The Canada Research Chair in Macro Finance aims to advance our knowledge in the field of Macro Finance.

Macro Finance studies how economic and monetary conditions affect financial markets, with a particular attention on international economic issues.

Understanding how economic shocks transmit across borders and how they impact investors has become important due to the globalization of the financial sector and the growing interconnectedness of world financial markets. By studying the relationship between asset prices and economic activity, the Chair in Macro Finance will aid us in our comprehension of the global capital markets. Research in Macro Finance will thus be valuable to academics, central bankers, and the investment community alike.

Research program

The research agenda will focus on two critical dimensions.

First, exchange rates will be a focal point, because international investments are typically exposed to exchange rate risk. Hence, in order to study asset pricing in an international setting, it is crucial to comprehend how exchange rates vary over time, to identify their key determinants, and to assess how shocks to exchange rates affect different assets.

Second, we concentrate on the role of global shocks. Many financial, monetary, and macroeconomic shocks transmit internationally, and investors are thus exposed to such shocks. However, our knowledge of how global shocks impact the valuation of equity, debt, and derivatives around the world is still limited. Moreover, our understanding of the propagation mechanisms that allow certain shocks to become global is even more incomplete, which makes Macro Finance ideally positioned to answer some fundamental economic questions.