I'm an assistant professor in the Department of Economics at the London School of Economics. I'm a macroeconomist interested in topics such as inflation, fiscal and monetary policy, and artificial intelligence; applying tools such as causal inference, machine learning, and time series forecasting.
I serve as an associate editor at the Journal of the European Economic Association, and as a member of the editorial board of the Review of Economic Studies.
I received my undergraduate degree from the University of Cambridge in 2015, where I received the Adam Smith Prize for the best undergraduate thesis in economics, the Adam Smith Prize for the best undergraduate performance in economics, and the Gladstone Prize for the best undergraduate thesis in history and social sciences. I received my PhD in economics from MIT in 2020. In 2020–2021 I was a post-doc in the Department of Economics at Princeton University, at the Julis-Rabinowitz Center for Public Policy and Finance.
General Interest
I summarized my research with a pair of episodes (one, two) on David Beckworth's Macro Musings podcast. Tyler Cowen has also summarized some of my research at Marginal Revolution.
Contact
My email is J.hazell [at] lse [dot] ac [dot] uk. I sometimes tweet about my research.
▸ Show abstractDo stimulus checks—one-off, deficit-financed and lump-sum payments from government to households—boost the economy? We study a natural experiment: payments to U.S. veterans after World War II that mimic stimulus checks but were plausibly exogenous to the economy. These payments led to a temporary increase in transfers and a persistent increase in consumption. The transfer multiplier—the cumulative response of consumption to transfers—reaches 1 after six months and exceeds 2 after a year. The standard heterogeneous-agent New Keynesian model cannot match the persistent consumption response. A version with imperfect expectations—with households underreacting on impact but overreacting at longer horizons—can match our estimates.
▸ Show abstractDoes microeconomic heterogeneity help to forecast aggregate inflation in a non-stationary environment? We develop a scan test for whether one forecast outperforms another, over an interval with unknown starting point and duration. To exploit any occasional forecasting power that the scan test detects, we design an adaptive machine learning pipeline. We encode the distribution of price changes into a high-dimensional vector, which we combine with a gradient boosted trees algorithm. We then combine this micro forecast with other benchmark forecasts, using an adaptive algorithm that makes use of the micro forecast only when it performs well. We apply the pipeline to UK microdata, with four main results. First, the micro forecast outperforms a univariate benchmark, but only in the volatile period after 2020. Second, the scan test detects periods of micro outperformance, so the micro forecast enters the combined forecast. Third, the combined forecast performs comparably to the univariate benchmark before 2020 and better at every horizon after 2020. Fourth, the value of microdata for the combined forecast materializes after 2020. We conclude that microdata are valuable for forecasting aggregate inflation, but only after large shocks.
▸ Show abstractWhat is the macroeconomic effect of AI? One important channel is that AI will increase the productivity of software engineering, which this paper measures using asset prices. Asset prices capitalize not only current productivity gains due to AI, but also a forecast of future gains expected by the market. We estimate a cross-sectional relationship between the exposure of firms’ stock returns to an AI index and their software engineering intensity, and develop a model that maps this relationship into software engineering productivity and GDP. Under our baseline calibration, news about AI from November 2022 to December 2025 implies a market forecast for present-value software engineering productivity gains equivalent to a permanent increase of 30.5 percent. These gains imply one-time permanent increases in GDP of 3.3 percent through production alone and 6.0 percent when higher software engineering productivity also raises R&D productivity. A further benefit of our approach is that it can be updated in real time: incorporating returns from the first months of 2026, a period of rapid progress in AI coding agents, implies substantially larger market-implied gains in software engineering productivity, with a correspondingly larger GDP impact.
Revise and resubmit, Journal of Political Economy, July 2026.
▸ Show abstractThis paper estimates how rate cuts increase consumption, via debt and asset prices. Using administrative UK data on mortgages and consumption, we exploit the expiry of fixed-rate mortgages to construct six million household-level natural experiments. A 1 pp reduction in mortgage rates raises consumption by 3% in the following 6 months. Using plausibly exogenous variation in how house prices respond to rate cuts, we show that consumption increases mostly because households borrow against higher house prices; lower debt service after rate cuts matters less. These results suggest that in large part, monetary policy affects consumption through asset prices and borrowing.
▸ Show abstractWe measure the effect of deficits on inflation using a “high frequency narrative approach”. We identify an event that released news about the 2021 deficits—the Georgia Senate election runoff—and size the shock using new narrative data from investment banks. We then study the high frequency response of inflation forecasts from asset prices. We estimate that the price level was expected to increase by 22–38 basis points over 2021–22, meaning the 2021 deficits caused a significant share of the 2021–22 inflation. Standard models—such as the Fiscal Theory of the Price Level and the heterogeneous agent New Keynesian model—match the inflation response.
Revise and resubmit, Review of Financial Studies, March 2026.
▸ Show abstractWe study a form of liquidity risk we call Liquidity After Solvency Hedging (“LASH”) risk. Institutions take LASH risk when hedging solvency risk with strategies that require liquidity as solvency improves. Using UK regulatory data covering the near-universe of interest rate hedges, we measure interest rate-driven LASH risk in the non-bank sector. Institutions with longer-duration liabilities take greater LASH risk when rates fall. At its peak, a 100bps rise in yields implied liquidity needs close to the aggregate cash holdings of UK pension funds and insurers. During the 2022 LDI crisis, pre-crisis LASH risk predicts bond sales and yield spikes.
