Lee Tyrrell-Hendry
Lecturer, Department of Economics, University of Bath
About me
I am a Lecturer in Economics at the University of Bath.
Research interests:
My research lies in the intersection of macroeconomics, finance and policy. I am particularly interested in understanding the effects of heterogeneity and financial frictions on the macroeconomy and on welfare, and the implications for policy.
View my CV or read about my research
Contact:
Lee.T.Hendry@gmail.com or lth35@bath.ac.uk
Address:
4.48, 3 East
Department of Economics
University of Bath
Claverton Down
Bath, BA2 7AY
Recent research
Abstract: What are the limits on how much a government can borrow when the real interest rate on public debt is below the growth rate of the economy? I explore this question using a standard model of risky investment under incomplete markets, extended to feature emerging market (EM) economies with even greater risk, and limits to the private supply of safe assets. These two elements further inflate the bubble in public debt, affording developed market (DM) governments even greater fiscal space.
Abstract: When governments provide services to the public that are free at the point of use, like higher education in many European countries, they must balance the adequate provision of services against the economic costs of funding them with distortionary taxes like progressive income taxes. Should governments always provide adequate funding and accept the higher taxes, or should they allow for rationing of places in order to limit these distortions? I develop a macroeconomic model where higher education is funded by the government and rationing of places is possible. I show that in the calibrated model the optimal policy is to provide just enough funding to avoid rationing, even when taxes are highly progressive and hence more distorting. Moreover, general labour taxes should be highly progressive, while graduate taxes should be near zero.