Markets network member Alexander Ludwig is Professor of Public Finance and Macroeconomic Dynamics at Goethe University. For the 2019-2020 academic year he is visiting professor at Universitat Autònoma de Barcelona. His research interests are in the fields of dynamic macroeconomics with heterogeneous agents, public finance, demographic and computational economics. He is an editorial board member at the Journal of Pension Economics & Finance and at the Journal of Demographic Economics. He was previously Professor of Macroeconomics at University of Cologne and Assistant Professor at University of Mannheim and Head of Research Unit “Macroeconomics” at the Mannheim Research Institute for the Economics of Aging (MEA).
Describe your area of study and how it relates to current policy discussions surrounding inequality.
As a quantitative macroeconomist I develop calibrated economic models with overlapping generations to investigate the three way feedback between inequality, policy, and macroeconomic outcomes. My most recent research along this line pursues questions related to optimal social insurance policies, i.e., through income taxation, education financing, unemployment insurance, and pension policies and interactions between these policy instruments. I am also increasingly interested in answering questions related to the design of health insurance systems and their impact on inter- and intra-generational distribution and on macroeconomic outcomes.
What areas in the study of inequality are most in need of new research?
A recent strand of the literature emphasizes the evolution of top income and wealth inequality, mostly descriptively. In my view, in light of trends of automation and large aggregate economic shocks (e.g., the upcoming coronavirus related economic crisis) bottom inequality, how to design more integrated economic systems, and structural economic models to understand the interplay between different mechanisms and policies deserve more and increasing attention.
What advice do you have for emerging scholars in your field?
Like myself. From an economic perspective: have an eye on developments that matter for the economic wellbeing of people. From a technical perspective: tool yourself up in theoretical, data analysis, respectively econometric, and quantitative modeling skills. From an overall researcher’s perspective: be aware that we live in an increasingly data rich world and that a thoughtful analysis of economic mechanisms often requires structural and theoretically founded approaches to the analysis of economic data.