Forthcoming, Econometrica, May 2026. Awarded the SCOR–PSE Junior Research Prize.
▸ Show abstractHow costly is inflation to workers? Answers to this question have focused on the path of real wages during inflationary periods. We argue that workers must take costly actions (“conflict”) to have nominal wages catch up with inflation, meaning there are welfare costs even if real wages do not fall as inflation rises. We study a menu-cost style model, where workers choose whether to engage in conflict with employers to secure a wage increase. We show that, following a rise in inflation, wage catch-up resulting from more frequent conflict does not raise welfare. Instead, the impact of inflation on worker welfare is determined by what we call “wage erosion”—how inflation would lower real wages if workers’ conflict decisions did not respond to inflation. As a result, using observed wage growth to measure worker welfare understates the costs of inflation. We conduct a survey showing that workers are willing to sacrifice around 1.75% of their wages to avoid conflict. Calibrating the model to survey data, we find that incorporating conflict significantly raises the costs of inflation for workers.
▸ Show abstractHow do firms set wages across space? We document four facts using matched employer-employee data. First, firms rather than locations explain most of the variation in wages within a job, with an excess mass of firms paying near-identical wages across space. Second, nominal wages within the firm vary relatively little with local prices, compared to how wages vary between firms. Third, wage growth is more correlated with firm-level rather than regional factors. Fourth, local wage shocks cause wage growth in the rest of the firm, but only for jobs that initially pay similar wages across space. We argue these patterns indicate national wage setting, in which firms compress nominal wages across space relative to what benchmark models predict.
Forthcoming, American Economic Review: Insights, October 2025.
▸ Show abstractWe introduce dynamic incentive contracts into a model of unemployment fluctuations. Our main result is that wage cyclicality from incentives does not affect the response of unemployment to productivity shocks. The response of unemployment is the same, to a first-order, in two economies: one with flexible incentive pay, and another with exogenously fixed wages. This equivalence is due to movements in effort. Under the optimal incentive contract, firms’ profits do not change when wages fall, because the effort of the worker falls too.
▸ Show abstractEach month, a fraction of UK property leases are extended by 90 years or more. We construct a new dataset using thousands of these natural experiments since 2000 and estimate the expected long-term housing yield, y*. After remaining steady at around 5 percent, y* starts to decline when the Great Recession hits and reaches a low of 2.7 percent in 2024. The decline is steeper in inelastic markets, while y* remains higher in regions more exposed to long-run climate risk. Our estimate of y* is updated in real time using public data.
▸ Show abstractWage rigidity is an important explanation for unemployment fluctuations. In benchmark models wages for new hires are key, but there is limited evidence on this margin. We use wages posted on vacancies, with job and establishment information, to measure the wage for new hires. We show that our measure of the wage for new hires is rigid downward and flexible upward, in two steps. First, wages change infrequently at the job level, and fall especially rarely. Second, wages do not respond to rises in unemployment, but respond strongly to falls in unemployment. Job information is crucial for detecting downward rigidity.
▸ Show abstractA published comment on Beaudry, Hou and Portier’s analysis of the post-2020 inflation surge, focusing on the role of expectations and supply shocks.
Quarterly Journal of Economics [lead article], August 2022.
▸ Show abstractWe estimate the slope of the Phillips curve in the cross section of U.S. states using newly constructed state-level price indices for nontradeable goods back to 1978. Our estimates indicate that the slope of the Phillips curve is small and was small even during the early 1980s. We estimate only a modest decline in the slope of the Phillips curve since the 1980s. We use a multiregion model to infer the slope of the aggregate Phillips curve from our regional estimates. Applying our estimates to recent unemployment dynamics yields essentially no missing disinflation or missing reinflation over the past few business cycles. Our results imply that the sharp drop in core inflation in the early 1980s was mostly due to shifting expectations about long-run monetary policy as opposed to a steep Phillips curve, and the greater stability of inflation between 1990 and 2020 is mostly due to long-run inflation expectations becoming more firmly anchored.
American Economic Association Papers & Proceedings, May 2022.
▸ Show abstractDocuments that a substantial portion of US unemployment-insurance taxes operates as a uniform payroll tax rather than an experience-rated firing tax.
▸ Show abstractWe study the impact of artificial intelligence (AI) on labor markets using establishment-level data on the near universe of online vacancies in the United States from 2010 onward. There is rapid growth in AI-related vacancies over 2010–18 that is driven by establishments whose workers engage in tasks compatible with AI’s current capabilities. As these AI-exposed establishments adopt AI, they simultaneously reduce hiring in non-AI positions and change the skill requirements of remaining postings. While visible at the establishment level, the aggregate impacts of AI-labor substitution on employment and wage growth in more exposed occupations and industries is currently too small to be detectable.
▸ Show abstractBanks face different but potentially correlated risks from outside the financial system. Financial connections can share these risks, but they also create the means by which shocks can be propagated. We examine this tradeoff in the context of a new stylized fact we present: German banks are more likely to have financial connections when they face more similar risks. We develop a model that can rationalize such behavior. We argue that such patterns are socially suboptimal and raise systemic risk, but can be explained by risk shifting. Risk shifting motivates banks to correlate their failures with their counterparties, even though it creates systemic risk.
