Dynamic Stochastic General Equilibrium Modelling of UK Growth: Policy Transmission Mechanisms and Optimal Policy Design in the Post-Brexit Era

About the Project

Cardiff Business School is delighted to offer a bursary - supported by the Institute of Economic Analysis - for a project starting in October 2026, supervised by Professor Patrick Minford, Professor Mai Le and Professor David Meenagh.

Context and rationale

The UK economy faces unprecedented challenges following Brexit, the COVID-19 pandemic and recent inflationary pressures. This PhD research aims to develop a comprehensive DSGE model of the UK economy designed to explain growth determinants and productivity performance while analysing how monetary and fiscal policy instruments affect growth, inflation and employment. The model will also examine fiscal policy transmission mechanisms, including government spending multipliers and tax policy effects, while modelling crucial interactions between monetary and fiscal policies. The model is to be estimated and evaluated against the UK macroeconomic data using the Indirect Inference technique.

Aims

The model will build on recent studies by the supervisory panel. It is essentially a New Keynesian framework but also includes several key features that distinguish this model from standard frameworks including state-dependent pricing, financial frictions, open economy elements, fiscal-monetary interactions and supply-side elements.

Expected outcomes

The intended empirical contributions will include the first comprehensive DSGE model successfully capturing post-Brexit UK economy dynamics with rigorous empirical validation. Policy contributions will deliver practical recommendations for the Bank of England's monetary policy framework and fiscal policy guidance for sustainable growth.

Entry Criteria

To receive this funding, you must have a background in Economics with qualifications or experience equivalent to a UK honours degree at a first or upper second-class level, or a masters. We welcome applications from applicants with an interest/experience in macroeconomic modelling.

Duration of study

The duration of study varies from 3-4 years full time.