Xavier Gabaix

About

Xavier Gabaix is the Pershing Square Professor of Economics and Finance at Harvard University. His office is located at Littauer Center 209, 1805 Cambridge Street, Cambridge, MA 02138. He can be contacted via email at xgabaix@fas.harvard.edu. The biography and CV details, as well as information about his classes and publications, are available through his Harvard profile. No additional research focus, background, or key contributions are provided in the given page text.

Research topics

• Macroeconomics
• Mathematics
• Economics
• Keynesian economics
• Microeconomics
• Mathematical economics
• Econometrics
• Finance
• Statistics
• Psychology

Selected publications

• A Behavioral New Keynesian Model

  American Economic Review · 2020 · 448 citations

  1st authorCorresponding

  This paper analyzes how bounded rationality affects monetary and fiscal policy via an empirically relevant enrichment of the New Keynesian model. It models agents’ partial myopia toward distant atypical events using a new microfounded “cognitive discounting” parameter. Compared to the rational model, (i) there is no forward guidance puzzle; (ii) the Taylor principle changes: with passive monetary policy but enough myopia equilibria are determinate and economies stable; (iii) the zero lower bound…

  PublisherDOI

• In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis

  National Bureau of Economic Research · 2021-06-01 · 250 citations

  reportOpen access1st authorCorresponding

  We develop a framework to theoretically and empirically analyze the fluctuations of the aggregate stock market. Households allocate capital to institutions, which are fairly constrained, for example operating with a mandate to maintain a fixed equity share or with moderate scope for variation in response to changing market conditions. As a result, the price elasticity of demand of the aggregate stock market is small, and flows in and out of the stock market have large impacts on prices.

  PublisherDOI

• Granular Instrumental Variables

  Journal of Political Economy · 2023-11-14 · 90 citations

  article1st authorCorresponding

  We develop a new method to construct instruments in a broad class of economic environments. In the economies we study, a few large firms, industries, or countries account for an important share of economic activity. Idiosyncratic shocks to these large players significantly affect aggregate outcomes and are valid instruments. We provide a methodology to extract these idiosyncratic shocks to create granular instrumental variables (GIVs), which are size-weighted sums of idiosyncratic shocks. We sho…

  PublisherDOI

• Granular Instrumental Variables

  2020 · 52 citations

  1st authorCorresponding

  We propose a new way to construct instruments in a broad class of economic environments. In the economies we study, a few large firms, industries or countries account for an important share of economic activity. As the idiosyncratic shocks from these large players affect aggregate outcomes, they are valid and often powerful instruments. We provide a methodology to extract idiosyncratic shocks from the data and create "granular instrumental variables" (GIVs), which are size-weighted sums of idios…

  PublisherDOI

• In Search of the Origins of Financial Fluctuations: The Inelastic Markets Hypothesis

  SSRN Electronic Journal · 2021-01-01 · 42 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

Recent grants

• DRU -- Collaborative Research -- An Econophysics and Behavioral Approach to Financial Fluctuations

  NSF · $58k · 2008–2011

• DRU -- Collaborative Research -- An Econophysics and Behavioral Approach to Financial Fluctuations

  NSF · $127k · 2005–2009

• Sparsity: A Tractable Approach to Bounded Rationality, Applied to Basic Consumer Theory, Equilibrium Theory, and Dynamic Programming

  NSF · $277k · 2013–2016

Frequent coauthors

• David Laibson

  Harvard University Press

  212 shared

• Alex Edmans

  London Business School

  102 shared

• Vasiliki Plerou

  Boston University

  101 shared

• Parameswaran Gopikrishnan

  97 shared

• H. Eugene Stanley

  Boston University

  96 shared

• Ralph S. J. Koijen

  84 shared

• John C. Driscoll

  Federal Reserve Board of Governors

  30 shared

• Sumit Agarwal

  National University of Singapore

  27 shared

Education

• Ph.D., Economics

  Massachusetts Institute of Technology

  1999

• M.S., Economics

  Massachusetts Institute of Technology

  1996

• B.A., Economics

  Harvard University

  1992

Awards & honors

• Fischer Black Prize
• Bernacer Prize
• Lagrange Prize
• Allais Prize

Similar researchers at Harvard University

• Andrei Shleiferh-200
• Alberto Alesinah-161
• John Y. Campbellh-132