actions increased financing costs for non-CRE firms and raised their probability of bankruptcy. By contrast, CRE borrowers experienced relatively modest changes in lending terms, indicating that their elevated risk was, in effect, transferred to other sectors. Overall, the findings highlight how sector-specific exposures can amplify monetary policy shocks, cautioning policymakers against an exclusive focus on the primary source of risk when evaluating systemic financial stability and the broader transmission of monetary policy.